Seoyon E-Hwa Interior Systems, a Tier 1 automotive parts supplier to Alabama’s Hyundai assembly plant, announced plans earlier this month to invest more than $5 million to expand its operation in Dallas County.
Seoyon E-Hwa will add 60 jobs to its current workforce of 436 in Selma. This will makes the company one of Dallas county’s largest employers.
“We’re excited that they’re here, and we’re excited that they’ve grown from 125 jobs in 2005 to currently 436,” said Wayne Vardaman, the executive director of the Selma & Dallas County Economic Development Authority.
Vardaman expects Seoyon E-Hwa’s expansion project to get underway in April, with a potential completion by the end of September. The company’s total investment will be $5.14 million.
Hyundai Montgomery assembly plant has a large network of suppliers in Alabama, including Seoyon E-Hwa in Selma. The factory in Selma’s Craig Industrial Park produces several molded plastic interior trim parts for vehicles assembled at the massive Hyundai Motor Manufacturing Alabama plant in Montgomery. This expansion is in conjunction with new vehicle production planned for later this year at HMMA’s plant.
Economic developer Nicole Jones told the Alabama Political Reporter, “Through collaborative efforts between the public and private sector, our state has positioned itself as a national and world leader the automotive industry. Automobile suppliers like Seoyon E-Hwa Interior Systems are an important component of the supply chain.”
Seoyon E-Hwa’s roots date to the early 1970s with the beginning of the auto industry there. Today, the company has plants around the world and serves automakers including Kia, Volkswagen, Ford and Nissan.
“Seoyon E-Hwa Interior Systems, one of Selma’s largest employers, produces parts that feed into nearby Hyundai Motor Manufacturing Alabama in Montgomery, one of the River Region’s largest employers,” Jones said. “Seoyon E-Hwa takes a proactive approach to investment in R&D to ensure its technological competitiveness in the global marketplace.”
“I’m just excited that they are here in Selma and Dallas County, that we are open for business, and that we are growing and our companies are growing,” state Sen. Malika Sanders-Fortier told the Selma Times-Journal. “We are so excited to have 60 people who’ll have the opportunity to be employed.”
On Tuesday, HMMA was forced to suspend production after a plant worker tested positive for COVID-19, a condition caused by the SARS-CoV-2 virus which has killed over 10,000 people worldwide, most of them in the last two weeks. Hyundai is expected to be back up and operational once the health situation in Montgomery improves.
Payroll Protection Program deadline has been extended to Saturday
Congresswoman Martha Roby, R-Montgomery, this week reminded business owners that the deadline to apply for the Payroll Protection Program, knowns as the PPP, has been extended to Saturday.
“The Small Business Administration’s Paycheck Protection Program (PPP) application deadline was recently extended to Saturday, August 8,” Roby wrote in an email to constituents. “Do not forget to fill out your application if you are a small business that has been impacted by the Coronavirus pandemic.“
The PPP was a loan program administered by the Small Business Administration. It was part of the bipartisan CARES Act to address the economic collapse caused by the COVID-19 global pandemic and the forced economic shutdowns, which were implemented in the early months of the public health emergency in an attempt to slow the spread of the novel strain of the coronavirus and allow public health agencies and health care systems time to build up testing, contact-tracing and hospital bed capacity.
The PPP loans are 1 percent interest loans available through the SBA. If the business uses the money to make payroll and pay standard operating expenses then the loans will be forgiven. Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. The loan forgiveness form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers.
The PPP has been very popular, so much so that that program ran out of money just weeks after Congress passed it. Congress had to go back and provide more funding for the PPP.
Businesses can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.
Senate Democrats are meeting with the Trump Administration, Senate Republicans and House leadership on a compromise plan for a fifth coronavirus relief package. A big point of contention has been the size of the total package. Speaker of the House Nancy Pelosi, D-California, supports a $3.2 trillion coronavirus relief bill while Republicans prefer a more modest $1 trillion relief bill. The two sides are expected to continue to negotiate through Friday in an attempt to reach a compromise before the August recess.
Roby is serving in her fifth term representing Alabama’s 2nd congressional district. She is not seeking re-election.
State’s unemployment claims slowed last week
Last week saw the lowest number of new claims since the week-to-week number first spiked from 1,824 to 10,982 when the lockdown started in mid-March.
The number of unemployment claims in Alabama slipped last week after increasing through the first half of July.
