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MONDAY, JUNE 25, 2018 | IN THIS ISSUE
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ABI survey: Business enthusiasm riding high amid trade worries
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Mike Ralston
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Survey results released by the Iowa Association of Business and Industry (ABI) today found members are enthusiastic about the state's continued economic growth.
"There's a general feeling of enthusiasm about Iowa's economy right now," said Mike Ralston, ABI president, in a release accompanying
survey results. "Overall, business leaders feel really good about where we are and where we're heading."
Even so, Ralston cautioned that concerns about federal trade policy have the potential to dampen that enthusiasm.
"Pending tariffs are top of mind for our members," he said.
Manufacturers, whose products heavily rely on aluminum and steel, make up approximately 50 percent of ABI's membership.
ABI surveyed its board members in June 2018. Key findings included:
- 74 percent of survey respondents expect sales to expand over the next year and 20 percent expect sales to stay the same.
- 54 percent of survey respondents expect the number of employees in their business to grow over Q3 and 46 percent expect the number to stay the same.
- 74 percent of survey respondents plan to make capital expenditures in Q3.
- A shortage of skilled labor, rising material costs and concerns about pending tariffs were identified as top issues for survey respondents in Q3.
This is the third quarter in a row ABI has quizzed Iowa business leaders. The numbers, as well as top issues identified, were consistent with the findings of the Q2 survey results.
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IEDA board moves forward on rules for apprenticeship fund
The Iowa Economic Development Authority board moved forward on a set of rules for the state's new Registered Apprenticeship Development Fund at their monthly meeting Friday.
IEDA officials said pushing ahead with rules for the new fund
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supports an aggressive goal to open the funding application period for this new program in January 2019."
The fund, established by Gov. Kim Reynolds' Future Ready Iowa Act, was passed in both the Iowa House and Iowa Senate with unanimous, bipartisan support.
The goal of Future Ready Iowa is 70 percent of Iowa workers having education or training beyond high school by 2025. In order to reach that goal, another 127,700 Iowans need to earn post-secondary degrees or other credentials.
Also at their Friday meeting, the IEDA board awarded
direct financial assistance and tax benefits to five companies for job creation and expansion projects. These awards will assist in the creation of 277 jobs, retention of 52 jobs and will result in nearly $193 million in new capital investment for the state.
The board approved assistance for planned or proposed projects located in Corydon, Council Bluffs, Nevada and Sioux City.
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This week's CBJ: Zero Energy 'walled out' in refinancing dispute
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Zero Energy Systems' factory and headquarters at 428 Westcor Dr. stands silent and unoccupied after closing in mid-May, eliminating 62 jobs and leaving customers who'd paid deposits without the walls they ordered.
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Three months after its lender foreclosed, the financial challenges that brought Zero Energy Systems in Coralville to a standstill have become clearer, but the future for what was once one of Iowa's promising "green" companies is more clouded than ever.
Efforts to rebuild the crumbling financial foundation of Zero Energy Systems (ZES) in bankruptcy have been dropped in favor of plans to liquidate. Negotiations toward a global settlement of the bankruptcy case have been abandoned. ZES' owners are fighting the foreclosure in state court, and customers who ordered the company's walls are in limbo as its factory in Coralville's Westcor industrial park stands idle.
ZES manufactures precast concrete walls with built-in insulation that offer strength, resistance to threats like wildfires, tornadoes and hurricanes, and a high R-value for energy efficiency. They come out of a highly automated manufacturing system with attachment points and openings for windows and doors already built in. Once finished, they are shipped to construction sites by truck and hoisted into place with a crane.
ZES founder Scott Long and partner Manoj Krishan of Houston opened the Coralville factory in 2014, based on wall technology developed by Mr. Long's father, and his own work over much of the preceding decade producing a system to take designs directly from CAD/CAM software into automated production.
The venture received strong support from local government and economic development agencies, including millions in tax increment financing and a $600,000 forgivable loan from the city of Coralville, and $250,000 from the Iowa Economic Development Authority. At a ribbon-cutting, then-Gov. Terry Branstad called the plant "a model of innovation, ingenuity and problem-solving."
By 2018, ZES had 62 employees and a growing list of customers. The company's cash flow was not keeping up with its growth, however, and signs of trouble began to surface in February.
Read the full members-first story in this week's print or digital edition of the CBJ.
