A continued decline in the size of the workforce and the number of employed edged the Fort Smith metro jobless rate to 6.4% in June compared to 6.3% in May. The rate was lower than the 8.2% in June 2013, but the number of employed in the region fell 2.24% in the 12-month period.

June’s data is subject to revision in future reports from the U.S. Bureau of Labor Statistics.

The size of the Fort Smith regional workforce during June was 126,822, down slightly from 126,971 during May, and well below the 132,323 during June 2013, according to figures released by the U.S. Bureau of Labor Statistics. The labor force reached a revised high of 140,253 in June 2007, meaning the June workforce size is down 9.57% from the peak number.

The number of employed in the Fort Smith region totaled 118,751 in June, down from 118,929 in May, and an estimated 2,726 jobs below the 121,477 employed in June 2013.

Six of the eight metro areas in or connected to Arkansas had jobless rate increases in June compared to May, but all had jobless rate declines compared to June 2013. Northwest Arkansas and central Arkansas jobless rates in June were unchanged compared to May. During June, the lowest metro jobless rate in the state was 4.9% in Northwest Arkansas and the highest rate was 8.7% in the Memphis-West Memphis area.

FORT SMITH METRO NUMBERS
Unemployed persons in the region totaled an estimated 8,071 during June, up from the 8,042 during May, but well below the 10,846 during June 2013.

The Fort Smith area manufacturing sector employed an estimated 18,400 in June, up from 18,200 in May, and unchanged compared to June 2013. Sector employment is down almost 36% from a decade ago when June 2004 manufacturing employment in the metro area stood at 28,500. Also, the annual average monthly employment in manufacturing has fallen from 28,900 in 2005, 19,200 in 2012, and to 18,300 in 2013.

Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector —  totaled 24,400 in June, up from 24,300 in May, and above the 23,700 during June 2013. Employment in the sector reached a high of 25,700 in December 2007.

Employment in the region’s tourism industry was 9,600 during June, down from 9,700 in May and above the 9,400 in June 2013. The sector reached an employment high of 9,800 in August 2008.

In Education & Health Services, employment was 16,300 during June, down from 16,500 in May and below the 17,000 during June 2013. Annual average monthly employment in the sector has steadily grown since 2005 when it reached 14,000. In 2012 the average was 17,000, but fell slightly to 16,800 in 2013. Employment in the sector reached a record 17,300 in October 2012.

In the Government sector, employment was 18,800 during June, down compared to 19,700 in May and unchanged compared to June 2013.

NATIONAL NUMBERS
Unemployment rates were lower in June than a year earlier in 359 of the 372 metropolitan areas, higher in 10 areas, and unchanged in three areas, noted the broad BLS report.

The U.S. unemployment rate in June was 6.1%, down from 7.5% from a year earlier. Arkansas’ jobless rate was 6.2% in June, down from 6.4% in May and down from 7.6% in June 2013.

Oklahoma’s jobless rate during June was 4.5%, down from 4.6% in May, and down compared to 5.5% in June 2013. The Missouri jobless rate during June was 6.5%, down from 6.6% in May and below the 6.8% in June 2013.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
June 2014: 4.9%
May 2014: 4.9%
June 2013: 6.1%

Fort Smith
June 2014: 6.4%
May 2014: 6.3%
June 2013: 8.2%

Hot Springs
June 2014: 6.5%
May 2014: 6.4%
June 2013: 7.9%

Jonesboro
June 2014: 6%
May 2014: 5.8%
June 2013: 7.5%

Little Rock-North Little Rock-Conway
June 2014: 5.8%
May 2014: 5.8%
June 2013: 7%

Memphis-West Memphis
June 2014: 8.7%
May 2014: 7.5%
June 2013: 10%

Pine Bluff
June 2014: 8.6%
May 2014: 8.4%
June 2013: 10.5%

Texarkana
June 2014: 6.3%
May 2014: 6.1%
June 2013: 7.5%

FORT SMITH METRO AREA HISTORY
Past annual average unemployment rates
2013: 8%
2012: 7.7%
2011: 8.3%
2010: 8.2%
2009: 7.9%
2008: 4.8%
2007: 5.3%
2006: 4.9%
2005: 4.5%
2004: 5.2%
2003: 5.5%
2002: 5%
2001: 4.2%
2000: 3.7%

The Northwest Arkansas jobless rate in June was the lowest metro rate in Arkansas, but  declines continued in the size of the regional labor force and the number of employed.

The June rate of 4.9% was unchanged compared to May but below the 6.1% in June 2013.

Metro employment of 222,357 was slightly below the 222,568 in May, and also below the 223,267 in June 2013, according to figures released by the U.S. Bureau of Labor Statistics. The June numbers are subject to revision.

June marked the 12th consecutive month the NWA metro jobless rate has been below 6%, and the third consecutive month below 5%. The metro area is the only one in Arkansas to post a rate below 5%.

The size of the Northwest Arkansas regional workforce during June was estimated at 233,831, down from the 234,017 in May, but 1.63% below the 237,715 during June 2013. The average annual monthly labor size was 234,412 in 2013, 232,208 during 2012, 228,918 during 2011 and 225,974 during 2010.

Six of the eight metro areas in or connected to Arkansas had jobless rate increases in June compared to May, but all had jobless rate declines compared to June 2013. Northwest Arkansas and central Arkansas jobless rates in June were unchanged compared to May. During June, the lowest metro jobless rate in the state was 4.9% in Northwest Arkansas and the highest rate was 8.7% in the Memphis-West Memphis area.

NWA METRO NUMBERS
Following are other key figures from the BLS metro report.

Unemployed persons in the region totaled 11,474 during June, up from the 10,449 during May and more than the 14,448 during June 2013.

The Northwest Arkansas manufacturing sector employed an estimated 26,300 in June, up from 26,200 in May, and down from the 26,500 during June 2013. Sector employment is down more than 21% from more than a decade ago when June 2004 manufacturing employment in the metro area stood at 33,300.

Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector —  totaled 47,500 in June, below the 47,700 during May, and down from the 47,700 in June 2013. The sector reached record employment of 50,500 in December 2006.

Employment in the region’s tourism industry was 22,700 during June, which set a new record for the sector. The June data is subject to revision. The level was up from 22,500 in May and up from 22,000 during June 2013.

In Education & Health Services, employment was 24,500 during June, down from 24,900 in May and up from 23,600 during June 2013. The May employment, if it stands, set a new record for the sector.

In the Government sector, employment was 30,800 during June, down from 32,700 in May and up compared to 30,100 during June 2013.

NATIONAL NUMBERS
Unemployment rates were lower in June than a year earlier in 359 of the 372 metropolitan areas, higher in 10 areas, and unchanged in three areas, noted the broad BLS report.

The U.S. unemployment rate in June was 6.1%, down from 7.5% from a year earlier. Arkansas’ jobless rate was 6.2% in June, down from 6.4% in May and down from 7.6% in June 2013.

Oklahoma’s jobless rate during June was 4.5%, down from 4.6% in May, and down compared to 5.5% in June 2013. The Missouri jobless rate during June was 6.5%, down from 6.6% in May and below the 6.8% in June 2013.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
June 2014: 4.9%
May 2014: 4.9%
June 2013: 6.1%

Fort Smith
June 2014: 6.4%
May 2014: 6.3%
June 2013: 8.2%

Hot Springs
June 2014: 6.5%
May 2014: 6.4%
June 2013: 7.9%

Jonesboro
June 2014: 6%
May 2014: 5.8%
June 2013: 7.5%

Little Rock-North Little Rock-Conway
June 2014: 5.8%
May 2014: 5.8%
June 2013: 7%

Memphis-West Memphis
June 2014: 8.7%
May 2014: 7.5%
June 2013: 10%

Pine Bluff
June 2014: 8.6%
May 2014: 8.4%
June 2013: 10.5%

Texarkana
June 2014: 6.3%
May 2014: 6.1%
June 2013: 7.5%

NORTHWEST ARKANSAS METRO AREA HISTORY
Past annual average unemployment rates
2013: 5.7%
2012: 5.6%
2011: 6.2%
2010: 6.4%
2009: 6.2%
2008: 4.1%
2007: 3.8%
2006: 3.6%
2005: 3.3%
2004: 3.8%
2003: 3.7%
2002: 3.3%
2001: 3%
2000: 2.9%

The seemingly unstoppable Northwest Arkansas economy was punched in the gut Wednesday (July 30) as Superior Industries announced the closure of its wheel making plant in Rogers, eliminating 500 jobs as production is transitioned to sites in Fayetteville and Mexico.

Part of the reasoning behind the closure of the Rogers location is the age and lack of capacity in the older plant. Superior said it retooled the Rogers plant in 2013, but running at full capacity it was not able to keep pace with demand. The company doled out $18 million in the past year on the two facilities in Northwest Arkansas, and still lost marketshare because orders could not filled.

Most of the investment went to the larger plant in Fayetteville, a sign that those estimated 800 are not in imminent danger. It is not clear how many of the jobs in Rogers could be transferred to the Fayetteville site. About a year ago, Superior officials told The City Wire there were about 600 workers employed at the Rogers facility.

