Chinese manufacturer opens U.S. operations in Upper Macungie

A Chinese plastics manufacturer will bring 75 new jobs to the Greater Lehigh Valley when it opens its first manufacturing plant in America in Upper Macungie Township.

Fuling Plastics USA held a ribbon-cutting ceremony at its new location Thursday at 6690 Grant Way near Tilghman Street to mark the beginning of its manufacturing operations in the Valley – and nation.

Fuling Plastics China’s decision to begin making plastic products in the U.S. has resulted in the newly incorporated Fuling Plastics USA.

The company makes plastic cutlery, cups, plates, straws and other tableware items.

Blue Rock Construction of Fogelsville is doing the interior fit-out for the 88,0000-square-foot-building, which has sat vacant for several years, said Jarrett Witt, vice president of economic development for Lehigh Valley Economic Development Corp. The company looked at several other sites, but wanted one with rail access.

“When a business is looking to expand, they don’t need to look any further,” said Pennsylvania Lt. Gov. Jim Cawley.

The region’s cooperation with businesses and state agencies allows for this economic growth to occur, he noted.

Yi Liu, counselor of the Economic and Commercial Office Consulate General of China in New York, spoke about the improvement in the business relationships between China and the U.S. as a result of bilateral trade relations. Companies such as Fuling Plastics could bring with them Chinese culture and friendship as they open operations in this new location, Liu said.

“You may have a better knowledge of Chinese economy and Chinese companies,” Liu said. “Someday they will become a major supplier of plastics tableware in the U.S.”

The company is one of the few Chinese manufacturing companies to arrive in the region to employ Americans, said Don Cunningham, president and CEO of LVEDC.

“This is no small relocation,” Cunningham said.

The manufacturer has been operating in China since 1992 and has made a $20 million investment in its new Lehigh Valley location, Cunningham said.

Fuling Plastics is also the largest American supplier of plastics products to restaurants that include McDonald’s, Burger King and KFC, Cunningham said. The company also supplies big retailers such as Walmart and Target, he added.

He described the Fuling Plastics as a “very significant” worldwide manufacturer to a growing economy across the state.

Xin Hu, CEO of Fuling Plastics, developed Taizhou Fuling Plastics Co. Ltd. in China, starting with a small factory with 10 employees to an enterprise of more than 1,200 employees, said Bob Chapleski, vice president of operations for Fuling Plastics USA. Hu also owns many invention patents in the plastic tableware industry, Chapleski said.

Hu’s wife, Guilan Jiang, is the president of Taizhou Fuling Plastics Co.

The company exported $60 million in 2013. All of its products are exported to the U.S., Australia and nations in Europe, South America and the Middle East.

According to a news release, the company has three production operations in China, along with a research and development center. The company also uses a public warehouse in Montgomery County to receive products from overseas and distribute them throughout the U.S.

The company decided to establish a U.S. manufacturing operation because of the increased volume associated with its products and the cost of exporting from China.

Source: LVB.com

Democrats try to force university to accept controversial project

The budget committee of Delaware's Democratic-controlled General Assembly "voted Thursday to withhold $3 million from the University of Delaware in an attempt to force the university's hand on a controversial plan to build a power plant and data center on the former Chrysler site in Newark," reports the Wilmington News Journal here.

"The money, earmarked for UD operations, was suddenly removed and parked in a contingency fund at the end of budget hearings on Thursday. Lawmakers on the Joint Finance Committee voted unanimously in favor of the move. 'When people get bogged down in the mud, sometimes you need to get a mule to pull them out," JFC co-chair Sen. Harris McDowell, D-Wilmington, told the paper. 'We want them to get off the dime and decide what they want to do. What we want is to see that Delaware has a chance at 5,000 construction jobs and 900 very high paying jobs.'"

900 jobs, really? Delaware Gov. Jack Markell's office was saying 300 jobs (plus maybe 1,000 short-term construction jobs, not "5,000"), just last winter. I sent Sen. McDowell a note asking him to tell where he's getting these job numbers. So far, zero reply. More on data center employment, from opponents, at the bottom of this item.

Back in 2011, the administration of University of Delaware President Patrick Harker approved the data center proposal. But opposition has grown, and there's now what looks like a full-fledged faculty rebellion -- unusual in a place like UD where a vocal minority, at least, of engineering and business profs can usually be counted on to support the state's key industries.

From a Chronicle of Higher Education report on May 12:

"After residents in the college town of Newark, Del., learned last year that the facility would come with its own 279-megawatt natural-gas power plant, the $1.1-billion project began drawing opposition. Professors at Delaware formally joined the battle last week when the Faculty Senate voted 43 to 0 to recommend against building the data center if it is accompanied by a fossil-fuel power plant of any size...