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Retailers lament SCOTUS decision on credit card fees
Calling it a
"missed opportunity to rein in billions in credit card fees, t
he National Retail Federation is criticizing today's
U.S. Supreme Court decision in favor of American Express
rules that prevent retailers from encouraging the use of other credit cards with lower processing fees.
The national retailing organization said the decision perpetuates a system that costs merchants and consumers billions of dollars a year.
"Today's ruling is a blow to competition and transparency in the credit card market," NRF Senior Vice President and General Counsel Stephanie Martz said in a statement. "The American Express rules in question have amounted to a gag order on retailers' ability to educate their customers on how high swipe fees drive up the price of merchandise."
Ms. Martz said by denying merchants the right to ask for another card or offer an incentive for using a preferred card, the Supreme Court undermined the principle of free markets, adding "This misguided decision represents a missed opportunity to take a stand in favor of free markets and bring soaring credit card fees under control."
When consumers use a credit card to make a purchase, merchants are charged a "swipe" fee to process the transaction. The fees are a percentage of the transaction, NRF officials said, adding up to more than $70 billion a year nationwide and forcing retailers to build the fees into the price of merchandise.
The fees average about 2 percent of the transaction, but American Express has traditionally had higher fees, with Visa and MasterCard in the middle and Discover the lowest. Amex, Visa and MasterCard previously had rules prohibiting merchants from encouraging customers to use lower-fee cards, but Visa and MasterCard dropped the restriction in a 2010 settlement with the Justice Department.
Amex refused to do the same, and was sued by the Justice Department. A U.S. District Court judge ruled in 2015 that the Amex rules were a
violation of federal antitrust law
, but Amex appealed and a three-judge panel of the 2
nd
U.S. Circuit Court of Appeals ruled in its favor in 2016. Eleven states that had joined the Justice Department lawsuit appealed to the Supreme Court, which agreed to take the case last fall.
NRF has
argued in court
that the Amex rules have helped the card company avoid pressure to reduce the fees it charges merchants and, in turn, has reduced incentives for Visa, MasterCard or Discover to do the same. In a
friend-of-the-court brief
filed late last year, NRF and other retail groups said the Amex rules "lead to increased prices for all consumers."
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Taylor neighborhood to get a facelift during Transform Week
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Matthew 25 volunteers will be helping out residents in Cedar Rapids' Taylor neighborhood this week as part of its third annual Transform Week.
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Hundreds of volunteers will come together to help their neighbors this week as part of Matthew 25's third annual Transform Week. The week focuses on homeowners in the Taylor neighborhood who need support.
"Cedar Rapidians are amazing," Clint Twedt-Ball, executive director of Matthew 25, in a release. "If you raise your hand and ask for help, they consistently turn out in droves to do whatever they can. Transform Week is a testimony to the tremendous spirit of our community."
This year the number of projects has increased by 50 percent, with house painting, replacement flooring, plumbing and electrical system repair, roof repair, landscaping and other tasks on the agenda.
Fixing up these homes will help some homeowners stay in the neighborhood so they can continue to support their families, friends, and the community. The service is free, thanks to volunteers and the generous support of presenting sponsor Ingredion and others.
One of the neighbors whose home will be a part of Transform 2018 was among the first Somali refugees in Cedar Rapids, arriving in 1996. After working hard at two jobs, she finally started to feel established, owning a fully furnished home and car on the southwest side of Cedar Rapids - and then the 2008 flood hit. The home she's living in now, while not the same one that she was in at the time of the flood, still has lingering damage from the flood.
Another neighbor's home sustained damage from the flood and was in the process of foreclosure. She moved out, thinking that the bank now owned the home. Last year the bank told her it was still hers. In the meantime the home had been occupied by squatters and was stripped of anything of value, including doors, fixtures, trim, heat vents, wires, and pipes. She has been working diligently to bring the house back to life, including getting electrical, plumbing, and gas hooked back up, but there is still much more work to be done. Transform volunteers will help continue this work by replacing the windows and doors, rebuilding the porch, and more.
Matthew 25 is raising funds to cover the cost of materials for this project and using volunteer power to follow through with the projects. If you are interested in being a part of the transformation either financially or as a volunteer, please reach out to Matthew 25 at [email protected] or by phone at 319-362-2214, or sign up at www.hub25.org. Sponsorship opportunities are also available.