There were 17,439 claims filed from July 19 to 25, according to the Alabama Department of Labor. Of those, 15,461, or 89 percent, were COVID-19 related.
Claims soared at the start of the pandemic in late March, hitting a weekly high of 106,739 in the first week of April. The rate of new claims declined sharply in May, with each week counting under 30,000 claims.
Since then, the number has decreased somewhat steadily. Claims rose several thousand over the course of this month, from 19,058 in the week ending July 4 to 23,678 in the week ending July 18.
Last week saw the lowest number of new claims since the week-to-week number first spiked from 1,824 to 10,982 when the lockdown started in mid-March.
GDP fell by an unprecedented 9.5 percent in second quarter
The Bureau of Economic Analysis released its advance estimate of U.S. GDP for the second quarter of 2020 reflecting the months of April, May and June dropped 9.5 percent in the second quarter, According to the BEA report, real GDP contracted at an unprecedented annualized rate of 32.9 percent. This is the largest quarterly decline since the series began in 1947, though market expectations were so low the actual number was slightly better than what the market and official estimates had expected.
President Donald Trump’s Council of Economic Advisors said that despite this massive contraction, the resiliency of the U.S. economy and the swift fiscal response of the Federal Government can aid in a strong recovery.
The Council of Economic Advisors said that the U.S. economy entered this contraction on a healthier and more resilient footing than it did both prior to the Financial Crisis of 2008 to 09 and relative to other advanced economies. This was due in part, to the longest expansion in U.S. history. American households also had a smaller overall debt burden prior to this pandemic than prior to the Financial Crisis. Household liabilities as a percent of personal disposable income were 136 percent leading into the Financial Crisis but were below 100 percent prior to this pandemic.
The United States had the highest growth rate among the G7 countries prior to the pandemic, with growth roughly double the non-U.S. G7 average.
The second-quarter decline in GDP was widespread, touching nearly every facet of the economy. Consumer spending, which accounts for roughly 70 percent of the U.S. economy, contributed to most of the decline, accounting for 25.05 percentage points of the 32.9 percent decline. The report also showed sharp contractions in business fixed investment, residential investment, inventory investment, and state & local government spending which contributed to the decline.
A massive but uneven decline in consumer spending (-34.6 percent at an annualized rate) revealed how quarantines have driven spending patterns. Individuals increased consumption of recreational goods & vehicles and housing & utilities, but lessened consumption of gasoline & other energy goods, health care, transportation services, recreational services, and food services & accommodation. The decline in business fixed investment was also widely spread, though it was particularly sharp in transportation equipment investment and mining structures investment, the latter reflecting subdued oil and gas production activity responding to extraordinarily low prices.
The pandemic and the forced economic shutdowns caused a sharp drop in real personal income as many workers faced lower wages, fewer hours or loss of their jobs completely. The University of Pennsylvania estimates that the CARES Act reduced the GDP contraction in the second quarter by 7 percentage points.
The Council of Economic Advisors are predicting strong real GDP growth in the third quarter. The current Blue Chip consensus forecast of 17.7 percent annualized growth in the third quarter would be the largest recorded quarterly growth rate and a 36 percent recovery of the second quarter contraction.
The Council of Economic Advisors claim that the pace of the recovery so far has exceeded expectations, providing a source of optimism as we look ahead. In fact, the majority of major economic data releases over the past month—reflecting May and June data—have surpassed market outlooks. Most notably, the record-breaking number of jobs added in both May and June beat market expectations by a combined 11.7 million. Furthermore, high-frequency data indicate that 80 percent of America’s small businesses are now open, up from a low in April of just 52 percent. Consumer credit & debit card spending has recovered roughly 80 percent from the pandemic low, with spending in low-income zip codes rebounding the furthest, now just 2 percent below pre-pandemic spending levels.
Another 1.43 million Americans filed initial unemployment claims last week, the nineteenth week the total has surpassed one million new claims.
The recovery could be threatened by surging coronavirus cases, which could force a second shutdown in some states. Governors in Texas, Florida, and California have had to implement some social distancing restrictions and Alabama Gov. Kay Ivey has had to impose a mask requirement on all citizens and even on school children.
The uncertainty with the virus and the economy has put pressure on Congress to approve another coronavirus relief package.
