Braidy Industries investing $1.3 billion in aluminum mill in Greenup County
27 April 2017
WURTLAND Braidy Industries will build a $1.3-billion aluminum mill near South Shore, creating 550 advanced manufacturing jobs, the company’s executives and Gov. Matt Bevin announced Wednesday.
The mill will produce sheet and plate for automotive and aerospace industries, and the U.S. Department of Defense. Braidy Industries, an American holding company incorporated in Delaware, will pay its workers an average salary of $70,000, according to the company’s CEO, Craig Bouchard.
Construction on the 2.5-million-square-foot facility will likely begin in early 2018 atop 380 acres of riverfront property just outside South Shore city limits in Greenup County. Braidy is in the process of acquiring the proper permits before it can break ground. The project will create 1,000 temporary construction jobs, and is set for completion in 2020.
Bevin and Bouchard announced the project on the porch of the historic McConnell House in front of a lively crowd.
The company was courted to the region by the Bevin Administration and the Ashland Alliance, which is the chamber of commerce and economic development organization for Boyd and Greenup Counties.
Bouchard said his company’s interest in locating the massive plant in Kentucky piqued after the state passed its controversial right-to-work legislation. He said the company would’ve simply chosen another state that already had the law, which prohibits membership in a labor union or payment of union dues as a condition of employment, meaning workers can opt out of paying dues to unions but still receive union benefits.
Critics say the law is designed to cripple unions by depleting their bargaining resources, and leads to lower-paying jobs with less benefits. But staunch advocates, like Bevin, believe it’s now a prerequisite for states to lure major companies, like Braidy.
Bouchard said the benefit of a right-to-work law for his company is about efficiency.
“When you’re managing revenues, which will be $1.5 billion out of this facility, and 550 people working as a team, you have to be efficient. Move quick … Throw all those work rules out. Labor unions are somewhat restrictive with those things,” said Bouchard, whose lengthy business resume includes executive positions and ownership of aluminum and steel manufacturing companies, banking and software development.
Company plans for the mill include a workout center, a child daycare and lunches to employees at a cost of $1 per day.
Bouchard said he spoke with Bevin “right after” the state passed right to work, which happened in January, and Bevin remained persistent for weeks in promoting cities and regions across the state. The company narrowed its field of candidates down to 12 cities in Kentucky, and 12 cities in another state Bouchard refused to name.
Best of 24 bids
“We got 24 bids. We visited all of them. We met with all of their economic development teams and mayors. Greenup County and this entire area was our No. 1 choice,” Bouchard said.
The proximity of the Ashland area to the Ohio River, rail systems and interstate highways, as well as major aluminum and auto part providers, coupled with a hungry workforce, drove Greenup County to a “come-from-behind win” to land the company, Bouchard said.
The state sweetened the deal by allowing the Bevin Administration borrow up to $15 million for bonds. The General Assembly passed a bill to let Bevin borrow the funds during the final hours of the legislative session, to help fund what was then a “mystery” economic development project in eastern Kentucky.
The Kentucky Economic Development Finance Authority, or KEDFA, on Wednesday morning gave preliminary approval to the company for tax incentives up to $10 million through the Kentucky Business Investment program. The performance-based incentive allows a company to keep part of its investment ovthe agreement term through corporate income tax credits and wage assessments, if the company meets job and investment targets, according to state officials.
Bevin said "bottom line, Kentucky is investing $15 million in this deal.” He said if the company reaches its goals, the state’s investment could be worth as much as $250 million.
“If they reach their goals, you’re going to see that $15 million investment. Worth as many as $250 million. It was a leap of faith.
Braidy can also receive resources from the Kentucky Skills Network, which allows companies to receive no-cost recruitment and job placement services, reduced-cost customized training and job training incentives.
Bouchard credited the Ashland Alliance and its president, Tim Gibbs, for selling the region to the company as a beacon of turnkey prosperity.