There were 26,300 manufacturing jobs in Northwest Arkansas as of June, this Superior closure is a 1.9% decrease in the overall sector, according to Kathy Deck, director for the Center for Economic Research at the University of Arkansas. While the news is not surprising, Deck said swallowing the losses is not easy, even for a growing economy like Northwest Arkansas.

Rogers Mayor Greg Hines issued this statement: “This is a very unfortunate and unexpected loss to the city and the region.  This underscores what I have been saying for the last several years, ‘It is just as competitive trying to keep the manufacturing jobs you have as it is to attract new ones.’ The end result of this is most likely another example of America losing manufacturing jobs to other countries instead of other towns.  The reasons for the move, I suspect, are more likely a result of the ability to reduce costs by outsourcings the work to Mexico. It is unfortunate American companies are forced to make these hard decisions in many cases just to survive. Company officials have been very complementary about the Rogers Plant and the overall business- friendly environment in Rogers. Our thoughts and prayers go out to the workers and their families.”

The Northwest Arkansas jobless rate in June was the lowest metro rate in Arkansas, but  declines continued in the size of the regional labor force and the number of employed. The June rate of 4.9% was unchanged compared to May but below the 6.1% in June 2013. Metro employment of 222,357 was slightly below the 222,568 in May, and also below the 223,267 in June 2013, according to figures released Wednesday by the U.S. Bureau of Labor Statistics. The June numbers are subject to revision.

‘NEWS IS NOT GOOD’
The loss of 500 jobs creates a big void to fill even if it is no more than part of the manufacturing ebb and flow as Deck adds that the local economy typically sees much smaller gains and losses.

“This Superior news is not good, but if there is a bright side in the timing of this announcement it’s that we are starting to see a push back into U.S. manufacturing. One of the issues in Northwest Arkansas has been a skilled manufacturing workforce. While we would rather have these folks employed, their presence here is a positive for company’s wanting to expand and locate in the region,” Deck said.

She said having two sister plants within the same region has been a bonus given so much of the auto parts and auto production has already been clustering south of the border.

Superior says jobs at the Fayetteville plant are not in jeopardy. Average local wages at Superior Industries range from $55,000 to $80,000 annually. At the lowest end of that range the economic impact is significant as there are not enough transferable job openings to absorb the 500 positions lost.

“Rogers has certainly seen better days,” said Raymond Burns, CEO of the Rogers- Lowell Chamber of Commerce. “We are working with the Arkansas Workforce Commission and plan to hold a job fair October 8 to try and help workers seek other opportunities.”

Burns said the loss to the city’s workforce is major and while the transition of jobs to Superior’s plant in Mexico will save the company money, much work must be done to ensure the local displaced workers can find other job opportunities.

RETENTION, NEW RECRUITMENT
The Northwest Arkansas Council and the local chambers of commerce have worked for two years meeting with local manufacturers and businesses to assess expansion and job retention plans. 

Grant Tennille, director of the Arkansas Economic Development Commission said the agency was aware of the company’s decision to relocate the jobs and the agency continues to work with the community and company to develop a plan to market that facility for other manufacturers. 

“Superior has been clear that this decision had nothing to do with Rogers or that workforce, it’s simply that the math no longer works. OEM (original equipment manufacturers) auto manufacturers have revamped their business models through the economic downturn. They are now requiring shorter turnaround times on their orders which used be made a full year out. Suppliers are still struggling to adjust to the new reality requirements coming from auto manufacturers,” Tennille said. “We are working with suppliers who are looking for large manufacturing facilities and a skilled workforce. The Superior plant in Rogers is the biggest facility to come open in some time and the skilled workforce is also an added plus in a market with 4 and something percent unemployment.”

WAL-MART HELP?
The AEDC priority is to get the Governor’s Dislocated Worker Task Force into Rogers for a full assessment of the skills level for every worker. Tennille said a skills profile will be completed on each worker so other manufacturers and employers with needs can be alerted. He said talks continue with Superior to try and place some workers at the Fayetteville plant, though the majority will need to find other jobs.

“I hate to see anyone lose a job, much less 500 in one city. But if someone put a gun to my head and made me close a plant in Arkansas, I dare to say I would chose one in Northwest Arkansas, given the region’s resiliency and the new opportunities we are seeing from Wal-Mart suppliers looking at the state for possible onshoring operations,” Tennille said.

Tennille also said the effort by Wal-Mart Stores to return manufacturing jobs to the U.S. could help absorb the Superior loss. Tennille recently told The City Wire that talks with potential manufacturers doing business with Wal-Mart showing interest in onshoring jobs specifically point to Northwest Arkansas. He has said there are two Northwest Arkansas announcements coming before the end of the summer that are directly linked to the Wal-Mart campaign.

Mike Harvey, chief operating officer of the Northwest Arkansas Council, said the loss of 500 jobs skilled labor jobs will no doubt negatively impact job numbers in the short term. He too, said there are several other manufacturers in the region investing and planning to add workers in the next year. 

“We hope to be able to match some of the displaced workers with the new opportunities before the end of the year. The big job fair in Rogers in early October is also timely,” Harvey said.

Superior Industries will hold its quarterly earnings call on Thursday (July 31) and hopefully provide more details about the closure and job transfer opportunities.

It was just more than a month ago that Fort Smith business and civic leaders said a concept similar to North Little Rock's Arkansas Innovation Hub was needed in the area and now the Fayetteville and Fort Smith public libraries have plans to introduce one aspect of the AIH concept.

Expansion proposals for the Fayetteville and Fort Smith Public Libraries include plans for “maker spaces,” which Fort Smith Public Library Executive Director Jennifer Goodson described as "when the library provides tools and training to allow people to make or create something from imagination to production. In this space, you create, invent and learn."

At the Fort Smith library, Goodson and the library's board of directors have proposed a plan to raise Fort Smith's millage rates by two mills in order to add $2.8 million to the library's operating budget which would allow it to invest in technologies to take maker spaces from concept to reality. It would have to be approved by Fort Smith voters in an election set for Aug. 12.

"In our particular space, we've talked about a 3-D printer, a good quality video camera and software, maybe a green screen. And we've talked about VHS conversation equipment," she said. "If we're successful (with the millage vote Aug. 12), it will include talking to the public and seeing what other things are possible. The emphasis is on technology."

At the Fayetteville library, Executive Director David Johnson said the library's dream is to purchase the old Fayetteville City Hospital and develop it as a library expansion with a large maker space included, with a total price tag between $50 million and $55 million. He said the purpose in creating maker spaces is not to necessarily be a business incubator, but to provide up to date services expected of a library in the 21st century.

"I think you see a lot of that coming around in the last decade, where there's more of a movement to that kind of activity," he said. "As libraries have shifted to more of a community space to meet and congregate, activities like maker spaces have bubbled to the surface."

Johnson said the addition of maker spaces to serve age groups from young to old and socio-economic levels from rich to poor is in keeping with the demands of the community and provides equal opportunities for learning and if an individual needs the space to improve or expand offerings for his or her business — like the occasional use of a 3-D printer — then that is what the Fayetteville library is hoping to offer with the maker spaces.

"When you look at what (groups) our library serves, it transcends all economic levels. It's the great equalizer. We tear down all barriers. We try to provide the community with all the different types of resources that they say they want or that we recognize support activities here in the community."

Goodson said while the plan has not been for the library to be a business incubator on the scale of North Little Rock's Innovation Hub, she said maker spaces at libraries like Fort Smith's can fill that need until either a private sector solution comes forward or a public-private partnership comes about to provide funding and support for such an effort.

"We've not had those formal discussions, but the library has had a long history of partnerships. Whenever we have the opportunity, we try to partner with groups to broaden our resources. We'd anticipate doing that with the maker spaces, as well," she said.

In Fayetteville, Johnson said informal discussions have taken place between the library and the Fayetteville Chamber of Commerce regarding the maker spaces proposed for the library campus in downtown Fayetteville and possibly housing a full business incubation center, but so far nothing formal has come from the talks.

"There's been some conversations about maybe the Chamber of Commerce or people doing that innovation, incubation space. There's been talk about having that in the library expansion. We're open to any ideas and suggestions with anyone who would be willing to work out a deal," he said. "They acknowledge what the library does is free access to the community. If we could work out something unique, I'd be willing to listen and see if we could make it work. I've had some conversations with the Chamber of Commerce about that opportunity, but it is just a high level discussion. There has been no conversation beyond, 'Hey, what do you think of this idea?'"

Even though Fort Smith is moving forward with its plans with the Aug. 12 vote, so far Johnson said the Fayetteville library has not determined what route it would take to fund the admittedly ambitious plan. He said the library building and adjoining parking deck were constructed through a three-quarters of a cent sales tax that was in place for the library for 18 months. It raised $18 million, plus the library raised private funds – with major support from Jim Blair – to supplement the sales tax. But he said the tax option is unavailable as the three-quarters of a cent sales tax is currently in use for long-term projects in the city.