“Our nation is going through a time of testing,” Vice President Mike Pence said. “And let me say from my heart that our prayers and our sympathies are with all of the more than 150,000 families that have lost loved ones in the midst of this pandemic. As we continue to contend with the coronavirus in various places across our country, President Trump and our team, and the task force will continue to marshal the full resources of the federal government and the full power of the American economy to meet this moment and put the health of America first.”
“It’s amazing to think, at the lowest point in this pandemic, our economy lost 22 million jobs,” VP Pence said. “But thanks to that solid foundation that President Trump laid in our first three years, we’ve already gained back 8 million jobs just in May and June alone.”
USDA says more than 50 million Farmers to Families Food Boxes have been distributed
U.S. Secretary of Agriculture Sonny Perdue on Wednesday said that the U.S. Department of Agriculture’s Farmers to Families Food Box Program has distributed over 50 million food boxes in support of American farmers and families affected by the COVID-19 pandemic.
“The delivery of 50 Million food boxes has helped an incredible number of Americans in need,” Perdue said. “I couldn’t be prouder of the great job done by the food box program staff and the many farmers, distributors and non-profits that helped to get this program off the ground for the American people. The Farmers to Families Food Box Program got off to a strong start, delivering over 35.5 million boxes in the first 45 days, and has now reached over 50 million boxes delivered – a testament to everyone’s hard work. I have been meeting with food banks and recipients across the country and it’s been heartening to hear all the positive feedback on how the program has saved businesses and fed Americans in need. We are well into the second round of deliveries and we’re working harder than ever to continue to build on the success of the program.”
“50 million Farmers to Families Food Boxes have brought fresh and nutritious food grown by great American farmers to those most in need during this pandemic,” said adviser to the president Ivanka Trump. “I am proud of the profound impact this program has had on strengthening our workforce and nourishing hungry families. We will continue to prioritize our Nation’s farmers, ranchers, workers and families through this robust new Farmers to Families Food Box Program.”
Economic developer Nicole Jones said, “USDA’s willingness to partner with farmers and food banks nationwide is an important community development action that has helped provide stability for families and save businesses. Thank you, Secretary Sonny Perdue and USDA, for taking significant steps to assist our farmers and ensure Americans do not go hungry amidst the pandemic.”
Flavor 1st owner Kirby Johnson said, “I was actually planting green beans when this happened. A good friend called me about this program. I was going down the row real slow planting green beans. I laughed to myself that by the time this program gets in motion, (the pandemic) will be over. Let me tell you, that was a Tuesday, the following Thursday I was packing in this packing house vegetables to go to the people. I’ve done a lot of government stuff. Nothing has ever been done this quick, especially produce. People that need it need it. They don’t need it two months from now, they need it now.”
Sabrina Tumey, with the Sitka Salvation Army, said, “The produce and the fruits are beautiful. And I literally have had people being so thankful and so grateful, almost to the verge of tears.”
Vince Winter, with AC Lakeside, said, “It feels good to be able to be an active part in getting food to those in need here in Sitka, being a part of the Sitka community. There is no better feeling in the world.”
Marijo Martinec, the CEO and executive director of the Food Bank of Northern Indiana, said, “We get some very nice emails and phone calls. I mean, they can make you cry. People are really grateful for them. The fresh products have been wonderful.”
Sarah Ochoa, the community health services director for Community Action Partnership of Western Nebraska, “Definitely, there’s a need in the community. We’re not seeing the same people every week, which is a good thing, people are coming when they need it.”
Annie Forrest, who received a Food Box, said, “Being physically handicapped, this means a lot to me.”
On April 17, 2020, Secretary Perdue announced the program as part of the Coronavirus Food Assistance Program developed to help farmers, ranchers, distributors and consumers in response to the COVID-19 national emergency.
Last week, USDA announced it would launch a third round of Farmers to Families Food Box Program purchases with distributions to occur beginning by September 1 with completion by October 31, 2020. The purchases will spend the balance of $3 billion authorized for the program. In this third round of purchases, USDA plans to purchase combination boxes to ensure all recipient organizations have access to fresh produce, dairy products, fluid milk, and meat products.
Eligibility in the third round will be open to entities who can meet the government’s requirements and specifications. Proposals will be expected to illustrate how coverage will be provided to areas identified as opportunity zones, detail subcontracting agreements, and address the “last mile” delivery of product into the hands of the food insecure population.