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Economy

Jones: Tariffs on Airbus’s Mobile production line would have harmed Alabama

Brandon Moseley

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Wednesday, the Trump Administration announced that it will not impose tariffs on component parts imported to Airbus Mobile’s facilities. U.S. Senator Doug Jones, D-Alabama, welcomed the news and said that the tariffs “would have caused unnecessary harm to Alabama workers.”

“Tariffs on Airbus’ Mobile production lines would have caused unnecessary harm to Alabama workers and would have created a domino effect for the American airlines that rely on their product,” Sen. Jones said. “I’m relieved that the Administration has decided not to impose tariffs on European-made parts used in the Mobile Airbus assembly facility. However, I urge the President to reconsider issuing broad and costly new tariffs on other goods from our allies in Europe, especially at this time when we should be looking for ways to strengthen both those diplomatic relationships and the global economy.”

European governments are angry after the Trump administration announced tariffs on a host of European products and are vowing to retaliate.

On Wednesday, the World Trade Organization ruled that the United States could impose the tariffs as retaliation for illegal aid that the 28-country EU gave to Airbus in its competition with its American rival U.S. based Boeing. The U.S. has been in a trade fight for the last 15 years over the EU’s subsidizing of Airbus.

The administration has imposed a ten percent tariff on new Airbus planes as well as helicopters imported into the U.S. The administration has also imposed a 25 percent tariff on European dairy products, wine, and whiskey.

President Donald J. Trump called the WTO ruling a “big win for the United States” and asserted that it happened because WTO officials “want to make sure I’m happy.”

“The WTO has been much better to us since I’ve been president because they understand they can’t get away with what they’ve been getting away with for so many years, which is ripping off the United States,” Trump said,

The move is the latest escalation in a growing global trade war. The move heighten fears among economists that a global economic shutdown could result. Stocks have fallen this week due to the tariff news as well as reports that American manufacturing is slowing down as well. The Trump’s trade war with China is reportedly weighing heavily on businesses including manufacturers.

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The tariffs are set to go into effect on October 18.

The EU’s top trade official said the bloc would prefer to reaching a deal with the United States to avoid a tariff war.

EU Trade Commissioner Cecilia Malmstrom said a tariff war “would only inflict damage on businesses and citizens on both sides of the Atlantic, and harm global trade and the broader aviation industry at a sensitive time.”

“If the U.S. decides to impose WTO authorized countermeasures, it will be pushing the EU into a situation where we will have no other option than to do the same,” she said.

Italian Foreign Minister Luigi Di Maio vowed to “defend our businesses.”

Italian wine and cheeses would be impacted from the U.S. tariffs.

The WTO has ruled that European support for the launch of Airbus cost Boeing sales of the 747 and 787.

Airbus assembles jetliners at the Brookley Aeroplex in Mobile. The parts however are mostly made overseas in Europeans countries, including Great Britain, Germany, and France. A tariff on those parts would substantially raise the price of producing airplanes in Mobile. Problem with Boeing’s new 737 Max planes, have only accelerated demand for the Airbus A320 and A220. All of Airbus’s global factories are running at 100 percent capacity to try to reduce the backlog of thousands of aircraft that have been ordered from the European aviation giant.

FliegetFaus, a Canadian aerospace industry publication, is reporting that Airbus is considering adding a third production line in Mobile to try to deal with the enormous demand for the product. Mobile is currently producing four A320 airplanes a month. When the second line producing A220 airliners comes online that will rise to ten airplanes a month. A proposed third production line could increase that to 15 to as much as 20 aircraft a month dramatically increasing the number of aviation jobs in Mobile.

Wednesday’s decision by the Trump Administration not to impose tariffs on aviation parts destined for Mobile increases the likelihood that Airbus will add that proposed third production line at Brookley.

Senator Jones has been a vocal critic of the Trump Administration’s trade policies. He seeks reelection next year.

The major party primaries will be on March 3.

Original reporting by the Alabama Media Group, Time, and Bamapolitics’ David Preston contributed to this report.

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Economy

Gov. Ivey launches state guide to COVID-19 relief efforts

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Governor Kay Ivey on Monday announced the launch of altogetheralabama.org, an online resource that will serve as a hub of information for the state’s response to the coronavirus crisis.

The site becomes the state’s official guide to COVID-19 relief efforts, to help empower those impacted by the outbreak and those who want to offer support.

“We wanted to quickly create a trusted resource that centralizes information, resources and opportunities for businesses and individuals in need of support,” Governor Ivey said. “We are all in this together.”