"We will have to explore other options, possibly a millage increase or a capital campaign. There's been no decision yet," he said. "There's no clarity on how we're going to do that. But as soon as we do, we'll get it in front of the community to see if they want to help us. That conversation with the community is ahead of us."
Whatever option the library pursues in its attempt to make the $50 million plus expansion with a maker space a reality, he said the public will likely see more local libraries entering the maker space marketplace due to the services it can provide citizens.

Goodson said maker spaces popping up at libraries across the nation show that libraries could have more of an impact locally than just reaching people with the written word.

"The beauty of the library is that it can be an economic engine. It could allow entrepreneurs to get the hands-on training to get going, to get the spark they need to get started. But it can also be a space for people to exercise creativity. It can be economic and incubating, but it doesn't have to be. And that's the nice thing about the public library. It meets as many of those needs as possible."

Two prominent attorneys who have been in the news in recent weeks and months due to their legal wrangling with the city of Fort Smith have joined forces to create a new law firm.

Attorneys Matt Campbell and Joey McCutchen, along with William Buckley, have created the law firm McCutchen, Buckley, Campbell — The Law Firm.

"Our purpose is to impact the lives of our clients and citizens in our communities, and to do it one person, one moment, and one interaction at a time," McCutchen said in an e-mail to The City Wire. "We do that by protecting clients' livelihoods and legal rights against any infringement, whether from catastrophic injuries from a business's violation of safety rules or from government overreach in our communities."

McCutchen, on behalf of client Jack Swink of Fort Smith, filed a lawsuit July 1 that alleged the city of Fort Smith violated the Arkansas Freedom of Information Act by polling city directors by telephone about whether or not to remove items from a meeting agenda. He has previously been involved in litigation against the city regarding other alleged violations of the Arkansas FOIA.

Campbell, who lives in Pulaski County, is legal counsel in a whistleblower lawsuit against the Fort Smith Police Department and revealed in a post on his Blue Hog Report blog allegations that the Daily and Woods Law Firm — the city's contracted legal counsel — had charged for services not performed and overcharged for others. City Attorney Jerry Canfield has denied the allegations.

Campbell said while he and McCutchen have been involved in legal disputes with the city in recent months, the law firm's focus would be about more than just government transparency.

"I want to do more personal injury and I want to be able to focus the rest of my practice in terms of consumer protection and civil rights. A one stop shop for helping people," Campbell told The City Wire. "Joey had the same mindset. He wanted to do personal injury. And I think that would be the primary driver of the firm, but there are other (areas of practice) they want to focus on, too."

Campbell partnering with McCutchen — essentially merging his Pinnacle Law Firm with McCutchen's law firm — came about following the departure of McCutchen's former legal partner Chip Sexton. Any lawsuits being fought by the attorneys in the firm will be unaffected by the formation of the new company, which became official last week, Campbell noted.

And even though the two men partnering in practice may appear like combining oil and water due to Campbell's liberal political leanings and McCutchen's conservative leanings, McCutchen said he and Campbell have long been involved in similar causes, such as tort reform.

"I was aware of Matt's reputation in the legal community and I was impressed with the thoroughness and credibility that Matt showed in his reporting on the Blue Hog Report, as well," he said. "Following our discussions about how to best fight against the impeding 'tort-reform' efforts in Arkansas, I think we both quickly realized that working together as partners would be beneficial to our clients and the people of Arkansas generally."

Campbell added that with any political persuasion, there will always be some level of agreement.

"I've said for a while that if you go far enough left or far enough right, you meet up on the other side and find some stuff to agree on. … We're not too far apart, at least as far as open and transparent government."

Campbell said he would work in Fort Smith two days each week for the foreseeable future and spend the rest of the week at the firm's office in North Little Rock.

The local homebuilding pace appears to be stabilizing among the majority of the large cities in the two-county area. Commercial projects, including multifamily housing, were showing signs of resurgence through the first half of 2014, but June numbers tracked lower than a year ago.

Combined new permit values in June among Fayetteville, Springdale, Rogers and Bentonville totaled $53.196 million, down 24% from the $70.7 million reported in June of 2013. 

Homebuilders initiated 105 new single family homes in June, with a cumulative permit value of $24.505 million. This compared to 118 new starts valued at $26.767 million in June of 2013. The home building pace was on par with the June 2012 activity — 105 permits valued at $24.57 million. 

Fred Rausch, CEO of the Rausch Coleman Homes, said his company is on target for a record year in Northwest Arkansas. He said market demand for first-time buyers is strong and he doesn’t expect that to change given the steady growth patterns indicative of the regional economy.

“We are pleased with where the local market is going. Traffic is good at our price points, but there are always challenges to work through,” Rausch said.

He cites tight credit that is keeping some potential buyers at bay, material costs are rising and some labor is harder to come by given that more builders are active in Northwest Arkansas today. Rausch said one other sign that bears watching are the new higher-end homes under construction by contractors from outside the area as local banks are eager to lend again.

June permit values for new single family homes increased in Fayetteville and Bentonville from the year-ago period. Springdale and Rogers issued fewer permits compared to June 2013. Following are the residential permit numbers for the respective cities.

RESIDENTIAL PERMITS (JUNE)
Fayetteville
2014: $6.75 million
2013: $3.88 million
2012: $6.1 million

Rogers 
2014: $6.34 million
2013: $7.30 million
2012: $4.1 million 

Bentonville
2014: $9.192 million
2013: $10.34 million
2012: $8.94 million

Springdale
2014: $2.21million
2013: $3.02 million
2012: $3.26 million 

COMMERCIAL PROJECTS
The four cities issued permits for new commercial and multi-family projects valued at $31.092 million in June, down 28.8% from the $43.7 million reported in June of 2013. 

In Fayetteville the two new permits totaled $4.89 million, $4.4 million of that is for the new Crane Honda Dealership under construction at 1919 Foxglove Drive, near Interstate 49 between the Arkansas 112 and Porter Road exits. Dunkin Donuts is under construction at 1855 Martin Luther King Blvd. in Fayetteville. This project is valued at $446,000. A year ago, the city issued permits valued at $39 million, which included a large $25 million multifamily project.

In Rogers the city approved new commercial permits valued at $5.217 million in June, up from $3 million a year ago. A large retail shell is under construction at 5001 Pauline Whitaker Parkway. It is a retail strip center with a price tag of $1.525 million. A new Kindergrove day care facility is being built at 696 S. 28th St., with a cost of $1.3 million. The Twin Peaks restaurant and sports bar is under construction at 2400 Promenade Boulevard at a recorded cost of $1.527 million. Lastly, the new Heritage Indian Motorcycle dealership was approved at a cost of $440,000 at 1711 Hudson Road.

Bentonville reported commercial permits worth $20.985 million in June, up sharply from the $1.7 million reported a year ago. The Bentonville numbers include six temporary classrooms built for the Bentonville school district at a cost of $109,988; a $6 million multifamily project by Legacy Housing LLC.; a large warehouse at 2608 SE J. Street valued at $12.07 million and an office building at 2600 SE J. Street valued at $2.78 million.

Springdale did not issue new commercial building permits in June. 

Health Department permit record indicate several new businesses on tap for Benton County in the coming months. Permits were issued for the Shoe Department at 200 N. Progressive Ave. in Siloam Springs, JJ’s Grill at 12 Cunningham Corner in Bella Vista,  The Big Chill bar and grill at 3000 Pinnacle Hills Parkway in Rogers, and Whataburger, the Texas-based burger franchise, is under construction at 4335 S. Pleasant Crossing Blvd. in Rogers.

Health department permits generally precede city building permits by three months and provide a glimpse ahead into future commercial building activity. Following are the commercial permit numbers for the respective cities.

COMMERCIAL PERMITS (JUNE)
Fayetteville 
2014: $4.89 million
2013: $39 million 
2012: $27 million

Rogers
2014: $5.217 million
2013: $3 million
2012: $650,0000

Bentonville
2014: $20.98 million
2013: $1.7 million
2012: $7.32 million

Springdale
2014: $0
2013: $231,846
2012: $0

Fort Smith-based ArcBest (formerly Arkansas Best Corp.) appears to be on its way to two consecutive years of positive financial results, with net income for the first six months of 2014 at $12.015 million, a big improvement over the $8.517 million loss during the same period in 2013.

The transportation holding company reported early Thursday (July 31) second quarter net income of $17.208 million on revenue of $658.646 million. Excluding a one-time pension charge, the net income was $17.764 million, or 65 cents per share. The per share earnings missed the consensus estimate of 72 cents, but revenue beat the estimate of $642.6 million.

Total revenue for the first half of 2014 totaled $1.236 billion, better than the $1.097 billion during the same period of 2013. Most of the company’s revenue and income is derived from ABF Freight, one of the nation’s largest less-than-truckload carriers. Net income during 2013 was $15.8 million, much better than the $7.7 million loss in 2012 and the most the company has earned in a year since 2008.

