Before closing the book on 2013, Missouri Business Alert is taking a look back at the year’s most important stories in Missouri business, focusing on the top 10 stories overall and the top five in several key industries:
Missouri said goodbye in 2013 to the vestiges of the Great Recession as companies announced major expansions from St. Louis to Kansas City and from the Bootheel to Joplin, with the most significant coming from the auto industry.
Overall the state added about 50,000 jobs, which brought the unemployment rate down from 6.6 percent in January to 6.1 percent in November, the lowest unemployment rate since August 2008. The peak was nearly 10 percent in 2009.
In metropolitan St. Louis, Express Scripts said it will add 1,500 jobs at its pharmacy benefits operations during the next five years. Other major announcements came from Monsanto (675 new jobs), Enterprise Holdings (500), Boeing (300-400 at new R&D centers), Reinsurance Group of America (300), Pharma Medica Research (320), and U.S. Bank (260).
There also was a surge in hiring for high-tech positions at fledgling companies, such as Cofactor Genomics, which tripled its workforce to 24 in St. Louis, LightEdge Solutions, an IT company in Kansas City that added 21 jobs, and Nanovo Biomaterials in Columbia, which is adding 50 jobs.
In the Kansas City area, announcements of expansions of more than 40 workers came from Triumph Foods, U.S. Engineering, Barton Nelson commercial printing, Mail Print marketing and Holland 1916, a manufacturing parent company. But the biggest announcements came from Ford, which is adding about 2,000 jobs at its manufacturing operations outside Kansas City and drawing new suppliers to the area.
1. Auto industry surges in Missouri
When the nation’s chief executive comes to town, and he’s not campaigning, you know there’s big news afoot. In September, President Barack Obama spoke to workers at Ford Motor Co.’s Claycomo assembly plant in suburban Kansas City, which celebrated its 100-year presence in the area this fall after announcing major production expansions.
“We’ve seen tremendous renaissance in Missouri over the last few years of automobile manufacturing jobs, and jobs of automotive suppliers,” Scott Holste, spokesman for Gov. Jay Nixon, said on the eve of Obama’s visit to recognize “the resurgence of the automobile industry specifically in Missouri.” The industry now supports nearly 100,000 jobs in the state.
In June, General Motors said it planned to spend $133 million to build a third stamping press system at its Wentzville plant and add 55 jobs, less than two years after GM announced a massive expansion of the van and truck factory. In the third quarter, Ford began adding 900 jobs and a third shift at its Claycomo plant to build F-150 pickup trucks. In the coming months, Ford will add about 1,100 workers who will assemble commercial vans in a factory that is undergoing a $1.1 billion retooling project.
Among the auto industry suppliers in Missouri announcing expansions or moves to Missouri was Yanfeng USA Automotive Trim Systems, which is investing $45 million to build a manufacturing plant in Riverside, and Adrian Steel, which plans to invest $4.7 million and hire 39 people to install interiors for Ford’s commercial van.
2. Japanese company acquires Sprint
After months of intrigue, Tokyo-based Softbank Corp. this summer spent $21.6 million to acquire 78 percent of Sprint Corp., the nation’s third-largest wireless communications service provider. Sprint said CEO Dan Hesse and three of its current directors will remain, and Overland Park remains Sprint’s headquarters. But Hesse will report to the Softbank CEO, who will be the chairman of Sprint’s board. Sprint also dropped Nextel from its name and closed on its $3.8 billion acquisition of Clearwire Corp. And near the end of December, Bloomberg reported that SoftBank CEO Masayoshi Son is exploring a deal for Sprint to buy the majority of T-Mobile.
3. Legislature rejects Medicaid expansion, Obamacare signups surge
Despite support from varied business interests in Missouri and aggressive campaigning by Democratic Gov. Jay Nixon, the Republican-led General Assembly rejected federal support provided by the Affordable Care Act that would have paid the full cost of coverage for three years, beginning Jan. 1, and 90 percent thereafter. Many conservative Republicans argued that costs of expanding Medicaid eligibility to thousands of lower-income adults would not remain low and that the program needed to be reformed. In December, a new study by the Commonwealth Fund showed that Missouri stands to lose $2.2 billion a year in federal money by 2022. The legislature also declined to set up a state health insurance exchange, leaving the federal government to run Obamacare in Missouri. Meanwhile, more than 4,100 Missourians had picked a health insurance plan through healthcare.gov by the end of November, and nearly 63,000 individuals applied for coverage.
4. Proposals to cut income taxes, raise sales tax both end in defeat
The General Assembly passed legislation to cut the state income tax for individuals and corporations and rejected a bill that would have raised the state sales tax by a penny and used the revenue to improve the transportation system. But Gov. Jay Nixon vetoed the tax cut bill and the House fell short of the votes needed to override the veto. The bill would have cut individual and corporate income taxes over 10 years. The potential hit to state revenues was the focus of much of the debate. A filibuster by Republicans in the Senate stopped consideration of a one-cent sales tax increase for transportation. The bill would have required voters to approve the tax, which could have raised about $8 billion over 10 years.
5. Monsanto expands in Missouri amid multiple challenges
This was quite a year for Monsanto. The world’s largest seed company: won a landmark case in the U.S. Supreme Court; announced a major expansion at its Chesterfield research facility; bought a weather forecasting company; dealt with protests outside its headquarters by anti-GMO demonstrators and faced lawsuits by farmers claiming Monsanto’s genetically engineered wheat was found in fields where conventional wheat is grown. The U.S. Supreme Court’s ruling that an Indiana farmer violated Monsanto’s patent on soybeans by planting the offspring of those soybeans without permission is being heralded as a big victory for the biotechnology industry. Supporters of Creve Coeur-based Monsanto, from Microsoft to the University of Missouri, said a decision for the farmer would have struck at the core of Monsanto’s business.