JOSEPH REY AU
Toyota Motor Manufacturing, Kentucky, is the top employer among the state’s nearly 4,500 manufacturing facilities. In all, an estimated 244,000 people are employed in Kentucky’s manufacturing sector.
With a record number of new jobs and a spate of business expansions, the manufacturing industry in Kentucky is strong, said Frank Jemley, president of the Kentucky Association of Manufacturers (KAM).
KAM’s annual Manufacturing Summit and Awards Luncheon, featuring Susan Elkington, president of Toyota Motor Manufacturing, Kentucky as the keynote speaker, is set for October 19-20 at the Lexington City Center. In advance of the meeting, Jemley says the outlook for the industry over the coming year is a rosy one.
Frank Jemley
“It’s been as strong as we’ve seen it over the past 18 to 24 months,” Jemley said.
In 2021, Kentucky announced that more than 21,000 new jobs had been created state-wide. Of those, Jemley said, about 90 percent were in manufacturing.
Currently, according to statistics from KAM, manufacturing employs an estimated 244,000 people across Kentucky — more than 13 percent of the state’s workforce — in nearly 4,500 manufacturing facilities. Each year, manufacturing is responsible for $38.33 billion in output, accounting for 17.8 percent of the state’s gross domestic product. Kentucky is third in the nation for automobile production.
According to the Kentucky Council for Economic Development, Kentucky’s central location, workforce and business-friendly environment have helped to lure new businesses to the state. Over the past five years, the CED says, manufacturers have announced more than 1,100 facility location or expansion projects with a reported capital investment of more than $21 billion.
In September 2021, Ford Motors announced it would build a battery plant in Hardin County for nearly $6 billion. In April 2022, Envision AESC announced it would build an electric vehicle battery plant in Warren County for $2 billion.
“We solidify the commonwealth of Kentucky is the undisputed electric battery production capital of the United States,” Gov. Andy Beshear said.
State Rep. Michael Meredith (R-Bowling Green) said legislative actions helped spur manufacturing growth.
“Since 2017, the majority in the house has put an ‘open for business’ sign on the commonwealth with pro-growth policies, continued efforts at tax-reform and work to make us a better place to live and work on a daily basis,” he said.
Beshear said the addition of the battery manufacturing plants would bring even more businesses to the state.
Jemley agrees.
“Kentucky’s reputation for exceptional products and global competitiveness are playing out in the form of more and more attention being paid to the state and more businesses locating their plants here,” he said.
“By and large, Kentucky manufacturers are optimistic about their prospects to strengthen and grow across the commonwealth,” Jemley said. “I’ve been impressed with my conversation with our members. Our manufacturers are focused on doing their jobs and doing them well while producing what their customers need.”
One challenge facing manufacturing, like all industries, is ensuring an adequate workforce.
“Workforce issues are a significant challenge, not just in manufacturing but across the state’s economy,” Jemley said. “Arguably, it’s the largest challenge we face. A lot of great thinking is going into ways to solve that challenge.”
Vijay Kamineni
Vijay Kamineni, chief innovation technology leader with Logan Aluminum in Russellville, said his company sees a continuing upward market. During the COVID-19 pandemic, he said, the company learned to work differently and adjust to new working conditions. Demand for Logan’s products, however, increased. The company makes aluminum for beverage cans and is responsible for an estimated 45 percent of the beverage can sheet market.
“We’re seeing that the market is still showing an upward trend,” he said. “We’re looking forward to the next two years even as we face some supply chain and workforce challenges. Manufacturing is still a very strong industry sector, and Logan Aluminum is no different.”
One shift over the past few years, Kamineni said, has been a renewed focus on minimizing the company’s carbon footprint.
“Sustainability and environmental stewardship have always been a focus at Logan,” he said. “We use recycled aluminum, which saves a lot of energy and reduces our carbon footprint. But we’ve focused more in the past two years on not just doing less harm, but doing more good.”
Kamineni said that is a trend he sees across the industry in Kentucky.
The biggest challenge to manufacturing right now, he said, is change.
“Change is a positive thing, but it takes time,” Kamineni said. “First and foremost, for any manufacturer, we want to work in a way where everyone is safe. But it’s a fast-changing world. Change in manufacturing takes a little longer to ensure that processes are safe and efficient.”
While the outlook is rosy, Carlos Lopez, director of operations at the E. D. Bullard Co., said recovery from the COVID-19 pandemic is ongoing.
A manufacturer of personal protective equipment — including thermal imagers, hard hats, fire and rescue helmets, and respiratory protection equipment — Bullard didn’t shut down during the pandemic, Lopez said. But the pandemic did allow the company to look inward and streamline some of its processes and procedures, as well as upgrade equipment. He said that supply chain issues and workforce challenges have improved since the pandemic but haven’t fully returned to pre-pandemic levels.
Still, the company expects to see single-digit growth this year, he said.