Olympia Business Watch

Could growing fleet of Northwest wind turbines be too much of a good thing?

It's possible, AWB President Don Brunell writes in his weekly column.

The reason is due to the volatile nature of wind power. If the wind is blowing too strong or too weak, wind turbines cannot operate. That means energy suppliers need to have a backup source ready to go.

Ironically, the more wind power we add, the more backup power is required.

For now, that largely means hydropower here in Washington. But the long-term future of hydro is uncertain, Brunell writes. The Bonneville Power Administration says that reserves are dwindling, and they could diminish even faster if U.S. District Court James Redden has his way and more water is spilled through the dams for migrating fish without going through electric turbines.

Natural gas is another option, but that means clean, renewable wind power will leave a greater carbon footprint.

Fortunately,  here in Washington there is a solution, Brunell writes: Nuclear power.

Read the full column here.

Washington Business Magazine continues to detail Washington leadership in "Green Transportation" technology development

In the upcoming issue of Washington Business magazine, Association of Washington Business writers continue to explore our state's leadership role in development of more fuel efficient and alternative fuels cars, trucks, tugs and airplanes.   The Spring Issue features Seattle-based Foss Maritime's hybrid tug which exceeds all EPA air quality standard. 

According to the story by Daniel Brunell about the new Carolyn Dorothy tug built by Foss at its Rainier Shipyard on the Columbia River in Oregon, the hybrid is powered by two smaller diesel engines with auxiliary engines and batteries to power the vessel when it needs full power to maneuver large ocean-going ships in harbors, rivers and narrow passages.

"It (hybrid tug) is estimated that particulate matter and nitrogen oxides are reduced by 44 percent....These initial estimates show that carbon dioxide and sulfur dioxide are reduced by 20 to 30 percent," Brunell writes.

In the 2009 Fall Issue of Washington Business, writer Jason Hagey detailed Bellevue-based PACCAR's technology development center in Renton where it is developing hybrid and alternative fuel over-the-road and industrial trucks, which like Foss' new hybrid tug and Toyota's Prius, draws upon the power only when it needs it. In fact, PACCAR has a 185 hybrid truck order from Atlanta-based Coca Cola.

AWB's commitment to supporting more fuel efficient transportation as a future cornerstone of our new green economy actually started with the roll out of Boeing's new 787 and that was detailed in the 2007 Summer Issue of Washington Business magazine by writer Charles Henry Thomas.  The 787 is made from carbon fibers with are lighter and stronger than the aluminum and steel used in current aircraft and as a result, the 787 is 20 percent more fuel efficient. It is pictured here taking off from Everett's Paine Field on its maiden flight last December.

Finally, because of an abundance of low cost, reliable greenhouse-gas free hydro power,  SGL and BMW recently announced it is building a carbon-fiber plant in Moses Lake.  The plant, if successful, will be expanded four or five fold to employ more than 500 people to make the carbon fibers for BMW revolutionary Megacity car--a small, electric vehicle used in commuting. That story is detailed on Olympia Business Watch, AWB's blog.

AWB is committed to insuring that Washington's emerging green economy leads our state forward.  If you are not currently receiving Washington Business magazine, please let us know. Look for the Spring Issue of Washington Business magazine with the Foss story in mid-May.

Don C. Brunell, President (DonB@awb.org)

   

WA tax system in top 5 for small business, but still has room for improvement

A report released this week rates Washington's tax system fifth-best in the nation for entrepreneurship and small business.

The Business Index 2010, produced by the Small Business & Entrepreneurship Council, ranked Washington behind South Dakota, Texas, Nevada and Wyoming for having the best overall tax structure.

That's good news, and will no doubt prove helpful in attracting new businesses. Neighboring states did not fare nearly as well in the analysis: Oregon ranked No. 43 on the list, five spots ahead of California at No. 48. Idaho came in 39th. The District of Columbia ranked last.

Washington's lack of a state income tax appeared to be a major factor behind the strong showing. None of the states that ranked in the top five have an income tax, and seven of the top 10 states lack a state income tax.

Of course, that could change soon if Initiative 1077 makes it onto the ballot this fall and is approved by voters.

Also, the report doesn't erase concerns about a number of other cost factors that pose challenges for Washington businesses.

Chief among them are workers' compensation -- which the study did not consider as one of the 16 comparison measures -- and unemployment insurance. Washington is second highest in the country in workers' comp rates behind Alaska, and the state came in No. 44 on the rankings for the best unemployment tax rates according to the WashACE Redbook.

Washington is a great state, and it's nice to receive to receive recognition.

Let's hope our lawmakers don't celebrate for too long when there's still plenty of work to be done.

The Department of Commerce press release on the report is available here.

John Cook, executive editor of TechFlash, blogs on it here.