“Our second quarter results improved significantly from both the first quarter of 2014 and the year-ago quarter, which was welcome news as we emerged from the harsh winter weather earlier this year,” ArcBest President and CEO Judy McReynolds said in the earnings statement. “As the economy picked up in the second quarter, ABF Freight experienced better pricing conditions and also saw the positive impact from the new labor agreement, while Panther reported one of the strongest quarters in its history. We are also seeing more customers buying at the enterprise level, when they require two or more ArcBest services. We are focused on taking advantage of all opportunities to better serve customers with holistic solutions across the supply chain.”

UPDATED INFO:During the Thursday morning call with analysts, McReynolds said an improved pricing environment helped boost the second quarter numbers. She said a 5.4% general rate increase in late March was applied to 35% of freight business in the second quarter, and there was a 3.2% average increase on negotiated contracts during the quarter.

ArcBest Chief Financial Officer Michael Newcity said the second quarter was “the most profitable quarter in six years.”

However, several analysts expressed concern about rising costs on the ABF side. For example, “fuel, supplies and expenses” for ABF were $93.277 million in the quarter, up 13.14% compared to the same period in 2013. The expense increase was higher than the 10.3% gain in revenue for the division.

Bill Greene, an analyst with Morgan Stanley, said the numbers “caught everyone by surprise at how little leverage their was to the very good top line.”

McReynolds said part of the problem is the hiring of new dock workers and other laborers required to handle the growth in shipments. She said 13.5% of the ABF total workforce has less than 1 year experience, compared to 4% in past years. She said productivity among new dock workers was 20% below that of experienced dock workers. An example of the productivity loss is that shipments per yard hour were down 4.4% in the quarter.

ABF has doubled “training and mentoring” and expect productivity will improve through the year and after one year experience there should be “a significant productivity jump.” Many of the new workers were hired beginning in February.

Another problem was equipment repair and maintenance costs above “historical levels,” according to McReynolds. Part of that increase results from fewer new equipment purchases in 2013 because of uncertainty related to labor contract negotiations with the Teamsters. However, $60 million in planned revenue equipment purchases, to include 444 new road tractors, should reduce maintenance costs in future quarters, McReynolds said.

DIVERSIFIED REVENUE
Although ABF Freight still accounts for a bulk of the income and revenue at ArcBest, Panther Expedited operating income was $4.358 million in the second quarter, well ahead of the $1.506 million during the second quarter of 2013. More impressive is that the operating income for the logistics subsidiary during the first half of 2014 is $7.722 million, much higher than the $642,000 in the same period of 2013 and not much less than the $10.653 million for the much larger ABF Freight division.

Panther was acquired in June 2012 for $180 million.

“The hard work we have done over the last few years to better position ABF Freight and to grow and invest in our emerging businesses is reflected in today’s results,” McReynolds said. “It is particularly gratifying to see Panther achieving such strong results after two full years as an ArcBest company.”

In addition to returning to consistent profitability, an ArcBest goal has been to diversify the revenue stream. During the second quarter, non-ABF Freight (non-asset) revenue was 27% of the total, ahead of the 24 during the 2013 quarter. And that mix has more than doubled in less than three years. Revenue from the non-asset-based operations was 17.8% of the 2012 total revenue for 2012, and just 10.6% in 2011.

SEGMENT NUMBERS Q1-Q2 2014
ABFFreight
Operating income
2014 (January-June): $10.653 million
2013 (January-June): –$17.052 million

Premium Logistics (Panther)
Operating income
2014 (January-June): $7.722 million
2013 (January-June): $642,000

Domestic/Global transportation management (ABF Logistics)
Operating income
2014 (January-June): $1.389 million
2013 (January-June): $1.023 million

Emergency/preventative maintenance (FleetNet)
Operating income
2014 (January-June): $2,101 million
2013 (January-June): $1.522 million

Household goods moving (ABF Moving)
Operating income
2014 (January-June): –$218,000
2013 (January-June):  $717,000

The company provided the following notes about key changes – many allowed by the new labor agreement with the International Brotherhood of Teamsters – and conditions within its ABF Freight division.

• An improving economic environment and business growth at ABF Freight contributed to an additional 6% of second quarter daily freight tonnage versus the same period last year.

• Tightening network capacity combined with improving pricing trends and a lower cost structure resulted in better operating margins.

• Total second quarter revenue per hundredweight increased by 4.2% over last year and increased 6.9% versus first quarter of this year.

• ABF Freight secured better freight rates and account pricing improvements amid broad LTL and truckload industry pricing strength.

• ABF Freight benefited from the previously announced network consolidation of 30 terminals that began in July 2013 and was completed in mid-March of this year.

• ABF Freight is now able to use purchased transportation – a flexibility component of the new ABF Freight labor contract – which has helped improve network operations.

• The level of savings from network changes as well as the expected incremental margins on revenue growth were not realized as ABF Freight brought on a significant number of new dock employees to handle the shipment growth. The company said the process will improve as the new employees complete training and gain experience.

Shares of ArcBest (NASDAQ: ARCB) closed Wednesday at $42.29. During the past 52 weeks the share price has ranged from a $45.68 high to a $19.40 low.

One positive quarter does not a turnaround make, but Van Buren-based USA Truck posted second quarter net income of $722,000, better than the $1.398 million loss in the same quarter of 2013 and the first quarter in the black in three years.

Per share earnings of 7 cents also beat the consensus estimate of a 2-cent per share loss. Total revenue for the quarter was $153.298 million, better than the consensus estimate of $152.32 million.

For the first half of 2014 the trucking company has lost $867,000, better than the $3.872 million loss posted during the same period of 2013. USA Truck posted a net loss of $9.11 million in 2013. While an improvement compared to the net loss of $17.671 million in 2012, it marked the fifth consecutive year of losses for the trucking company.

“We posted our first quarter of positive net income in three years,” President and CEO John Simone said in the earnings report. “While continuing the work of implementing our turnaround plan, the progress we are making is evident in virtually every area of our business. ... The Company’s improved second-quarter performance was driven by a 12.1% increase in base revenue, while operating expenses net of fuel surcharge collections increased only 7.4%, yielding a 410-basis point improvement in operating margin – a testament to the multiple revenue growth, operational and cost-efficiency initiatives we have implemented.”

Investors liked the report. The thinly-traded USA Truck shares (NASDAQ: USAK) were up more than 4.5% in early morning trading after closing Wednesday at $18.58. During the past 52 weeks the share price ranged from a $19.57 high to a $5.28 low.

The second quarter numbers would have been even better, but the company had a $2.2 million charge – 13 cents per share – to cover legal costs primarily related to the effort to defend against a hostile takeover attempt by Knight Transportation. Knight and USA Truck agreed to a “standstill” arrangement in early February, which effectively ended the takeover attempt.

Another boost to income and revenue is the continued growth of Strategic Capacity Solutions (SCS), USA Truck’s brokerage and logistics division. Revenue in the division for the quarter was $41.762 million, up over the $30.028 million in the 2013 quarter. Operating income in the division was $5.991 million in the quarter, more than double the $2.163 million in the 2013 quarter.

For the first half of 2014, SCS operating income was $11.069 million, up 233.9% compared to the $3.315 million in the same period of 2013.

“This performance was made possible by crisp execution within this highly efficient service against the backdrop of a market characterized by strengthening demand and tight capacity,” Simone said in the statement. “Our SCS segment accounted for over one-third of our consolidated base revenue during the quarter, substantially strengthening and diversifying our integrated business model.”

Despite the better numbers, the company continues to struggle in a few key areas. The operating ratio for the first half of the year was 104.8%, up from 104.4% in the same period of 2013. The ratio indicates that company lost 4.8 cents for each dollar in revenue. Also, the empty mile factor during the first half of 2014 rose to 12.3% from 11.4% in the same period of 2013. The average number of seated tractors fell from 2,115 in the first half of 2013 to 2,040 in the 2014 period. The number of parked trucks rose from 4.9% in the first half of 2013 to 8% in the first half of 2014.

However, tighter capacity and increased demand across the U.S. freight industry allowed the company to command higher rates. The base revenue per loaded mile was $1.72 in the first half of 2014, better than $1.635 million in the same period of 2013.

“Although fixed costs were pressured during the quarter by elevated employee medical benefit plan costs, we achieved improvements in critical areas such as insurance and claims, fuel and maintenance costs. We also took steps we believe will increase our seated truck count, which remains one of management’s top priorities as the availability of qualified drivers continues to be problematic across the truckload industry,” Simone explained in the report.

A study released by the National Association of Manufacturers (NAM) on Thursday said the Environmental Protection Agency’s (EPA) new ozone standards could cause Arkansas to lose more than 10,000 jobs, pay more than $240 million in environmental compliance costs, and shut down most of the state’s coal-fired electric generation.

“Manufacturing in the United States is making a comeback, and we’re reducing emissions at the same time, but tightening the current ozone standard to near unachievable levels would serve as a self-inflicted wound to the U.S. economy at the worst possible time,” NAM President and CEO Jay Timmons said. “This rule would undermine our work to expand manufacturing in the United States, making it almost impossible to increase operations, create new jobs or keep pace internationally.”

