teve Beshear, Kentucky's governor since December 2007, hopes to augment the Bluegrass State's traditional manufacturing prowess in the automotive industry by attracting an array of high-tech manufacturers, including those specializing in alternative energy. Spreading the state's work-force training efforts to rural efforts is another of Beshear's goals. The state's 61st governor recently discussed his economic development vision in an exclusive interview with Site Selection.

   Site Selection: Which industry sectors, besides automotive, is Kentucky targeting for investment in the state?
   Gov. Beshear: The automotive industry and the adjacent industries that supply it are extremely important to Kentucky and have been for some time. Manufacturing in general is important to Kentucky, accounting for almost 19 percent of our domestic product. We are concentrating on developing advanced manufacturing in addition to automotive areas. We have emphasized everything from pharmaceuticals to electronics, aircraft engines, aluminum and plastics. Everything you can think of. It's all very important to us.
   Another area of new significance is energy. Kentucky has always been a leader in coal production. We are going to expand our energy vision to include alternative fuels and renewable resources. We are actively pursuing businesses in that sector. We have made some great strides in the area of incentives, but what I am going to be emphasizing more is trying to develop approaches we can use to help our existing businesses. Obviously, we have our incentives, but I want to come up with additional ways to help small- and medium-sized companies to continue to grow and create jobs."

   SS: What is Kentucky doing to encourage investment by high-tech companies?
   Gov. Beshear: We are making some aggressive efforts to encourage high-tech companies in Kentucky. Our Cabinet for Economic Development has contracted with the Kentucky Science and Technology Corporation to administer the Commercialization and Innovation Centers that provide services to Kentucky's entrepreneurs and scientists. That is producing some very good results. In just five years, we have attracted more than $200 million in high-tech investment, and 390 new companies have been created in the high tech area.

   SS: When you become involved in the company recruiting process, what are some of the questions you are asked?
   Gov. Beshear: It's imperative that a governor be personally involved in economic development activities. After all, companies that are looking at the state want to know if its chief executive is personally interested in them and involved in trying to make sure they get the best deal possible. I already have been [involved] in my short time in office. I find that companies are interested in availability of workers with necessary skills. They are interested in training programs. We have a number of work-force training programs that provide the flexibility and customization that companies require. That helps set us apart from some of our competitors. Our Bluegrass State Skills Corporation creates partnerships with businesses and industries. Companies, particularly the large users, are also interested in the cost of power in Kentucky. Kentucky has one of the lowest power rates in the nation, due in large part to Kentucky coal. That's a significant factor in the thinking of a large energy user looking to locate a facility.

   SS: You are planning an economic development trip to Japan in June. What are your objectives?
   Gov. Beshear: Japan's investment in Kentucky is not only significant, but essential to us on so many levels. When we opened our economic development office in Japan in 1983, we had less than a half dozen Japanese companies in the state. Today, there are 153 Japanese companies with facilities in the state, employing almost 40,000. That relationship is vital to Kentucky's economic future.
   I am excited about my first trip to Japan. We will explore new opportunities that might be available. Even as large as the Japanese presence in Kentucky is, it's just at the beginning stages. We've only begun to tap the potential in that relationship. Our office in Japan celebrates its 25th anniversary this year. It's a vital link.

   SS: Does Kentucky have any major infrastructure projects under way that will encourage economic growth?
   Gov. Beshear: We have a number of what I call "megaprojects" on the drawing board, and we are actively designing plans for them. They mainly involve bridges across the Ohio, and are obvious factors in our transportation system. These include the Louisville bridges project [two bridges linking Louisville and southern Indiana], the Brent Spence Bridge project [replacement of bridge connecting Cincinnati to northern Kentucky] and bridges in Henderson where I-69 will come out of Indiana into Kentucky. All will play a major role in not only maintaining, but increasing, the transportation advantage Kentucky has because of its geography.

   SS: What are Kentucky's biggest economic development challenges?
   Gov. Beshear: One of the areas we must continue to emphasize and improve is training of our work force. We have a highly skilled work force in many parts of the state, but we need to increase training in the more rural areas so we can create even more economic activity. The Louisville and Lexington areas already have a skilled work force in place, as do the areas near our major universities and community colleges. Our job is to spread out that skilled work force around the state to increase economic activity.
   Another challenge is that we are determined to become a leader in clean coal technology. There is no question in my mind that more regulation is on the way on greenhouse gas emissions, and obviously those emissions in Kentucky, as all over the world, contribute to global warming. Kentucky has a responsibility to step up and do its part to control those types of emissions. At the same time, our nation depends on coal to produce more than half of our electricity. Our job is to develop clean coal technologies to clean up coal, make it greener and thereby not only ensure the environmental future of our country and world, but also ensure the future of Kentucky coal. We will play a major role in R&D efforts.    American Howa Kentucky, (AHK) a subsidiary of Japan-based Howa Textile Industry Co., is one of the latest Japanese firms to settle in Kentucky. AHK moved into an 80,000-sq.-ft. (7,400-sq.-m.) facility in Bowling Green's Kentucky Transpark. The company, a Tier-2 supplier to the auto industry, will manufacture dash insulators, headliners, sunshade trims and other interior products. The deal augments an already robust automotive sector presence in the region.
   "The primary reason we selected Bowling Green is its proximity to many of the OEMs," says James Jones, plant manger at AHK. "If you were to look at a map, you would notice that we are surrounded by Toyota, Nissan and Honda, many different facilities."
   Jones says the strong work ethic evident in Bowling Green was another factor during AHK's site search, which took them to about 10 locations in Kentucky.
   "Bowling Green workers have an outstanding work ethic and consideration for making a world class product," he says. "They have a keen way about their craftsmanship. GM located production of one of their signature vehicles in Bowling Green – the Corvette – and that was a driving factor."
   AHK will begin an expansion of its plant in August that will increase the facility's size to 310,000 sq. ft. (28,800 sq. m.). AHK will employ about 50 by the end of 2008, 150 by the end of 2009 and eventually top out at about 200, Jones says.
   "An important point about this location is that it is in a transpark," Jones says. "Logistically, it's a dream with access to rail and truck, and soon, an airport. Being in that type of situation is kind of unique."
   Relocating the Bowling Green airport to the Transpark area has been a possibility for several years. However, the proposal still awaits FAA approval and no specific date has been set for the project to begin. The eventual move is still on the drawing board, says Jim Hizer, Kentucky Transpark president and CEO.    Wabash National Corp., a Lafayette, Ind.-based manufacturer of semi trailers, chose Franklin for the site of its second manufacturing plant. The company plans to build a 300,000-sq.-ft. (27,879-sq.-m.) plant and eventually employ up to 460.
   Joe Zachman, Wabash National's senior vice president of manufacturing and COO, says state incentives, which include up to $4 million in tax benefits under the Kentucky Industrial Development Act, were a major factor in the company's decision. The company decided it needed to place a manufacturing plant in the U.S. southeast to get closer to its customer base. The Kentucky site accomplishes that objective, Zachman says. It also gives the company good access to labor for its assembly jobs.
   "A lot of it had to do with logistics," Zachman says. "The site is right on I-65, the same as the site in Lafayette. The distance [about 300 miles, or 483 km.] between the two is not too far for material shipping. It gets us 300 miles closer to our southeast customer base. The Kentucky government stepped up and gave us a better incentive package."
   Wabash National also looked at sites in Tennessee and North Carolina.
   Zachman says a construction timetable depends on market factors, but the company hopes to break ground on the project late this year or early next year.