Walmart gives over $5 million to Washington charities and $467 million nationally

Walmart announced its charitable giving in the U.S. totaled more than $467 million in cash and in-kind gifts in fiscal year ending 2010 (FYE10, Feb. 1, 2009 to Jan. 31, 2010)—an $89 million increase over the previous year’s giving. In international markets, Walmart gave $45 million in cash and in-kind gifts.

In Washington, Walmart and its Foundation gave more than $5 million, supporting non-profits like Farestart, Hopelink, Second Harvest Inland Northwest, JM Perry Institute of Trades Industries & Agriculture, Washington Apple Education Foundation, and others.  

In the U.S., Walmart doubled donations to food banks at a time when they are being accessed more than ever. Giving more than 127 million pounds of nutritious food—the equivalent of nearly 100 million meals—from Walmart stores, Walmart distribution centers and Sam’s Club locations, Walmart increased food donations by 81 million pounds over its FYE09 totals.

In addition, Walmart associates in the U.S. donated more than 1.5 million volunteer hours last year, a 25 percent increase over the previous year. As the company continues its commitment to operating globally and giving back locally, it will look to associates to play a more active role in grant making during FYE11 with $5 million in local grants being decided based on associate online voting.

Walmart was one of the first American companies to respond to the massive Haiti earthquake donating over $600,000.  It donated a half million in cash and $100,000 in package food kits.  It also was a company which immediately responded with relief during Hurricane Katrina in New Orleans and in Lewis and Grays Harbor counties (pictured at left) during the massive December flood in 2007.  Walmart has been recognized by AWB with repeated community service awards.

Don C. Brunell, President (DonB@awb.org)

"We're Still Hurting in Southwest Washington"

In the Sunday edition of The Columbian, Vancouver's daily newspaper, the headline reads:  "We're Still Hurting...(Clark) County sees few gains."

The Columbian Report stated:

“We’re still hurting,” said Scott Bailey, Southwest regional economist for the Washington Employment Security Department. “The unemployment rate is still close to a record high and the initial unemployment claims are lower than a year ago but still very high.”

According to The Columbian, "Clark County’s economy made modest gains in a few sectors, including health care and electronics manufacturing — the latter of which benefited from a 56 percent rise in global semiconductor sales. Home sales and home construction also both enjoyed large gains in the first quarter of 2010, compared with the same quarter of 2009."

"But those slight improvements were largely overshadowed by the broader job market, which continued to deteriorate."

Clark County lost about 3,600 jobs between December and March (2010) as the unemployment rate climbed to an unadjusted 14.8 percent in March from an adjusted 14.3 percent in December. That’s compared with a jobless rate of 12.8 percent in March 2009.

The bright spot in the county economy, for a few quarters running now, has been semiconductor manufacturing. Chipmakers and their suppliers, including giants SEH America and Linear Technology, began to ramp up production in the fourth quarter of 2009 and reported a return to full capacity in the first quarter. That finally registered in the employment numbers in March, as the industry added 100 permanent jobs after months of hiring temporary workers.

While there are signs that our economy is starting to improve--which is very good news--the recovery is fragile and, depending upon where you live in Washington, it maybe slow and weak.  Southwest Washington is an important economic bellwether. Vancouver is our state's fourth largest city and part of the Portland-Vancouver metro area which has been stung hard by the economic downturn.  Roughly, a quarter million people work in Clark County.

The point for elected officials is costs matter whether they are state and local taxes, permit fees and the associated costs of compliance, the price and availability of energy (particularly electricity), or workers' compensation or unemployment insurance premiums.  The higher, time consuming and more restrictive costs of compliance are, the more they impact competitiveness and jobs.  As the political campaigns heat up for the August primary elections, it is important for candidates to keep in mind that "we are still hurting!" Costs of doing business matter.

Don C. Brunell, President (DonB@awb.org)

Brunell: It's a mistake for Obama to abandon the moon

Canceling the Constellation program -- the successor to America's space shuttle program -- is a huge mistake, AWB President Don Brunell writes in his weekly column.

President Obama wants private companies to take over shuttling astronauts and cargo to the International Space Station, but until that happens the U.S. would pay $50 a pop for astronauts to hitch a ride on Russian spacecraft.

In abandoning a lunar program, the president missed the point, Brunell writes. It's not about "been there, done that." It's about having a place from which to launch deep space missions -- like his mission to Mars.

The moon also is a potential source of renewable energy, both as a place to capture solar energy and Helum 3, which is rare on Earth but plentiful on the moon.

Obama's proposal just doesn't make sense, Brunell writes. Hopefully Congress will listen to the astronauts who oppose his proposal before it's too late.

Read the full column here.

Brunell: We need more Lynn Kesslers in public service

News that Rep. Lynn Kessler, D-Hoquiam, is retiring is good for her and not so good for the rest of us, AWB President Don Brunell writes in his weekly column.