Altogether, according to the study conducted by NERA Economics Consulting, NAM said the EPA’s controversial plan to cut carbon dioxide emissions could reduce the nation’s GDP by $270 billion per year and carry a compliance price tag of $2.2 trillion from 2017 to 2040, increasing energy costs and placing millions of jobs at risk.

At this price, the NAM study estimates that it would be the most expensive regulation the U.S. government has ever issued, Timmons said. “Ozone standards set at this level could break us,” he said.

At the direction of President Obama, the EPA released its Clean Power Plan on June 2, cutting so-called “dirty air” emissions 30% by 2030 from 2005 levels. At the time, critics said it would essentially end Arkansas’ and the nation’s reliance on coal-fired electricity generation.
www.thecitywire.com/node/33325

Under the new guidelines, Arkansas regulators and stakeholders will also have an option to develop and submit a workable plan beyond the earlier announced June 2016 deadline. On June 25, nearly 20 stakeholder groups and state regulators from the Arkansas Department of Environmental Quality and the Arkansas Public Service Commission met to discuss how to implement the new greenhouse gas standards in Arkansas.

DOING THE IMPOSSIBLE
At that meeting, Chuck Barlow, vice president of environmental policy and strategy for New Orleans-based Entergy Corp., called the new EPA rules “another level of hell.”

NAM officials said their 144-page study was “the most rigorous examination” of EPA ozone regulations to date. The nation’s largest manufacturing association called on the Obama Administration to delay implementation of the more stringent ozone standards, or keep today’s carbon emission rules at the current level of 75 parts per billion.

“We are rapidly approaching a point where we are requiring manufacturers to do the impossible. The new EPA (rules) should be entirely off the table,” said NAM Vice President of Energy and Resources Policy Ross Eisenberg. “We hope the EPA takes us up on this offer. They need to take the time to get this right.”

Here are some additional highlights of the study finding that ozone standard from 75 parts per billion (ppb) to 60 ppb could:
• Reduce U.S. GDP by $270 billion per year and $3.4 trillion from 2017 to 2040;

• Result in 2.9 million fewer job equivalents per year on average through 2040;

• Cost the average U.S. household $1,570 per year in the form of lost consumption; and

• Increase natural gas and electricity costs for manufacturers and households across the country.

CONSUMER PRICE HIKES
In Arkansas, NAM officials said that new ozone regulations could cost Arkansas hundreds of millions of dollars to reduce emissions to federally required levels. For example, the new EPA rules would push up residential electricity prices by 15% and natural gas prices by 32%, the report said.

NAM officials said the EPA has identified only 38% of the controls needed to meet the standard. The remaining 62% of reductions would have to be met with unknown controls that the EPA has not yet identified but which would likely have to include early shutdowns of existing facilities, equipment and vehicles.

Eisenberg said NAM has sent the study to EPA officials and asked for a meeting to discuss the details and methodization of the new report. The new NAM report is another high-profile study that critics of the new EPA standards can use to put political pressure on the EPA to delay implementing the new stricter greenhouse gas rules.

The U.S. Chamber of Commerce has issued a 71-page report saying the EPA’s plans to regulate carbon dioxide emissions from power plants will cost America’s economy more than $50 billion a year between now and 2030.

Randy Zook, President and CEO of the Arkansas State Chamber of Commerce/Associated Industries of Arkansas, said he hopes his membership forcefully voices its opposition to the EPA rules.

“Today’s study should serve as a wake-up call to job creators in Arkansas and across the nation,” Zook said. “The report clearly demonstrates the exorbitant costs that come with a more rigid ozone standard, and the severe impact that such a revision would have on our state economic outlook. These costs will make it almost impossible for Arkansas manufacturers and businesses of all stripes to create new jobs, or even keep pace with international competitors.”

ARKANSAS RULE DEVELOPMENT
In Arkansas, The PSC and ADEQ have been tasked by Gov. Mike Beebe to oversee the process of developing new rules to meet the EPA mandate in Arkansas. ADEQ is in the process of preparing the necessary paperwork to seek the assistance of a meeting facilitator for future stakeholder meetings. Also, the public comment period on the EPA docket began June 18 and must be received by federal regulators on or before Oct. 16, 2014.

Meanwhile, EPA Administrator Gina McCarthy has been criss-crossing the nation to get public input on the prosed Clean Power Plan. This week, the EPA held four public hearings in Washington D.C., Atlanta, Denver and Pittsburgh, to give interested parties an opportunity to comment on the proposed rule.

EPA predicts that when the proposed plan is fully implemented in 2030, carbon emissions from these sources will be 30% below 2005 levels. Obama administration officials say the proposal will protect public health, move the United States toward a cleaner environment and fight climate change while supplying Americans with reliable and affordable power.

To date, the EPA has received around 300,000 comments on the proposal, and anticipates hearing oral comments from about 1,600 people.

Retailers from Wal-Mart to local boutiques expect a busy weekend as Arkansas shoppers take advantage of the state-sponsored tax holidays beginning Aug. 2 and running through Aug. 3. 

Shoppers may purchase clothing up to $100 per item, unlimited school and art supplies and up to $50 in clothing accessories and pay no state or local sales tax on those purchases, a savings of nearly 10% in Northwest Arkansas and the Fort Smith metropolitan area.

Electronics purchases are not part of the tax free program but Wal-Mart announced Thursday (July 31) that it will unveil price roll-backs in-store and online for top electronics and other college dorm room essentials. Wal-Mart said its rollbacks and special buys are timed to the start of sales tax holidays in select states and at a time that data shows a spike in customers shopping online for back-to-school items. 

“The combination of families stocking up on school supplies, college students shopping for electronics and select state sales tax holidays makes this one of the busiest times of the year for us,” said Steve Bratspies, executive vice president, general merchandise for Walmart U.S. “We know that customers are searching for ways to save as they prepare for the fall. That’s why we’re making it easier for them to get back to class for less with great deals available on Walmart.com and in our stores.”

Sales tax holidays are a big part of the back-to-school season for many families in Arkansas – for some, it can mean enough savings to purchase extra an shirt or a backpack, Wal-Mart noted.

“We’re prepared for this busy time with the items that matter most this season like supplies and back-to-school clothing,” the retailer said in a statement.

Wal-Mart said the products in biggest demand and the most well-stocked include: 
• 24-count Crayola Crayons;
• Elmer’s School Glue; 
• binders; and
• notebooks and notebook paper. 

The retailer said big trends for 2014 include items featuring characters from Disney’s Frozen and Captain America: The Winter Soldier. 

It’s not the just large retailers who can benefit from tax-free weekends, according to the National Federation of Independent Businesses. Retailers of all sizes should leverage these one-day or weekend shopping events with sales, coupons and more, according to Andy Ellen a spokesman for the organization.

"When the tax holiday is offered, it drives a lot of foot traffic, both for the items that are tax-free that weekend as well as taxable items," Ellen said. 

Sixteen states are offing tax holidays in 2014, according to Diane L. Yetter, president of Chicago tax-consultancy firm YETTER. 

Not everyone is excited about the sales tax holiday as some groups cite a loss of state revenue.

“The primary reason Arkansas began offering the tax-free weekend was because consumers living near border states were believed to be shopping in those states that offered the tax free savings. Now retailers in state don’t lose out to neighboring Oklahoma, Texas and Missouri,” said Kathy Deck, director for the Center for Economic Research at the University of Arkansas.

She said the state-sponsored holiday does promote walk-in traffic for retailers and it helps to coordinate when consumers shop for the covered back-to-school items given they have the means to purchase them during the stated weekend.

Deck said it is not clear how much tax revenue the state looses annually from the one weekend of tax free incentive. But when she factors in that Arkansas consumers are shopping more in-state, Deck said that is money that at one time was flowing elsewhere.

“Two things are likely, consumers might spend a little more than they normally would because they are getting more for their money without paying taxes. There is also the fact that they are shopping during a promotional period which could mean they buy items that had not planned,” Deck said.

Economist Liz Malm of the Tax Foundation, notes that sales tax holidays do not promote economic growth or significantly increase consumer purchases. She sad the evidence shows that they simply shift the timing of purchases. Some retailers raise prices during the holiday, reducing consumer savings.

The Arkansas Department of Finance shows the complete rules for the state-sponsored tax-free purchases on its website.

Bank of the Ozarks and Intervest Bancshares Corp. plan to merge in a deal worth $228.5 million.

Intervest, the parent company of Intervest National Bank, operates seven offices — six in West Central Florida and one in New York City. At June 30, 2014, Intervest had approximately $1.6 billion of total assets, $1.2 billion of loans and $1.3 billion of deposits.

“We are pleased to announce the acquisition of Intervest, our twelfth acquisition in recent years and our largest to date,” said George Gleason, chairman and CEO of Bank of the Ozarks. “Intervest’s six offices and quarter century heritage in the Pinellas County, Florida market are a great complement to our four offices in nearby Manatee County. Intervest’s New York and Florida lending teams have a long track record of serving commercial real estate borrowers and product types not currently offered by Bank of the Ozarks. We expect the Intervest lending team to operate as a separate Stabilized Properties Group within Bank of the Ozarks, providing us yet another growth engine for earning assets.”