The website is designed to be a comprehensive guide to aid in navigating all issues related to the COVID-19 response. Individuals and business owners can seek help and identify state and federal resources that can provide a lifeline in the form of low-interest loans and financial assistance.

Business owners, for example, can learn about the U.S. Small Business Administration’s Paycheck Protection Program, which launched April 3 to provide a direct incentive for them to keep their workers on the payroll. Displaced workers, meanwhile, can use the site to learn about enhanced unemployment benefits.

“It’s important for Alabama’s business owners and its workforce to take full advantage of the resources being made available through the federal government’s $2 trillion coronavirus relief package,” said Greg Canfield, secretary of the Alabama Department of Commerce. “The site is meant to expedite the process so both employers and employees can get back up on their feet as fast as possible.”

At the same time, the site will function as a pathway for Alabama’s good corporate citizens and the general public to offer support and solutions that can help spark recovery across the state. It will act as a portal for companies, non-profits and individuals to volunteer, make donations of supplies, offer an assistance program, and even post job openings.

The site was developed in partnership with Opportunity Alabama, a non-profit organization that promotes investment in the state’s designated Opportunity Zones. It was facilitated by a partnership with Alabama Power.

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“Over the last two years, Opportunity Zones have allowed us to build a network of stakeholders that care deeply about helping distressed places,” said Alex Flachsbart, Opportunity Alabama founder and CEO. “We hope this site will provide a gateway linking our network to those businesses and communities in economic distress, no matter where they are in Alabama.”

“These are challenging times,” added Governor Ivey. “We needed a place to efficiently and rapidly post and disseminate information – as soon as it’s available – for all affected parties. Thank you for your support and partnership in helping bring Alabama together.”

Any business, program or individual who would like to join ALtogether as a resource in COVID-19 response and relief can register at altogetheralabama.org/join.

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Economy

Alabama automakers contribute to COVID-19 fight

Brandon Moseley

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Alabama’s automakers are doing what they can to help fight the coronavirus global pandemic.

Toyota’s engine plant in Huntsville engine is producing 7,500 protective face shields for local hospitals.

The plant has donated 160 safety glasses to local hospitals. Toyota has also made a $25,000 to the United Way of Madison County to support COVID-19 relief efforts.

“With our plant idled, Toyota Alabama is eager to contribute our expertise and know-how to help quickly bring to market the equipment needed to combat COVID-19,” the company said in a statement on Friday.

Toyota is performing similar services at its facilities across the country.

Toyota is not alone. The other Alabama automakers are offering community support as well.

Hyundai Motor America and its Hyundai Hope On Wheels program have already donated $200,000 to the University of Alabama at Birmingham to help expand testing for COVID-19.

UAB CEO Will Ferniany said that the grant will support the existing drive-through testing site UAB is operating in downtown Birmingham and help other sites in Jefferson County provide much-needed screening.

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“Support like this gift from Hyundai Hope On Wheels helps our frontline medical staff understand that they are not alone in this fight,” Ferniany said. “This grant will help further UAB’s commitment to providing access to communitywide testing.”

If you think you might have symptoms of the virus or have been exposed to someone with the virus call 205-975-1881 between 7 a.m. and 11 p.m. to schedule appointments at the downtown testing site.

Appointments will be scheduled from 9 a.m. to 1:30 p.m. seven days a week. Those who are given appointments will be asked to arrive no more than 15 minutes before their scheduled appointment time and to follow the detailed instructions located on-site. You will not be tested without an appointment.

The grant will also be used to expand access for pediatric-specific testing services. About 20 percent of the downtown testing site’s patient population is age 25 and under, and officials from UAB Medicine, the UAB Department of Pediatrics and Children’s of Alabama hope to continue to expand testing for this group.

Hyundai is donating $2.2 million to support drive-thru testing centers at 11 children’s hospitals throughout the U.S. Hyundai Hope on Wheels supports families facing pediatric cancer. COVID-19 is a particular risk to children with cancer because fighting cancer means that they have a compromised immune system.

Hyundai operates an auto assembly plant in Montgomery, which has been idled due to the spread of COVID-19 to the Montgomery area.

Honda’s plants across the U.S. are assisting during the crisis, including its factory in Lincoln.

Honda has pledged $1 million to food banks and meal programs across North America. Honda’s plants have donated equipment, including N95 face masks, to healthcare providers. They have also deploying 3-D printers to manufacture visors for face shields and are investigating ways to partner with other companies in producing equipment.

The Mercedes-Benz plant in Vance has donated N100 reusable filters, protective suits and other supplies to local hospitals, as well as $5,000 to the DCH Foundation to help with the hospital’s curbside testing process.