"A 75-year lease that university leaders have signed with the Data Centers could make the power plant the proverbial done deal... Administrators find themselves in the middle of a standoff between economic-development goals and a faculty that sees the deal as a betrayal...  The university's wholly owned subsidiary 1743 Holdings LLC, which oversees the STAR Campus, signed the ground-lease agreement in December 2012 with the company, known as TDC, for a 43-acre plot on which to build a 900,000-square-foot high-density data center."

In the faculty vote, there were 8 abstentions, the Chronicle reported, including Charles G. Riordan, "vice provost for research and chairman of a working group that university administrators appointed last fall to review the data-center project in the wake of the public criticism. The working group plans to complete its review in less than a month (and make) a recommendation to Delaware's provost, Domenico Grasso, and its executive vice president, Scott R. Douglass," boss of 1743 Holdings.

The working group remains "very enthusiastic about a data center on the STAR Campus because that is consistent with our vision for that campus," Mr. Riordan told the Chronicle. Riordan and Prof. Michael Chajes, the ex-engineering school dean who wrote the faculty's resolution against the data center, added that they "would not mind seeing the data center proceed without the cogeneration plant."

But that sounds like wishful thinking: "The Data Center's Mr. Kern rejected that proposal outright... Mr. Kern said TDC's lease with 1743 Holdings does not allow officials to block construction of the power plant. Assuming his company gets its air-quality permit from the Delaware Department of Natural Resources and Environmental Control, he said, it plans to proceed... 'I have invested millions'," he told the Chronicle. "If they're willing to repay my money, then sure, I'd move on if they wanted me to." He wouldn't say how many millions.

More on how-many-jobs: Kathryn Gifford, one of the Newark locals who have mobilized against the project, tells me Sen. McDowell's job projections for the proposed 279 MW natural gas power plant and data center are "phenomenally inflated" compared to these other data centers:

Google - 110 at their 84MW Lenoir site:

https://www.google.com/about/datacenters/inside/locations/lenoir/index.html

Google - 130 jobs at their 110 MW Council Bluffs site:

https://www.google.com/about/datacenters/inside/locations/council-bluffs/index.html

Apple ~35 full time jobs and 500 construction jobs for their 270-acre Reno site:

https://gigaom.com/2013/12/17/apple-makes-progress-on-its-solar-powered-data-center-in-reno-but-of-course-its-controversial/

Gifford and other data center opponents say state and local approval of the proposed center's gas-fired power plants are the investors' real objective. She notes those power plants aren't necessarily large employers either:

   Calpine, in Dover Delaware, 309 MW power plant, "250 construction jobs and 16 permanent operating positions at the site" http://delaware.newszap.com/centraldelaware/123537-70/calpine-breaks-ground-eyes-efficient-energy-future

But Data Center supporters insist the project will be less disruptive than the former Chrysler car assembly plant that filled the surrounding site from around 1948-2010.

Source: Philly.com

Econsult Solutions Presents: THE CURRENT CONDITION AND FUTURE VIABILITY OF CASINO GAMING IN PENNSYLVANIA

ESI was retained by the Pennsylvania Legislative Budget and Finance Committee (PA-LBFC) to analyze the current condition of casino gaming in Pennsylvania, as well as the future gaming environment as a whole. Pennsylvania legalized casino gaming in 2004, and the first casinos opened in 2006.  Since then, tax revenue from the casinos has contributed $8.1 billion in gaming tax revenues, in addition to property, wage, and other taxes. Tax revenue grew strongly from 2006 through 2012 due to the construction of new casinos and the introduction of gaming into regions that had no convenient casino options, before declining slightly in 2013.

Read more here…

Source: Econsult

A Difficult First Quarter for Construction Spending Comes to an End

Overview of most recent construction spending data (through March 2014) and forecast for construction spending through 2015

Total Construction Spending and its Major Components

This year's unusually difficult winter took its toll on construction activity. Nonetheless, first quarter spending for all the major groups was up compared to the same period in 2013.

The U.S. Census Bureau reported that total construction spending advanced 0.2% in March to $942.5 billion at a seasonally adjusted annual rate (SAAR). First quarter not seasonally adjusted (NSA) spending was 8.3% higher than the same period a year ago.

Nonresidential building construction spending fell for the fifth month in a row, down 1.0% to $298.8 billion (SAAR) in March. January and February spending were revised down by $3.3 billion and $6.4 billion, respectively, which was 1.1% and 2.1% of their respective previously reported numbers. That altered the monthly percentage change for January from +0.1% to ‑0.9%. Despite the recent declines, first quarter NSA spending was 3.5% higher than in 2013.