Kessler, like retired Washington lawmaker Sid Snyder -- another Democrat from the Southwest part of the state -- lived by the mantra that people can disagree without being disagreeable, Brunell writes.

Kessler excelled in part because she was a good listener. She also took responsibility.

Perhaps she will continue to serve as a bridge between the urban and rural Washingtons through her work on the state's Sunshine Committee, Brunell writes.

"Most of all, we need to continue the civil and respectful way she approached governing, working with the opposition and listening to people," he writes. "We don't need, nor do we deserve, the bitterness, political gamesmanship and disrespect so prevalent today, particularly in Washington, D.C."

Read the full column here.

Legendary Astronauts Take President Obama to Task Over No Return to Moon and Difficulty of Servicing Space Station

 

At AWB's Policy Summit last September, astronaut Harrison “Jack” Schmitt, one of the two last humans to walk on the Moon, gave a pretty bleak report on the future of America’s space program.  Schmitt's concern was the lack of a replacement orbiter for the Space Shuttle, which is scheduled to be mothballed next year, and President Obama's abandonment of the Constellation program which would return U.S. astronauts to the Moon, basically ceding that space territory to Russia, China and others.

 

Schmitt’s statements were followed by a call to action by John Glenn, the first U.S. astronaut to circle the Earth.  Glenn called upon Congress to put $5 billion into the Space Shuttle program to refurbish the three remaining orbiters which are scheduled to be retired in late 2010 leaving America with the inability to transport astronauts to the International Space Station. America would contract with Russia to transport U.S. astronauts to the Station.

 

Now other U.S. astronauts are joining Schmitt and Glenn.  NBC obtained a letter to President Obama written by Neil Armstrong, James Lovell and Eugene Cernan who believe the United State ought to return to the Moon and forge ahead on the Constellation Program.  They urge President Obama to reconsider what they warn would be “devastating” new policies for the future of NASA.

 

Boeing has played a major role in the development of components for the International Space Station (ISS), which 15 nations jointly operate.  The key leaders are the U.S. and Russia.

 

The future of our space program is important to our nation and to the  many space contractors and people like astronaut Dottie Metcalf-Lindenburger, many of whom are located in Washington.  Dottie, a Hudson Bay High School science teacher (Vancouver, WA), is aboard the Space Station as part of the current STS 131 mission.  As of now there are four Shuttle missions remaining and then it is up to Russia to get us to and from the International Space Station.

 

Hopefully, Congress will allocate enough money to keep the human space program safely going until the next generation of orbiter comes on line and that it will accelerate the development of the Constellation. America has come too far on its space program to let it languish.  There is too much at stake for the future.

 

Don C. Brunell, President (DonB@awb.org)

How did business fare in the 2010 Legislature? Depends on your business

Lawmakers avoided a general tax increase.

But that doesn't mean they spared the state's economy.

Service businesses ended up taking the brunt of the tax increases in the $757 million package approved by lawmakers Monday to end the 2010 special session.

Accountants, architects, lawyers, doctors, hairdressers, graphic designers, optometrists and veterinarians -- almost any business that does not charge a sales tax -- will see a temporary three-tenths percent increase in their business-and-occupation tax. It's expected to raise $242 million by the end of the 2009-2011 budget.

Other taxes in the package hit buyers and sellers of candy, soda, chewing gum, bottled water, cigarettes and beer.

Lawmakers also:

• Increased the tax on direct sellers such as Mary Kay and Avon, raising $155 million in the current budget.
• Changed the standard for applying business-and-occupation taxes from having a physical presence in the state to having an economic presence. The so-called "economic nexus" will raise an estimated $85 million in the current budget.
• Gave the Department of Revenue greater authority over certain business transactions, which will generate an estimated $8.5 million in the current budget.

BMW sees value of Washington's clean hydropower - why don't our own lawmakers?

Clean, renewable, low-cost hydropower has fueled Washington's economy since the first generators started spinning at the Grand Coulee Dam in 1942, AWB President Don Brunell writes in his weekly column.

It's still a major influence, decades later.

Just this week, "greenhouse gas-free" hydropower was cited as the primary incentive for German manufacturers SGL and BMW to announce plans for a $100 million carbon fiber manufacturing plant in Moses Lake.

So, Brunell asks, if German executives could see clearly from 5,000 miles away the advantages of low-cost electricity from Grant County's Wanapum and Priest Rapids dams, why isn't it considered a renewable energy in our state?

Why are there still some who want to remove the four lower Snake River dams, and restrict generating capacity from the Columbia River?

"In a state where the cost of doing business is high, a reliable supply of affordable energy is the key to our future," Brunell writes.

Read the full column here.

New Moses Lake Factory to Manufacture Carbon Fibers for BMW Big City Electric Cars of Future

Today, officials from a joint venture between German companies SGL and BMW announced a new $100 million factory in Moses Lake which will produce carbon fibers for BMW's new Megacity electric auto which will be introduced to the driving public in 2015.  The announcement was made at a Seattle press conference with Gov. Chris Gregoire.