Mercedes is working with the Alabama Department of Commerce on ways that the company or its supplier network can support making parts for the medical industry, and it is providing expertise to other manufacturers that are producing healthcare supplies.

Mercedes has also hosted a LifeSouth community blood drive that received about 95 donors.

Economic developer Dr. Nicole Jones said, “Whether retooling to create products or donating funds to obtain supplies needed to combat COVID-19, Toyota, Hyundai, Honda, and Mercedes-Benz certainly have demonstrated their roles as key Alabama economic development partners. Until a treatment is found, supplies and strategy are of great value for fellow Alabamians and Americans. Thank you to all companies and individuals who contribute in various ways.”

 

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Congress

Alabama may need 2,500 more ventilators. It’s having to compete to get them

Chip Brownlee

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Alabama may need 2,000 more ventilators than it has, and it’s being forced to compete with other states to get them on the private market.

State Health Officer Dr. Scott Harris said Friday that the Alabama Department of Public Health is attempting to source its own ventilators as a number of hospitals in the state are already struggling and asking for more.

The state requested 500 ventilators from the federal government through the Department of Health and Human Services and the national strategic stockpile. It asked for 200 of them to be delivered urgently.

“HHS has indicated that they’re not going to fulfill that anytime soon because they’re still taking care of places like New York City,” Harris said in an interview with APR.

When Alabama nears an expected surge — say 72 hours before hospitals are expected to be overwhelmed with patients requiring life support — they may be able to make the extra ventilators available.

So Alabama, like a number of states, is being forced to try to source ventilators on its own through the private market, where hundreds of hospitals, all the other states and other countries are trying to do the same.

Harris said he signed a purchase order Thursday for 250 more ventilators.

“We’re waiting to see, and then there are others that we’re waiting to hear from,” Harris told APR. “We’re doing our best to try to source these in any way that we can.”

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“We’re attempting to source those ourselves, but as you know, all the states are looking to source their own and in some measure competing with each other,” he said a press conference Friday evening when Gov. Kay Ivey announced a shelter in place order.

Alabama Sen. Doug Jones said Thursday that Alabama will likely make additional requests, but there are only 10,000 ventilators in the national stockpile and in the U.S. Department of Defense surplus. And with every other state in the country also requesting these supplies, the federal government has said that states should not rely on the national stockpile to bolster their ventilator capacity.

By Friday, nearly 1,500 people were confirmed positive with the virus. At least 38 have died. Dire models from the Institute for Health Metrics and Evaluation at the University of Washington — models that influenced the state’s decision to issue a stay-at-home order — project that by mid-April, Alabama could have a massive shortage of ventilators and hospital beds.

“The timeline I think makes sense and the time when we’re expected to have a surge is the part that was most useful to us,” Harris said. “We’ve been trying very hard to get an order in place with regards to this surge that we expect to happen.”

The model estimates that Alabama could have a shortage of 20,000 hospital beds, 3,900 intensive care beds and more than 2,000 ventilators.

At least 3,500 ventilators would be needed at the peak of the COVID-19 outbreak in mid-April, according to the IHME model. Last month, Alabama Hospital Association President Donald Williamson said the state has a surge capacity of about 800.

The same model projects that about 5,500 people could die from COVID-19 in Alabama by August. However, the model is live and is regularly adjusted. Earlier this week, it suggested that 7,000 people could die by August.

Harris said the state, over the past couple of weeks, has added a few hundred additional ventilators to its capacity by converting anesthesia machines and veterinary ventilators for use on those infected with the coronavirus.

“Yet, even with adding all of those ventilators, going up by a few hundred units, which means to tell you that we’re still using around the same percent of all of our ventilators even though the number [of ventilators] is going up,” Harris said. “So we know that there are more patients on ventilators.”

The state health officer said some hospitals in the state are already struggling but others are cooperating to share resources.

“They are really working hard to make sure that they have what they need, and we’re trying very hard, along with the governor’s office, to make sure that Alabama has enough inventory,” Harris said.

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Economy

Report: 92 percent of small employers negatively impacted by coronavirus

Brandon Moseley

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Thursday, the National Federation of Independent Businesses said that 92 percent of small employers surveyed report that they have been negatively impacted by the forced economic shutdown to fight the spread of the coronavirus.

The NFIB Research Center’s latest survey on the current impact of the COVID-19 outbreak on small business shows continued deterioration of the small business sector. The severity of the outbreak and the regulatory measures that cities and states are taking to control it are having a devastating impact on small businesses.

92 percent of small employers are negatively impacted by the outbreak of the novel coronavirus. This is a marked increase from just ten days ago when 76 percent of small employers reported negative impacts to their businesses.

