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Southwestern Indiana update.

Almost all of the talk about economic development in Southwestern Indiana this year has focused on DFAS.


Unless you live around Evansville or Indianapolis, you probably don't know. But the hopes and dreams of a lot of people in this part of the state are hitched to the Defense Finance and Accounting Service--a part of the U.S. Department of Defense--and the chance one could be located in Evansville.

It would mean 4,000 jobs--good ones paying more than $30,000--but the road there has not been easy. Both Evansville and Indianapolis bested hundreds of other cities to become among 20 finalists to get one of five centers. Indianapolis has such an operation now, but is in danger of losing it unless it is one of the sites chosen for a new center.

Evansville leaders surprised everyone with the incentive package they offered--to build, maintain and supply a huge new building for DFAS for 30 years at a cost of $1. Value of the package? $256 million.

But Defense Secretary Les Aspin put a halt to the whole DFAS plan early this year--questioning whether communities should be bidding against one another with taxpayer money to land a government building. Southwestern Indiana counties had banded together to support Evansville's plan and the disappointment was evident. But area leaders still were holding out hope that the process would be allowed to continue later this year.

Meanwhile, Evansville leaders were rejoicing about a decision by Whirlpool Corp. to add more than 1,000 jobs at its local refrigerator plant, boosting employment to more than 5,000. Company spokeswoman Deborah Castrale says the hiring was due to increased sales for the company's products and has resulted in new third-shift assembly line.

Vision 2000, the area's economic-development agency, has turned some of its attention away from DFAS to the prospect of landing a Mercedes-Benz plant. The German automaker is shopping the U.S. for a site, and Southwestern Indiana has made a pitch.

Other prospects that executive director Ken Robinson has been wooing include an auto-parts manufacturing company, a retail outlet mall and a pharmaceutical distribution company.

On the flip side, Bristol-Myers Squibb, which has its nutritional division headquartered in Evansville, had to lay off employees for the first time in its history. About 150 workers were affected from the local work force of 2,500.

In Warrick County, all eyes are on the sprawling Alcoa plant in Yankeetown. The company offered early retirement to more than 500 workers in an effort to avoid layoffs.

About 370 employees accepted the offer, which included bonuses and financial incentives. But that was not enough to meet the company's goal.

Company spokesman Mike Belwood says about 100 salaried workers were expected to be laid off this year. The company has about 3,800 workers in Warrick County; about 1,000 are salaried. No hourly employees were expected to be laid off if the company meets other cost-containment goals, Belwood says.

Elsewhere in the county, a company called Electronics Research Inc. of Newburgh recently landed a contract to install new broadcast antennas on the Empire State Building and has started construction on a 30-acre manufacturing complex in Chandler. The company has 65 employees and makes both antennas and installation towers.

In Knox County, local officials are cheering plans to build a $10.5 million juvenile detention facility to serve 14 counties near Vincennes. It was originally planned for Warrick County, but the Vincennes Area Community Development Corp. put together a comprehensive package. It will provide 80 full-time jobs and will be built by a non-profit group, Correctional Services Group Inc., but run by a for-profit operation, Correctional Services of America. Funding will be from tax-exempt revenue bonds, paid off by fees charged to the counties who send juveniles to the facility.

Eric Dewes, executive director of the Vincennes Area Community Development Corp., says the jail will mean an economic boost to the region. He says other efforts are continuing as well, including the formation of a "Highway 41 Growth Corridor" development group to concentrate on industrial and business expansion along the highway.

In Spencer County, residents are getting over the January closing of the Barmet Aluminum Corp. aluminum recycling plant, says Bob Palstring, president of the Rockport Area Chamber of Commerce. That closing meant the loss of 100 good jobs and about $12 million in annual spending.

"That really hurt us," he says. On the flip side, however, the county's largest employer, the Indiana & Michigan power plant, has been slowly adding employees.

And the region's major amusement park, Holiday World in Santa Claus, opened the first phase of its $3 million water park, called "Splashin' Safari." It features an action river with inner tubes, two water slides and a children's area. Will Koch, president of Holiday World, says he expects the park to be a major attraction.

Posey County recently approved a comprehensive economic-development plan and formed a redevelopment commission to see that it gets done.

The county also is planning to form an industrial development corporation with a full-time director.

Also, Nelson Plastics Inc., an Evansville firm, plans to build a 35,000-square-foot plant outside New Harmony and move its operations. The structure will include a warehouse and plastic injection-molding equipment.

In Dubois County, Jasper Engine & Transmission is in the midst of a major expansion of its plant and is adding another 120 employees.

Nancy Eckerle, director of the Jasper Chamber of Commerce, says Jasper Engine is just one strong employer in the county, known for its residents' work ethic. Employment also remains strong at Kimball International and Aristokraft, the county's biggest employers. "Things are looking up," she says. The area's unemployment rate is traditionally very low--4.6 percent in recent figures--and Dubois County is known for a very stable economy.

In Gibson County, eyes are on PSI Energy's Gibson Generating Station near Princeton, where PSI plans to invest more than $160 million installing new scrubbers to control sulfur dioxide emissions. It's a major investment, not only in the Gibson County plant, but in local coal mines, which produce a lot of high-sulfur coal.

In Daviess County, a number of employers have been working on expansion plans. David Cox, executive director of the Daviess County Growth Council, ticks off several: United Films, Star Glove, Perdue Foods, Spectrum Manufacturing, K&K Truss Rafters and Daviess County Metal Sales.

"We've been fortunate to pretty much escape the recession," Cox says. "Most of our employers feel fortunate. It's tough to keep the customers you have plus attract new ones."

In Pike County, executive director Mary Charles of the Pike County Chamber of Commerce says the past couple of years have seen sharp growth in economic development. "Pike County has had 20 new small businesses, ... a nine-hole golf course, ... a medical clinic, a rehabilitation center and a new railroad company. The Indiana Southern Railroad has been the largest service industry to enter Pike County in the past one and a half years."

Still, local boosters are working hard to continue the momentum. A variety of development programs are in place to help the county reach its goals, which include development of at least one industrial park, the retention of existing businesses, and the development of affordable housing.

In Perry County, Greg Wathen has seen a lot of browsers but is waiting for buyers. Wathen, director of the Perry County Economic Development Corp., recently had three serious development prospects in his office in a week. And the county is on some short lists, but hasn't landed a big one yet.

So the county is concentrating on making improvements to its infrastructure while waiting for the big one. Wathen uses key selling points to convince prospects--rural areas offer a solid work ethic, lower costs and key environmental advantages.

"I think rural locations must be more aggressive than their urban counterparts," he says. "I think there's a perception that rural economic-development corporations can't compete, and we can."
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:economic development
Author:Derk, James S.
Publication:Indiana Business Magazine
Article Type:Industry Overview
Date:Jun 1, 1993
Previous Article:Indiana's retail developers.
Next Article:Mount Vernon.

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