Heavy engineering (non-building) construction spending increased 0.8% to $269.2 billion (SAAR) in March. January and February spending were revised down by $2.5 billion and $5.3 billion, respectively, which was 0.9% and 2.0% of their respective previously reported numbers. First quarter NSA spending was 4.5% higher than a year ago.

Total residential construction spending, which includes improvements, rose 0.7% in to $374.5 billion (SAAR) after inching up 0.1% in February. New residential construction spending, which excludes improvements, also increased 0.7% to $229.1 billion in March, its 30th consecutive monthly increase. First quarter NSA total residential construction spending was 16.0% higher than last year and new residential construction was 17.9% higher.

See the entire article and data sets by going here…

ABI: Ongoing Weakness in Architecture Billings Expected to Evaporate in Spring Thaw

Productivity at architecture firms should improve in coming years, spurred by improving economy and more experienced staff

By Kermit Baker, Hon. AIA - AIA Chief Economist

Business conditions at U.S. architecture firms showed signs of stabilizing in April, however the month’s Architecture Billings Index score of 49.6 still reflected a slight decline in billings from March levels once seasonal adjustments were factored in. This is the fourth decline in the past six months. Even while this protracted weakness in billings continues, there are signs that growth may be around the corner. The inquiries index reading was 59.1, the strongest showing for growth in inquires so far this year. Even more significantly, the new design contracts index for April was 54.6, the strongest reading for this index since the AIA began tracking this indicator in late 2010. These figures suggest that new project activity is materializing at architecture firms, but that progress on current design projects is moving at a disappointing pace.

Firms in the Northeast and Midwest continue to report the weakest business conditions. Scores at firms in both regions have been below the 50 threshold every month since the end of last year. With an ABI score of 42.9 in April, firms in the Northeast are reporting the steepest decline in billings since the depths of the last recession. Firms in the West reported a decline for the first time since mid-year 2012. In contrast, firms in the South are reporting accelerating billings, with the strongest gains since the last construction boom.

By construction sector, residential architects continue to report healthy conditions, while billings at commercial/industrial firms have been essentially flat for the past six months. Billings at institutional firms, while beginning to recover from mid-2012 to mid-2013, have now been negative for eight straight months, with accelerating declines for the past two months.

Economy expected to rebound from weak first quarter

The performance of the economy in the first quarter was extremely disappointing, but widely assumed to be a result of severe weather conditions across most parts of the country. The consensus is that the current quarter and the rest of this year will look more like the 3.0 to 3.5 percent growth in GDP seen in the second half of last year.

Recent payroll figures support this improvement. Net job growth was at 288,000 in April, the best showing since January of 2012. Improvement in the overall employment situation continues to boost construction employment. Through the first four months of the year, 124,000 net additional construction positions have been added to the industry, more than were added in all of 2012 and two-thirds as many as were added all last year.

On reason for the likely continued improvement in construction jobs is the recent rebound in home building activity. Through the first three months of the year, housing starts averaged 924,000 at a seasonally adjusted and annualized rate. April numbers showed a strong rebound, as starts jumped to 1,072,000, with most of the gain coming on the multifamily side. Rising consumer confidence scores, reflecting consumers’ generally growing comfort level with the economic outlook, should encourage further improvements in the housing market. Consumer sentiment levels, as tracked by the University of Michigan, are almost back to their pre-recessionary levels.

Firm productivity projected to increase

Even with inherent measurement difficulties, it appears that staff productivity at architecture firms—the output per hour of labor—has declined during this past downturn. With lean workloads coupled with frequent project delays, many firms have found it difficult to maintain the productivity levels of their staff.

Moving forward, over three-quarters of architecture firms expect productivity levels to increase over the next five years. Most others expect productivity levels to remain fairly constant. There are many factors that firms feel will affect future productivity levels. At the top of the list (selected by over a third of firms as the single most important issue in determining future changes in staff productivity) is the condition of the economy/project workloads. In the view of many firms, growing workloads will help to increase staff productivity levels. Close behind is the quality of the staff/staff training at firms. Well over a quarter of firms (28.3 percent) selected this as the single most important factor in determining future productivity levels.

Firm investments in technology—communications equipment, BIM, other software and hardware—was selected by more than one in every six firms as the key to future productivity gains. Almost one in 10 firms felt that firm management was the most critical factor in future productivity gains. Other factors at the top of the list for future productivity gains: types of projects that the firm worked on (suggesting that more familiar building types could be designed more productively than if the mix were changing); range of services and activities offered by the firm; and project delivery methods of firm projects. The remaining 2.5 percent selected other factors as being the key to productivity growth over the next five years.