Only 3 percent reported that they are positively impacted. These firms are likely experiencing stronger sales due to a sharp rise in demand for certain products, goods, and services. Grocers, for example, are listed by government as essential businesses and are allowed to operate. With the closing of restaurants and all the schools means more people are eating their meals at home.

The NFIB believes that this will likely ease in the coming weeks as consumers feel more secure about their personal supply levels.

While State-specific data is unavailable, Alabama NFIB State Director Rosemary Elebash said, “Without a doubt, the coronavirus has taken a tremendous toll on Alabama’s small businesses. Our members are determined to get through this, and they’re working to apply for Paycheck Protection Program loans and other forms of financial relief so they can avoid layoffs and having to close the doors for good.”

Alabama Lt. Governor Will Ainsworth said, “We have organized an Emergency Small Business Task Force to identify problems our businesses are facing during this difficult time. We need to bring clarity to issues and government orders that are often confusing and to effectively communicate solutions and direct business owners to resources that can help. NFIB is an indispensable member helping to guide this task force.”

Nationwide, almost all small employers are now impacted by economic disruptions related to COVID-19. Just five percent of small businesses are not currently affected by the outbreak.

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Of these businesses, 44 percent anticipate that changing if the outbreak spreads to, or spreads more broadly in, their immediate area over the next three months.

Of the small businesses that were negatively impacted. 80 percent report slower sales, 31 percent report that they are experiencing supply chain disruptions, and 23 percent report concerns over sick employees.

Even President Donald J. Trump (R) has expressed concerns that the cure may be worse than the virus.

The big questions for the economy going forward is how long are these extreme measures going to last going forward and how long can small businesses continue to operate under the current conditions?

About half of small employers report that they can survive for no more than two months of this. About one-third said that they believe they can remain operational for 3 to 6 months.

Many small business owners are anxious to access financial support through the new small business loan program in the CARES Act to help alleviate some of the financial pressures building up.

Just 13 percent of small employers reported not as severely impacted and expect that they can remain open indefinitely.

Almost all small business owners are taking some sort of action in response to the outbreak by adjusting to changing economic conditions or protecting themselves from potential disruption.

Only 5 percent of owners have not taken any action in response to the outbreak. This is a marked departure from more than half (52%) that reported not taking action three weeks ago.

The actions taken by most small employers are those related to recommended CDC steps to protect and prevent the spread of COVID-19 in the workplace including talking to employees about hand washing and social distancing and disinfecting and cleaning offices and workplaces more frequently.

56 percent have scaled-down or adjusted business operations. 26 percent have delayed payments to their creditors.

The level of concern among small business owners about the coronavirus impacting their business has increased significantly over the past three weeks.

About 72 percent of small business owners surveyed reported being “very” concerned about its potential impact on their business now compared to just 16 percent on March 10th. 22 percent said that they are “somewhat concerned”. Only six percent surveyed said that are “slightly” concerned; while only one percent reported that they are not at all concerned.

Due to escalating financial stress on the small business sector, more small businesses are talking with their bank about financing needs than was the case 10 days ago. About 29% of small employers have talked with someone at their bank or with the Small Business Administration about finance options, and 23% are planning to do so soon. Another 38% of small employers have not, and do not, intend to do so.

The CARES Act includes new small business loans through the Paycheck Protection Program (PPP). Almost two-thirds of the small employers surveyed plan to apply for the loan. The PPP is another targeted loan assistance program to help small businesses weather the rapidly changing economic crisis.

The vast majority of small businesses are now impacted by the COVID-19 outbreak, and owners are taking the threat to their business seriously.

Many owners have already sought out financial help and more are planning to do so in the near future. The outbreak has left few, if any, owners unscathed. The economic impact is immense, and now, the questions are how long will this last and how quickly can the small business sector recover when this ends.

This survey was conducted with a random sampling of NFIB’s 300,000 members. The survey was conducted by email on March 30, 2020. NFIB collected 1,172 usable responses. The small employers surveyed have between one to as many as 465 employees.

As of press time, COVID-19 has killed 6,096 Americans. 228,875 Americans have been confirmed as having active cases. Of these 5,421 are in serious or critical condition. Dr. Anthony Fauci estimates that between 100,000 to 200,000 Americans will die if the public will practice the social distancing policies that the administration is recommending to combat the spread of the coronavirus strain that causes COVID-19, SARS-CoV-2.

The number of American deaths from COVID-19 has doubled since Sunday and has been doubling every three or four days for weeks. The White House Coronav-2irus Task Force has presented modeling showing over one million American dead over the coming months if we do not practice their social distancing recommendations.

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