The all-stock transaction is expected to close in the fourth quarter of 2014 or the first quarter of 2015.

“I am proud of the organization our team has built over the last 21 years since my father and I started Intervest. We believe this transaction offers additional benefits to our customers and the communities we serve, value for our shareholders and opportunities for our employees. We are pleased to partner with Bank of the Ozarks, one of the best and most respected banks in the United States,” said Lowell Dansker, chairman and CEO of Intervest.

The board of directors for Tyson Foods announced Thursday (July 31) plans to pay a cash dividend of 7.5 cents per share to its Class A investors and 6.75 cents per share to Class B shareholders — the estate of Don Tyson and other family members.

The cash dividend is payable on Dec. 15 to shareholders of record as of Dec. 1. Shares of Tyson Foods closed Thursday at $37.21, down 2.59% amid a broad market sell off with the Nasdaq Index losing 2% on the day.

Wednesday (July 30) Tyson announced the pricing of its concurrent public equity offerings at $37.80 per share on 23.8 million Class A shares and 30 million of its 4.75% tangible equity units with a stated face value of $50 per unit. Each offering is expected to close on Aug. 5, subject to customary closing conditions.

Tyson expects the net proceeds from the Class A common stock offering to be approximately $873 million. Proceeds could reach $1.004 billion if the underwriters for the Class A common stock offering exercise their over-allotment option in full. The net proceed from the tangible equity units are expected to total $1.454 billion. These estimates are net underwriting discounts, commissions and estimated expenses, the company notes.


Tyson said it will use the proceeds with additional debt financing and cash on hand to finance the $8.55 billion acquisition of Hillshire Brands and pay any related fee and expenses to the merger.


If for any reason the Hillshire Brands deal is not consummated, then the company said it intends to use the net proceeds from these offerings for general corporate purposes.

Superior Industries disappointed Wall Street Thursday (July 31) as it missed earnings predictions for the second quarter and indicated a softer back half of 2014. The Van Nuys, Calif.,-based wheel maker posted $5.039 million in net income, down 20% from the prior year profits of $6.324 million. 

On a per-share basis Superior earned 18 cents, missing Wall Street’s 23-cent consensus which was also the reported earnings per share in the second quarter of last year. 

Revenue for the second quarter of 2014 was unchanged when compared with the second quarter of 2013, totaling $199 million for both periods. Superior saw a 1% increase in the number of shipments in the quarter, and production totaled 3 million wheels.

Gross profit decreased to $15.7 million versus $16.2 million for the same period a year ago. The gross profit decline reflects a modestly higher increase in factory costs when compared to the small increase in unit sales volume.

“Results for the quarter helped to clarify many of the challenges Superior faces,” said new CEO Don Stebbins, who joined Superior in May. “Despite a small increase over last year, we continue to experience relative unit volume softness. Our results highlight the need to reduce factory costs to improve margins and also to bolster our longer-term competitive position. Accordingly, we announced yesterday the closing of our Rogers, Arkansas facility by the end of this year, as we implement steps toward addressing our more immediate challenges.”

Stebbins and Superior management said the closure will take place before the end of the year and is timed accordingly with Ford’s production shift in its popular F-Series trucks, the largest contract at Superior.

He said Ford will be shuttering production in the back half of the year as the model is revamped for 2015. As Ford truck wheels represent the largest volume for Superior, Stebbins warned that softer company sales are expected for the back half of this year.

SHIFTING PRODUCTION
“Our decision to close the plant in Rogers was based on the fact that older location —Circa 1989 — is highly unlikely to reach necessary competitiveness even with additional investment,” Stebbins said during the companies earnings call Thursday afternoon.

He said a production transition is already under way to the company’s other facilities. 

“In the meantime, we expect to run the Rogers plant hard to build up some added supplies before the we turn off the lights sometime later this year. The new plant in Mexico will be finished by the end of the year and some of the newest equipment in Rogers will be moved to the new facility. We will have a light startup in early 2015 and expect that plant to run an average 60% capacity during the full year. All of the other Superior plants will be running at 100% during that time to keep pace with demand,” Stebbins said during the call.

He reiterated that the closure of the Rogers plant is expected to generate about $15 million in year-over-year labor cost savings, resulting for the workforce reduction of 500 workers.

Superior expects to incur severance costs of approximately $2 to $2.5 million in the back half of this year. Asset related charges in connection with the closing have yet to be determined. As of June 29 the net book value of fixed assets at the Rogers facility was approximately $21.9 million, the company said.

The Rogers plant has a total capacity to produce about 1.75 million wheels a year, the newer plants in Mexico can turn out 2.25 million, with less labor costs. 

In the recent quarter, Superior noted that a $2.7 million loss related to operational cost performance, most of that was attributed to the Rogers location from high scrap rates and low production levels. 

Superior noted that Fayetteville efficiencies improved on lower scrap rates, benefits of 
upgraded equipment plus more manageable volumes and mix. The company’s  Mexican production is running smoothly overall, but demand volatility has pressured cost performance, the company said.

Alloy costs — a byproduct of aluminum — rose in the quarter to the tune of $1.7 million which can not be passed along to customers, the company said.

AUTO PRODUCTION
Stebbins said the overall auto production across North America is robust up 4% in the second quarter, the second strongest for the industry since 2002. During the quarter Superior shipments increased 1%, behind capacity restraints which left the company unable to bid on new customer contracts.

Ford is Superior’s largest customer and this automaker saw a 2.8% dip in production levels compared to the year-ago quarter. The decline was in Ford passenger cars down 48,000 units, while light trucks rose by 28,000 units. Superior said the majority of its business with Ford is for the light trucks which includes SUVs. Superior’s shipments to Ford rose 4.6% from the year-ago period.

General Motors produced 6.3% more vehicles in the quarter, light trucks rose by 50,000 units, while passenger car production was flat. Superior’s shipments to GM increased 4% from a year ago.

Chrysler reported an 11.2% gain in auto production in the quarter, led by 112,000 more Dodge Trucks and Jeep SUVs. Despite the added production, Superior shipments to Chrysler were down 13.5% from the prior-year period. The loss in production on the Dodge Challenger, Dodge Journey and Caravan were offset by more units sold for Town & Country and Durango models.

Van Buren's eligibility for the Rural Development loans appeared safe following passage of a new federal Farm Bill earlier this year, but the community was dealt a blow Thursday (July 31) after it learned the city was no longer considered a rural community eligible for the loans.

According to Karen Phillips, housing and development director at the Crawford-Sebastian Community Development Council, the local administrators of the USDA Rural Development Loan program began looking at eligibility requirements after passage of the Farm Bill and noted that Van Buren was no longer eligible in part based upon its proximity to Fort Smith, meaning the community will officially lose eligibility status on Oct. 1.

Vickie Davis, an agent with Sagely & Edwards Realtors in Fort Smith, told The City Wire that eligibility requirements state that a community with no more than 35,000 residents must not be considered part contiguous part of a metropolitan statistical area. If the Arkansas River did not divide the two cities, Van Buren would be a contiguous neighbor of Fort Smith and is included in the MSA.

A meeting held at the USDA's office on Brooken Hill in Fort Smith today, featuring USDA State Director Lawrence McCullough, confirmed the loss of the loans for the community of 23,000.

"I guess everyone was confused about what the purpose (of the meeting) was," Philips said. "It was just to discuss Van Buren's rural eligibility, so that gave us at least a glimmer of hope thinking that they were wanting to hear comments from us, facts and all of the details about Van Buren and why it should be eligible. In the end, the said it was a done deal and Van Buren would no longer be eligible."

The Rural Development Loan, Philips said, allows low income residents to purchase a home with no money down and lower mortgage insurance premiums than traditional residential financing options.

"Their income limits went into the $70,000 range before the guaranteed loan part (would kick in), which meant you could get less mortgage insurance and no down payment requirements. It was a good option to get affordable payments and purchase without a large amount of money saved up first. It was a good option for everyone, not just low income families."

Executive Director Jackie Krutsch of the Van Buren Chamber of Commerce said the real hurt will likely not necessarily be middle class families, but those who would not be able to realize the dream of homeownership without the Rural Development Loan. She cited per capita income figures to show that Crawford County falls below other counties and the state in salary. In 2011, figures she cited from the U.S. Bureau of Economic Analysis listed Crawford County has having a per capita average income of $27,830. Statewide, the figure stood at $34,032 while just across the river Sebastian County's per capita average annual income was $38,513.

"You can see the difference between Sebastian and Crawford Counties is pretty significant," she said.

While the change in status for Van Buren could hurt homebuyers, Krutsch noted the impact it would have on mortgage originators, as well.

"Our home mortgage originators are very concerned about how this could impact their business and individual clients wanting to purchase a home," she said.