CLARIFICATION
A brief in the June 22 CBJ Business Daily inadvertently implied Johnson County supervisors were encouraging businesses to match their new hourly wage of $14 an hour for county employees. Supervisors are recommending businesses and employers raise their hourly rate to $10.27 an hour.
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Ribbon Cutting: Dupaco Credit Union, by Marion Chamber of Commerce, 4-6 p.m., 5970 Carlson Way, Marion. Help welcome the Marion branch of Dupaco Credit Union to the business community. Free. For more information, visit
bit.ly/2JkhW73.
Ribbon Cutting: Snyder & Associates, by Iowa City Area Chamber of Commerce, 4 p.m., 320 E. Prentiss St., Iowa City. Help celebrate the opening of Snyder & Associates' new Iowa City office. Free. For more information, visit
bit.ly/2MsFg1d.
June 27
1 Million Cups, by 1MC, 9-10 a.m., Geonetric, 415 12th Ave. SE, Cedar Rapids and MERGE, 136 S. Dubuque St., Iowa City. Join for community connections, startup pitches and free coffee. Free. For more information, visit
facebook.com/1MCICR.
How to Build a High-Performance Culture, by Holmes Murphy, 10-10:45 a.m, online. This two-part webinar series will walk through the foundational elements of building a high-performance team and the leadership principles necessary to drive culture, expectations and behaviors that can help your company reach its top potential. Free. For more information and to register, visit
bit.ly/2MFNaEQ.
Mid-Year Economic Review, by Corridor Business Journal, 11:30 a.m.-1:15 p.m., The Hotel at Kirkwood Center, 7725 Kirkwood Blvd. SW, Cedar Rapids. The Mid-Year Economic Review
will examine how the economy has changed since January's Economic Forecast Luncheon and look ahead to the second half of the year. Robert Baur, executive director and chief global economist with Principal Global Investors, will be the keynote, followed by a panel of local business leaders moderated by Jack Evans, president of The Hall-Perrine Foundation. Tickets: $65, or $650 for a table of 10. To register, visit corridorbusiness.com/events or contact
[email protected].
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Headlines from CBS2/FOX 28
These news items are provided by CBS2/FOX 28
A family who came to the United States with a dream of a better future for their children are now one step closer to that goal thanks to a home building organization in the Corridor. Martine and Dieudonne Mwanza say they moved to the United States with hopes of laying a new foundation for their family. Dieudonne moved to the US ten years ago and Martine followed after five years after with their now 8-year old son Antoine. "I get to have my own room and no one can bother me," said Antoine Mwanza. He's never know what having his own room is like, but thanks to the Iowa Valley Habitat for Humanity's Women Build program, that's about to change. "We are excited for how they're going to build us our own house," said Mwanza.
Antoine's family consists of his mother, father, and his two younger sisters. He, his mother, and his father were born in the Democratic Republic of Congo. "It's really hard for a family like theirs to believe that this was even something that they could achieve, so we're really happy to be able to help their family," said Tami Bonnett, the Development Director at the Iowa Valley Habitat for Humanity.
Just before 11 Saturday morning, Linn County officials responded to a motorcycle crash on Highway 1 at the intersection of Butcher road. Fifty-six-year-old Thomas Auner of Tiffin was driving northbound on a motorcycle when he collided with a westbound pickup.
Mr. Auner was airlifted to University of Iowa hospitals and clinics with life-threatening injuries. Officials say Mr. Auner did not appear to be wearing a helmet. Sixty-two-year year old Carol Brannaman was driving the pickup truck and was transported by ambulance to Jones Regional Hospital in Anamosa with non-threatening injuries. The incident is still under investigation by the Linn County Sheriff's Office.
T
hese news items are provided by CBS2/FOX 28
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CBS2 Chief Meteorologist Terry Swails' Weather First Forecast
Summery weather will be returning to eastern Iowa this week with storms, heat and humidity.
It will be mostly cloudy and breezy today with temperatures in the mid to upper 70s this afternoon. A warm front will be lifting north into southern Iowa late this afternoon and lead to thunderstorms this evening. Storms will develop after 7 p.m. and some could produce strong winds and locally heavy rain. Storms will continue into Tuesday morning and then there will be another round of storms as a cold front moves through. Some of these storms could be strong once again, but the strength will depend on the timing of the cold front. The front will move through late Tuesday night, but will not bring cooler air. In fact, it will start to heat up toward the end of the week. Temperatures will be in the 80s and 90s and humidity will be high. This will create heat index values in the upper 90s to 100s.
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