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From strikes and plant closings to a new CEO at Cummins, a booming job market and record heat, Columbus experienced an exciting year in business. The year’s top local business stories:
Dolly Madison’s demise
More than 200 local workers lost their jobs in November when Hostess Brands shut down all of its production plants, including the Dolly Madison bakery on National Road in Columbus.
In operation since 1960, the local plant was closed after members of Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike nationwide to protest a court-imposed contract that lowered wages and cut pension benefits.
The plant remains closed, its future uncertain.
Cummins Inc. had an exciting and, toward the end, tumultuous year.
Cummins began its year with a new chief executive, Tom Linebarger, after longtime CEO Tim Solso retired. The company reported that 2011 had been its best year ever, with $18 billion in revenues and $1.85 billion in profit. In the first quarter, the success story continued, with the best-ever first-quarter results.
The company’s success spurred hiring around the globe, including in Columbus and Seymour, where Cummins in April announced a $219 million expansion in its high horsepower campus. Seymour Engine Plant employees got a boost in June when they were visited by the crew of the crab fishing boat Time Bandit, stars of the Discovery Channel show “Deadliest Catch.”
In July, Cummins announced it was planning to host a marathon in Columbus in late 2013.
In October, however, prompted by a weakening global economy, Cummins lowered its sales and earnings expectations for the year and said it would reduce its workforce by up to 1,500 by the end of the year. The company later said it would reduce the workforce in Columbus by 150. Nonetheless, the company expects to produce revenues of $17 billion this year, which would make it the company’s second most successful year in history.
Buoyed by a strong automotive sector, the Columbus metro area in the past two years gained jobs at a faster pace than any other of the nation’s 366 metropolitan areas. Local employers added 7,300 jobs in the two years before November, a growth rate of nearly 17 percent, according to data from the U.S. Bureau of Labor Statistics.
The local labor force and the number of local jobs hit all-time highs in July, and the unemployment rate in October fell to 5.4 percent, the lowest in four years. Two issue remain: Nearly 2,300 people were reported jobless in October, about 450 people more than four years ago, and local employers are struggling to find enough people with advanced enough skills for today’s advanced manufacturing jobs.
Despite the job market challenges, large and small employers continued to invest in the Columbus community, pumping in millions of dollars for construction and equipment, and adding millions in annual payroll.
A few examples:
The job growth and investments also lured new retailers, such as Sidekick Comics, and new restaurants, such as PhoShiki, but the growth also increased competition for local homes and rental units, which posed challenges especially for Cummins, which brought about 350 interns to the city over the summer.
Meanwhile, a shortage of builders in Columbus, caused by the recession, contributed to the area’s tight housing market. Increased demand for new housing has prompted builders to focus more time on custom-built homes for individual clients. That’s in contrast to years past, when the volume of spec homes, those built on speculation without a particular buyer in mind, was much higher as builders looked for ways to keep crews busy during slow buying periods such as winter.
Nonetheless, permits for home construction rose significantly from last year. In March, the Bartholomew County Code Enforcement Office issued 38 permits for new home construction, the highest number in a month in three years.
Lack of snow, record heat and drought combined to pose problems for snow removal companies, arborists and farmers this year.
March ranked as the warmest March on record in Columbus and in the state, with seven days setting record high temperatures for the city. On Memorial Day, the mercury climbed to a record 92 degrees. On June 28, it topped 100. June also ranked as the third-driest June in Columbus in the 119 years of record-keeping. At Rose Acre Farms, 300,000 laying hens died from the heat in August.
The drought depressed corn yields to about 35 percent below average in Bartholomew County, but late-summer rains boosted soybean yields to just below average.
Natural gas boom
Companies including Cummins Inc. and Honda are banking on natural gas-powered vehicles as a big growth opportunity. Cummins announced in March that it will begin producing a 15-liter natural gas engine in 2014, to be used in long-haul trucks. And Honda for years has produced a natural gas-powered Civic, which is manufactured in Greensburg. Other automakers are jumping on the bandwagon. Ram has made a natural gas-powered pickup truck. Chevy is selling natural gas-powered vans.
Abundant domestic reserves and new — though environmentally controversial — excavation methods have cut natural gas prices in half in the past few years, and owners of trucking fleets have taken notice.
Monarch Beverage, the state’s largest beer and wine distributor, announced this month that it would switch its trucking fleet from diesel to natural gas engines by Cummins joint venture Cummins Westport. Until then, natural gas engines had proved popular mostly with municipal transit fleets on the coasts, which had bought the natural gas vehicles primarily for environmental reasons. Monarch, however, a company in the Midwest, is switching to natural gas to protect the environment and to save money, in what Cummins hopes is a sign of things to come.
Bartholomew County gained three microbreweries in 2012 and now has four, which is more than any of the state’s counties except Marion.
Zwanzigz added the brewery to its pizza restaurant. Simmons Winery added a restaurant and 450 North Brewing Co., and partners in Hope joined forces to start Hawcreek Brewing Co.
No locally-based banks
With the sale of Indiana Community Bancorp to Old National Bancorp, Columbus lost its last locally based bank. Meanwhile, state and regional financial corporations, including First Financial, Old National and MainSource, have taken advantage of the demise of ICB and Irwin Financial.
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