Developers are also likely to be impacted, Krutsch said, noting that neighborhoods throughout the community her chamber serves have focused on serving customers depending on Rural Development loans.

"Even if they (purchasers) don't have the down payment, a family of four could get into a house in the price range of $130,000 to $140,000. In Van Buren, there have been a lot of housing developments in the last 15 years in the price range for Rural Development guidelines. In the right price range, essentially. When you limit that funding mechanism, then you've taken those people out of the market."

Davis said the most likely scenario as far as impact is concerned is more buyers will buy homes outside of the Van Buren city limits in order to qualify, likely spurring growth in other communities.

"I think it's just going to shift people from Van Buren to outlying communities elsewhere in Crawford County. It's just going to put a lot of people out of buying a home in Van Buren because a down payment can get expensive. So I think it will be quite a bit of a hit (to the local economy)," Davis said.

For buyers in Van Buren looking to get in before the Oct. 1 change in eligibility, Philips said it was not too late, but potential buyers had to act fast with their mortgage lenders.

"The requirement to have an application to USDA is by Sept. 30. I definitely would not wait that long, though. They need to act as soon as possible to turn in an application and then talk to their local lender specifically about contract deadlines," she said, adding that other programs within USDA, such as the "Guaranteed Loan," may have other requirements that should be verified with a lender.

The port of Van Buren is expanding with the addition of a new 15,000-square-foot bulk storage building to be built by Five Rivers Distribution, according to Five Rivers Distribution President Marty Shell.

Shell, the operator of the ports in Van Buren and Fort Smith, made the announcement during Thursday's (July 31) Fort Smith Port Authority meeting.

"There's no AEDC (Arkansas Economic Development Commission) money, there's no grants, there's nothing out there. It just comes straight out of our pocket. But we see a heavy, heavy need for bulk storage in this area," he said.

The news that Five Rivers was constructing its own bulk storage building came at the same meeting where the port authority was to discuss plans for a new bulk storage building at the Port of Fort Smith. The new building is expected to cost between $700,000 and $900,000, Fort Smith Deputy City Administrator Jeff Dingman said Thursday, adding that the port authority had applied for a $200,000 grant from the Arkansas Waterways Commission in order to defray some costs of a new building.

Competing for the grant from the AWC are the ports at Little Rock, Pine Bluff, Osceola, and West Memphis, with Dingman noting that the AWC was unlikely to give a single port the entire grant but would likely split it between the five ports that had made the applications.

The largest part of the funding for the bulk storage facility is to come from a loan originating with the Arkansas Economic Development Commission, Dingman said, adding that if the port comes up short on the $200,000 grant from the AWC it could instead scrap plans for the new building in favor of using the money on other projects.

"There are still a lot of parts of that that are still as unknown today as the last time we talked about it, really. I think if we end up with whatever we end up and it's not enough to do our building project, then like we talked last time, we can request authorization to use it for some other type of improvement at the facility. But whatever we get, we can use. We just don't know if we can use it for … if it will be enough to make our building project work or not."

Shell said Fort Smith was the only port to request for a new building, with other ports requesting to use the so far unknown amount of grant money for river dredging and maintenance issues.

Even though the port authority is still moving forward with its plans for a bulk storage building, Shell said building an additional storage facility at the Van Buren port was a necessity for customers who need space now and cannot wait until the port authority finds out sometime in November whether it received the $200,000 grant necessary to begin construction.

"We still support, will still continue on, would still like to see the Port of Fort Smith develop a bulk storage warehouse over there, as well. But we have customers just telling us that they need something quickly and we figured we could do it privately faster than we could publicly, so we've decided to build a 15,000 square foot (facility),” Shell said.

Dirt work on the site is almost complete, Shell said, adding that Five Rivers would soon accept construction bids. He would not disclose the cost to construct the facility and added that AEDC and other funding options were not being used since the facility would not add additional jobs to the economy in the near term.

A public meeting will be held on the grant application made by the Fort Smith Port Authority, Dingman said, with Shell adding that Sen. Jake Files, R-Fort Smith, would attend to advocate for Fort Smith to receive its share of the funding. Legislation Files sponsored in the Arkansas General Assembly made the grant money available through the AWC.

The positive news keeps coming for Springdale, the city in the middle of the growing Northwest Arkansas region. Wal-Mart announced Friday (Aug. 1) plans to build a new Sam’s Club located near Arvest Ball Park at 58th Street facing U.S. 412. 

"We are delighted to return to Springdale. Aside from the jobs, community giving that comes along with a new club opening is big. At Sam's we have a saying ‘Happy to help,’ and we are truly glad to bring Springdale a beautiful new Sam's Club," said Kurt Hess, regional marketing manager for Sam's Club.

This announcement comes two weeks before a new supercenter opens at Elm Springs Road and Interstate 49 and just a month after a new Neighborhood Market was announced by the retail giant near the new Don Tyson interchange and I-49. 

“This is big for several reasons,” said Mayor Doug Sprouse. “There is the added tax revenue as a Sam’s Club would be a big gain for any city, but equally important is the new development near Arvest Ballpark for which we have waited patiently for some time.”

He said the timing of the Sam’s Club opening in 2016 will also coincide with the city’s 56th Street widening project to four lanes with a median from the Don Tyson Expressway beyond U.S. 412.

Sprouse said it’s hard to gauge the financial impact, but for Springdale to have one time had the only Sam’s Club in the region and lose it, this announcement is especially sweet. Sam’s Club, unable to secure a liquor license in Springdale in 2006, pulled out of the city and built a new club along I-49 – then I-540 – near the Arkansas 112 junction in northwest Fayetteville. A second club was completed in Bentonville in 2008 leaping over Springdale.

Spouse said the landscape has changed and the local population has grown since Sam’s left Springdale. Officials with the Springdale Chamber of Commerce also praised the news.

"There are great days ahead for Springdale. This has turned out to be a summer of good news for the city from downtown development, retail expansion and added jobs," said Bill Rogers, communications director for the Springdale Chamber of Commerce.

The typical Sam’s Club measures approximately 136,000 square feet, and includes a fresh bakery, tire and battery center, a café and a fuel station. The Springdale Sam’s Club store is expected to employ about 175 workers, a combination of part-time, full-time hourly and salary management.

Bentonville-based Sam’s Club will need no introduction in Springdale but local consumers might not realize that the if warehouse club stood on its own outside the umbrella of parent company Wal-Mart it would be the eighth largest retailer in the U.S. with $56 billion in annual revenue. That’s more sales than the Gap, J.C. Penney and Kohl’s rang up combined last year.

The retailer celebrated its 30th birthday in April 2013 and employs more than 110,000 workers in its 640 clubs. The clubs average more than $80 million in sales annually with a membership of some 47 million and growing.

Sam’s Club restructured its in-store management teams earlier this year eliminating 2,300 jobs, a move the retailer said was necessary to streamline operating costs in a challenging economic environment.

Sam’s plans to open 20 new clubs this year, including remodeled and expanded stores working to fill in markets where the retailer already has strong brand recognition. Last year Sam’s opened 12 clubs.

There is a strong link between economic opportunity and education, and even though Northwest Arkansas has several top-rated schools in the state and some of the nation’s largest corporations there is still much work to be done, according to Dr. Evelyn Jorgenson, president of NorthWest Arkansas Community College.

Jorgenson and Michael Poore, superintendent of Bentonville Schools, were the featured speakers at Friday’s (Aug. 1) Business Matters breakfast, a monthly business forum of the Bentonville-Bella Vista Chamber of Commerce.

Just 54.3% of Arkansas high school graduates head to college or trade schools, and while Jorgensen said that rate is slowly improving it’s still 14% below the national average.

“We have plenty of work to do especially when you look at the gaps between open job positions in this region compared to the number of students graduating in certain fields,” she said.

In a workforce report compiled by the Northwest Arkansas Council earlier this year, surveys of local employers indicated there were 1,000 open positions in information technology (IT) with companies located in the two-county area. Roughly 120 local students graduated in that field last year, Jorgenson shared. In the culinary arts the report found 167 open positions, against 19 graduates last year. Jobs in the skilled trades number about 1,000 openings among local manufacturers, with just 87 students graduating with those credentials last year.

“In many cases students can get a one-year certificate and go right to work. They can go on and finish an associate’s or bachelor’s degree if they want while they are gainfully employed,” Jorgenson said. 

She and Poore agreed that students have a plethora of options, but it’s up to the community to help get that message across. NWACC works in tandem with several high schools in the region on concurrent enrollment programs that allow a high school student to take college level courses at the same they are in high school.

“Our valedictorian this past year was a young lady (Amanda Dias-Jayasinghe) that graduated with two associate’s degrees from NWACC concurrently as she finished high school in Bentonville. She tutored adult education students at NWACC as well. The amazing part of this story is that she came to Bentonville as a first grader from Sri Lanka and didn’t speak English and she’s headed to Harvard this fall,” Poore said.

He said the entire community helped to raise this little girl who was following her dreams to Harvard.