The companies picked Moses Lake from a number of other sites primarily because of the abundance of low-cost, reliable hydropower which produces no greenhouse gases such as carbon dioxide.  Dr. Friedrich Eichiner, a member of the BMW Board Management, told those attending the Seattle press conference:

"Moses Lake is, in fact, the ideal location for SGL Automotive Carbon Fibers (LLC), it has a skilled workforce and excellent infrastructure.  What's more, the environmental conditions are perfect:  I'm excited to say that the energy required for production will be generated by eco-friendly hypropower."

The carbon fiber going into the new BMW electric is similar to that which is being used on Boeing's new 787.  It is stronger than steel and aluminum and it is 70 to 80 percent lighter than steel and 40 to 50 percent lighter than aluminum, yet like aluminum and steel it requires a great deal of electricity to produce.  Grant County PUD has that power from its Priest Rapids and Wanapum dams on the mid-Columbia River.

The raw material for the carbon fibers will be manufactured in Japan and then shipped to Moses Lake for processing into fiber. The fiber will be then sent to Germany for shaping into auto parts.

Groundbreaking on the Moses Lake plant is scheduled for June and it will employ 150 construction workers at its peak.  When completed, there will be 80 permanent workers at the plant.  If all goes well, there are expansions planned at Moses Lake.

AWB's leaders attended the press conference. 

“Today is a bright spot in what has been an otherwise challenging economic time,” added Don Brunell, AWB President. “It is, however, important that we protect and enhance the business conditions that led SGL and BMW to select Washington state. We hope this is just the first of many more positive economic announcements to come.

"It is important to understand just how important hydropower is to our economic development. Without low cost electricity, greenhouse free water power, our state and region lose its competitive attractiveness,"  Brunell concluded. "Make no mistake the Columbia and Snake rivers are the primary power generators in the system."

Moses Lake chosen to build key components of BMW Megacity electric car

Moses Lake will help build the Megacity.

German carmaker BMW and its partner SGL Group announced today that Moses Lake will be the site of a cutting-edge carbon fiber manufacturing plant.

The $100 million plant will employ about 80 workers to produce state-of-the-art lightweight carbon fiber components for use in the Megacity Vehicle, an electric car that BMW plans to launch before 2015 under a sub-brand, possibly called Isetta after the three-wheeled BMW microcar of the 1950s and '60s.

Groundbreaking is scheduled in June at the plant's 60-acre site.

The Megacity represents BMW's move toward what it calls "sustainable mobility," but it isn't just the car that's environmentally friendly.

Moses Lake was chosen for the plant largely because of the availability of renewable, clean and low-cost hydropower, said Dr. Friedrich Eichiner, BMW AG's board member for finance, according to the Associated Press.

The company also cited a skilled work force and state and local government's cooperation with permits.

In addition, state officials pledged $2 million in funding toward a $7 million substation for the plant, according to the Puget Sound Business Journal.

Brunell: Washington state has a lot riding on sucess of Boeing 787

Boeing now has six new 787s in various stages of test flights, and plenty of reasons for optimism, AWB President Don Brunell writes in his weekly column.

• After two years of delay, the company's order book is holding firm for more than 850 planes.
• Despite the disappointment of watching a second production line go to South Carolina, Washington still is home to 72,000 Boeing workers, more than twice number of manufacturing jobs in the entire state of Montana.
• The Dreamliner and the manufacturing plant that produces it are shining examples of innovation, both in the product itself and the way it's produced.

So where is all of this headed? Brunell asks.

For a fight. Our elected officials must lead that fight to keep those 72,000 family-wage Boeing jobs in Washington by reducing costs for business and easing the regulatory burden.

Other places will fight to get those jobs, Brunell writes. Are Washington's leaders fighting just as hard?

Read the full column here.

April Fool's Day leads to some funny business

A Plenta with four Splendas?

Sounds like it could be a real drink, but the introduction today of two new drink sizes -- the popcorn tub-sized Plenta (128 fl. oz.) and thimble-like Micra (2 fl. oz.)-- was actually an April Fool's Day prank from Starbucks.

Plenty of other corporations got into the spirit as well, joining in the time-honored tradition of fake news and politically charged humor.

Among the highlights:

Google changed its name to Topeka, a nod to the contest in which cities are vying to be chosen as the site for the company's pilot high-speed Internet program. Topeka, Kan. renamed itself Google as part of its campaign.

Kodak unveiled "Aromatography," a so-called breakthrough in digital imaging processing that allows users to smell photographs.

Ben & Jerry's announced "ice screen," the world's first virtual ice cream. Computer users click a button to "activate" the treat and are then invited to lick the screen.