Gibbs said he, along with Alliance Vice President Amanda Clark and the staff, presented 75 to 100 pages of data to the company to back up its pitch.
“You have to have the data,” said Gibbs. “You have to show them the availability of workers, how many, what their credentials are, how they’ve been trained, how willing they are to commute. You can wrap it into a great story, but if you can’t prove it with the facts, it doesn’t happen.”
Bouchard said the struggling state of northeastern Kentucky’s economy also played a factor in the company’s decision. The Ashland Area, once a mecca for steel and oil jobs in Kentucky, has been pummeled by the departure of staple industrial companies, like Ashland Oil, Inc., that employed thousands of blue-collar workers.
Last winter, CSX Corporation cut 101 jobs at its facility in Russell. A year before, AK Steel Ashland Works sliced its payroll by 633 workers through a mass layoff still in effect. The steel mill now employs about 200. Some of the laid-off steelworkers have fled the Tri-State region in search of a new lifeblood, but a majority still cling to hope and remain with their families.
Bouchard said the AK Steel situation “did play a factor.” He said he knows the AK Steel executives well, and some of his companies have been a supplier or customer of the major American steel provider in the past.
“It’s a great company, and their employees are always well trained. I feel for those families, I think the AK Steel executives feel for those families, we’re going to put some of them back to work.”
When asked by The Daily Independent if the existing regional workforce is ready to work in the most modern aluminum rolling mill in the nation, Bouchard said, “no, they’re not ready,” but “they (workforces) wouldn’t have been ready anywhere else, either.”
The company’s plan, included in its business application to the state, is to work with the Kentucky technical college system to educate the local workers.
“Ashland has two junior colleges and technical schools very close here,” said Bouchard. “We have met with them, and developed an agenda and a course curriculum that would allow a student to come through those programs, obtain an associate’s degree while they intern in our mill. They come out of there with a B average and the right work ethic, they’ve got the job.
“Are they ready? No. Will they be ready? Yeah. We’ve got two years to make them ready.”Bouchard said the company will also provide $1,000 per year of training and education to every employee for five years.
Mike Howard, president of the United Steelworkers Local 1865 in Ashland, attended the announcement ceremony and said he’s confident steelworkers, and most other jobless trade workers in the region, could transition to aluminum, and that the 1,000 construction job the project requires appear promising for the local workforce in the short term.
“Our people, they’re ready, they’re more ready than they were when they were laid off thanks to the schooling,” said union chairman Clint Poplin.
In a news release, the union said it’s “extremely happy to have good paying jobs in the area,” but is unhappy lawmakers touted the passage of right to work, maintaining the hardline union stance against the legislation it says is a “misnomer” in itself that harms the working class.
Bevin hyped the right to work law more than Bouchard while explaining how the state was able to reel in Braidy. He also credited GOP House and Senate leadership for the swift passage of the legislation, and said it will continue to cause a “ripple effect” throughout eastern Kentucky and the whole state.
The governor said he lauded the Ashland Area to Braidy executives based not only on its logistical advantages, but also its intangibles.
“I’ve spent a lot of time here, come to known people here, I love the pride. There are many communities in Kentucky that have extraordinary pride. This region is one of the best I’ve ever seen. Even when on its heels, there’s also been a sense of optimism and hope … the ability to transform a community’s hope, its spirit, its convictions, its beliefs in itself, along with all the other economic expansions, that’s just gravy on top.”
Greenup County Judge-Executive Bobby Carpenter said in his 24 years of public services, “this is the projected I have waited for.”
State Rep. Danny Bentley, R-Russell, a South Shore native, said he knows “how hard the people of Greenup County work,” and the company chose wisely in picking the riverfront site.
Bouchard told The Daily Independent the company is seeking additional office space outside of the South Shore main site. Executives may begin moving into region in the next few weeks, he said.
The company will likely finalize the hiring of about 500 workers nine months prior to the mill’s opening.