Jorgenson said “community” is the junior college’s middle name and it’s the community that NWACC listens to and seeks to serve, which includes the full gamut of education options from GED completion to professional education credits, in addition to transferrable course work and 23 certificate programs.

ON THE MOVE
The community college plans to move its culinary arts program from Center for NonProfits in Rogers to downtown Bentonville’s newly created market district. Jorgenson said the culinary arts and hospitality program has outgrown its space at the Center for NonProfits and looks forward to anchoring a new culinary arts venue to be located in a former Tyson Foods plant now under renovation.

She said the board recently authorized administrators to negotiate for space in the former Tyson Foods plant at 802. S.E. Eighth St. near downtown Bentonville. The move to the larger venue will allow the college to increase enrollment from 185 to 260 students. The Tyson plant was tapped for redevelopment late last year providing a large venue that features culinary arts, fresh food vendors and overflow from the farmer’s market.

NWACC also plans to move its adult education from the Center for NonProfits in Rogers to the college’s main campus in Bentonville. Jorgenson said the move will take place next year and space has been earmarked in the Shewmaker Center for Workforce Technologies.

“It’s important for these students to feel like they are part of the college and getting them on the main campus could be helpful to those students considering college in the future,” she said.

BENTONVILLE GROWTH
Poore said the much anticipated Bentonville West High School will open in 2016 with between 1,400 and 1,500 students in grades nine and 10 to start. With the district adding about 500 students a year, he expects the school population will rise to 2,500 within a few years.

The district plans to release the new boundary plan in October, but said in the first few years students may be given a choice to attend to the new school.

By 2017 he said the district will need another elementary school, and there are two areas of concern, heavy growth in the southwest side of the district and very long bus rides for small children living in Northwest Bella Vista.

“We have several small children that must catch the bus between 6 a.m. and 6:15 a.m. each morning in Bella Vista. This is not a good situation that has to be considered,” Poore said. 

He said the district already has the funds to construct the elementary school, so a tax hike is not needed.

Bentonville High School has an enrollment of 4,300, making it the largest in the state. District wide there are 15,000 students. He said there is a reason the school district is growing and it’s linked to top test scores, a No. 1 ranking in the country for athletic accomplishments and a full array of performing arts accomplishments.

“Our good schools are essential for local companies looking to recruit and retain top talent. A strong educational system is a cornerstone that helps supports longterm economic growth,” Poore said.

The chief scientist for the U.S. Government Accountability Office (GAO) Dr. Timothy Persons met with NanoMech in Springdale on Friday (Aug. 1) and also toured the company’s Fayetteville laboratory on the University of Arkansas campus.


Persons, at the request of the U.S. House of Representatives Committee on Science, Space, and Technology, led a forum on nanomanufacturing examining the scope and future of manufacturing, investments, industry competitiveness and safety issues related to the nanomanufacturing sector.


“The important innovation NanoMech is accomplishing in nano-engineered and manufactured coatings and lubricants is truly breakthrough and exemplifies American values for pushing technology progress for the benefit of mankind,” said Dr. Persons. “NanoMech is a shining example of the U.S. ecosystem fostering public-private partnerships, University tech transfer and commercialization, and the determination to succeed on an increasingly competitive global stage.”

Deborah Wince-Smith, CEO of the Council on Competitiveness and also a member of NanoMech’s Board of Directors, applauded NanoMech for their innovative work.

“In a world of turbulence, transition and transformation, nothing matters more to the competitiveness of companies and countries than innovation and manufacturing prowess,” Wince-Smith noted in the release.

NanoMech CEO Jim Phillips and founder A.J. Malshe noted that the company was honored to host Persons given his stellar reputation in the field of science and his dedication to increasing American competitiveness through public-private partnerships.

Dr. Jami Forrester, a professor of history at NorthWest Arkansas Community College, recently received the national 2014 History Award for Service. The honor, awarded by the History Channel, was presented as part of the National History Day events held in June at the University of Maryland in College Park.

Forrester was honored for her work as a history educator and as Region 10 National History Day Coordinator for History Day Arkansas.

Since assuming the role of regional coordinator three years ago, Forrester has recruited 14 schools in three counties and secured more than $35,000 to fund Region 10 History Day as well as provide scholarships, cash and other prizes for regional winners. A total of 19 schools and 354 students participated in the 2014 Region 10 History Day competition on March 15 at NorthWest Arkansas Community College.

Forrester was nominated for the state and subsequent national honor by faculty and administrators at Central Junior High School and Lakeside Junior High School in Springdale, Prairie Grove Schools and Fayetteville High School. Dr. Patsy Ramsey of the University of Central Arkansas and State History Day Coordinator also nominated her for the recognition.

Luke Adams, who teaches world history at Fayetteville High School, wrote, “Dr. Forrester does everything that she can do to help my students, and my participation wouldn’t be possible without her selfless contribution of time, energy, and concern. … Her professionalism is unmatched, and she never fails to meet every need of the contestants fairly and quickly.”

A letter signed by nine administrators and history faculty members at Central Junior High noted that Forrester was herself a participant in National History Day competition as a high school student, and she served as a National History Day judge for five years prior to assuming the role of Region 10 coordinator. She worked to increase the number of schools participating in the regional event and also started a new category of competition for fourth- and fifth-graders in 2011.

Students in those grades construct an informational poster on a topic of their choice as it relates to the National History Day theme, and “Dr. Forrester’s hope is that the early introduction to History Day will garner enthusiasm for the program that will continue as they move through school,” the letter writers noted.

Forrester teaches Arkansas and U.S. history and world civilization courses at NWACC. She and her husband, Greg, live in Springdale and have two children, Parker and Wyatt.

She earned a doctorate in history from the University of Arkansas in 2011. Forrester also holds a master’s and bachelor’s degree from Arkansas State University.

Farming is still big business in Arkansas despite being overshadowed by headlines from corporate giants Wal-Mart, Tyson Foods and some of the nation’s largest trucking and logistics companies in the country.

Agriculture accounted for $17 billion of valued added to the Arkansas economy in 2011. That’s 17 cents of every $1 linked to the sum of employee compensation, income and indirect business taxes, according to an economic report from the University of Arkansas in 2013.

There are more than 259,200 jobs statewide supported by agriculture, that’s one in six jobs in Arkansas, creating almost $10 billion in labor income comprising 15% of the state’s total. The aggregate of the agriculture sector’s share of the state economy in Arkansas is 2.3 times greater than for the U.S. as whole.

Some Arkansas banks have taken notice of more demand from the state’s agriculture sector. Arvest Bank recently announced is it ranked No. 26 in the American Bankers Association Top 100 Farm Lenders in the U.S. for the first quarter of 2014. Northwest Arkansas-based Arvest Bank held about $503.68 million in total outstanding agriculture loans to end the first quarter of 2014, according to Steve Griffin, executive loan manager for the Fort Smith region of Arvest Bank.

The bank notes that it’s also expanding the agriculture loan products through the Federal Agriculture Mortgage Corporation, commonly known as Farmer Mac. These products provide several  tools that help farmers/ranchers mitigate risks that have plagued the industry for the past few decades. 

Arvest said the low interest loans help farmers free up funds than can be used to counteract business risks such as drought expenses, falling crop prices and other weather-related disasters.

“We’re currently in a situation similar to the farming boom of the 1970’s – which was followed by the farming crisis of the 1980’s. The best way a farmer/rancher can reduce their financial risk is to take advantage of the current low interest rates,” Griffin said.

While the average U.S. farmer or rancher is in good financial shape, many in the industry see potential pitfalls that could cause problems similar to what the industry experienced in the 1980s. Land prices are increasing while grain and cattle prices are becoming volatile. Prices often depend on global factors including the Chinese economy, trade agreements between Japan and Australia, exchange rates, weather, inflation and domestic demand. 

A recent report from Wells Fargo economist notes that the U.S. farm sector made a solid comeback in 2013. Overcoming three consecutive years of slow growth, the industry’s output surged 16.4%, while overall real GDP increased just 1.9%. Arkansas ranked ninth in terms agricultural share of state GDP at 3.8% in 2013, according to the Wells Fargo report.

The report also summarizes 2014 as another good year for the nation’s farm economy, noting that repeating the 2013 performance could be tough given drought in large parts of California and unpredictable weather in the Midwest and South.

Local lenders also mentioned weather as a threat to 2014 profits for some farmers.

“We have a wonderful bunch of farmers in our Brinkley bank that have been with us for many years. We had a terrible rain that dumped up to 10.5 inches about a month ago that has caused major problems with some of the crops,” said Gary Head, president of Signature Bank.

He said some farmers may see lower yields as a result of the recent rain deluge.

“Our loan demand is steady there and we are prepared to work with our farmers through a potentially rough year,” Head said.

Signature Bank has grown its farmland loans to 1.71% of total loans, up from 1.51% a year ago. That totals about $6.5 million, up from $5.8 million in 2013. Other agriculture loans held by Signature Bank total about $6.4 million, up from $5.15 million in 2013, according to bank’s filings with the Federal Deposit Insurance Corp.