This month, Work-on-the-Boards participants are saying:

General architectural work remains slow and stagnant, but planning and specialized (historic preservation) work seems to be somewhat steady and stronger over the past four months. —Six-person firm in the Northeast, mixed specialization

Inquiries/RFPs are well above last year. However, selections are slow, delayed, and projects are smaller than in the past. —170-person firm in the Midwest, institutional specialization

The slowdown is definitely behind us. Finding qualified staff is now our largest concern, followed closely behind by finding office space for staff once we hire them. —36-person firm in the West, institutional specialization

Business prospects have jumped over the past month. We still need to secure them into approved contracts, but inquiries and conversations are noticeably higher than they have been in a long time. —Four-person firm in the South, commercial/industrial specialization

Source: AIA

ERISA penalizes administrators for ‘hiding’ plan documents

ERISA generally requires that plan participants get copies of summary plan descriptions, plan documents and annual reports when requested. ERISA Section 104(b)(4) provides that “the administrator shall, upon written request of any participant or beneficiary, furnish a copy of the latest updated summary, plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract or other instruments under which the plan is established or operated.” There is even an enforcement provision that subjects the administrator to penalties if they fail to provide requested documentation. ERISA Section 502(c)(1) establishes that an  administrator who fails to respond to a participant’s request for certain plan materials within 30 days could be subject to penalties of up to $110 per day for each day past the 30-day response time if the documents are not provided.

For administrators, this obligation can even apply if the participant is not specific in their request for documentation. Such was the case in Cultrona v. Nationwide Life Insurance Company, a recent event out of the Sixth Circuit Court of Appeals. Cultrona filed suit against Nationwide Life Insurance Company after an accidental death claim for her late husband was denied. During the appeal process, her counsel wrote a letter to the plan administrator requesting “all documents comprising the administrative record and/or supporting Nationwide’s decision.” Oddly, the administrator did not provide a copy of the actual accidental death policy for almost seven months.

The district court awarded $8,910 in statutory penalties to Cultrona because of the delay ($55 a day) and the administrator appealed. The administrator argued that the penalty was not warranted because she did not specifically request the document. It claimed that “clear-notice” should be applied, requiring participants to provide clear notice to the plan administrator of the information or documentation they desired. While the court agreed with the administrator that “clear-notice” was the standard to apply, it found that the administrator should have known from the request that they were being asked for a copy of the policy. Since it was clear that the policy would have to have been part of the review, it was clear it was being requested. From there, the court upheld the penalties.

For plan administrators, clear notice can be a tricky standard to try to sort out. Plan administrators should consider that ERISA clearly favors the production of documents when requested and recognize that a poorly worded request could still be enough of a request to warrant penalties. A simple solution is for administrators to avoid being accused of hiding plan documents. When responding to a request, give them what they ask for, and maybe even more (like what is required under 104(b)(4)). And if you have questions about how to respond to a request for documentation, ask for guidance from your professionals. That’s what we are here for.

Source: Employee Benefit News

Pennsylvania court refuses to enforce non-competition agreement

Most jurisdictions in the United States hold that continued employment constitutes sufficient consideration in exchange for entering into a non-competition agreement. A handful of jurisdictions however – Minnesota, North Carolina, Texas, Washington, West Virginia and (in some cases) Illinois – require employers to provide additional consideration to an employee in order for the non-competition agreement to be enforceable. Add Pennsylvania to this list.

In a case of first impression, a Pennsylvania appellate court, in Socko v. Midatlantic Systems of CPA, Inc., affirmed a trial court order finding a non-competition agreement entered into after the commencement of employment unenforceable unless supported by new consideration. In other words, continued employment alone is not sufficient consideration for a restrictive covenant to be held enforceable under Pennsylvania law.

n Socko, the appellate court brushed aside conflicting holdings by Pennsylvania federal district courts on this issue, finding them unpersuasive. Instead, the court found, the employee must receive some type of “valuable consideration” in exchange for signing the agreement, and continued employment does not meet that definition. Neither does the provision of additional nominal monetary consideration to the employee. Instead, the employer must provide some “corresponding benefit or change in job status.”

Beyond Pennsylvania, employers operating in jurisdictions where this issue remains unsettled (like Massachusetts) should seriously consider whether it makes sense to provide existing employees with some form of new consideration, such as a monetary payment, increased benefits, new responsibilities, or a job promotion, in exchange for entering into a non-competition agreement, as such consideration will only strengthen the argument for enforceability of the agreement when tested. The long-term savings in being able to enforce a non-competition agreement without prolonged litigation may be well worth the costs incurred up front.

Source: Employee Benefit News