We’ve so far resisted speculating about the hint dropped into this Financial Times story last week indicating Volvo has made overtures to the Kentucky General Assembly about incentives to locate a factory in the commonwealth.
But resistance is futile — much like trying to report a nascent rumor about a major economic development project. So let’s connect some dots.
This morning, Gov. Steve Beshear announced his latest economic development trip to Europe, and it’s auto-centric. On Feb. 4, he’ll be in Bochum, Germany, to address the international CAR-Symposium, where he’ll be surrounded by more than 1,000 automotive industry decision-makers from around the world. In a release, the governor says he’ll be “sharing Kentucky’s automotive success story” at the conference, which he calls a “great opportunity to showcase Kentucky to some of the top auto executives in the world.”
Included in the announcement is one lonely mention of a stop in Sweden, home to Volvo’s world headquarters. But neither the governor’s office nor the economic development cabinet would provide IL with details about the stop, nor would officials comment on whether the automaker is on the itinerary. A state economic development official told Insider Louisville the Sweden stop “has been in the works for several months.”
So if it’s Volvo, then it’s been Volvo for awhile.
Beyond that, the trip will focus on other economic development opportunities in Europe, the governor’s office reports. To wit:
During the five-day trip, the Governor, accompanied by executive staff at the Kentucky Cabinet for Economic Development, also will showcase Kentucky’s business-friendly climate to potential new businesses and strengthen existing ties with European companies already operating in the Commonwealth.
Kentucky’s economic landscape is increasingly defined by the presence of European-owned companies. More than 170 European facilities are in Kentucky, employing more than 27,000 people. Last year, nearly 15 percent of new investment in the Commonwealth came from European-owned businesses. International trade between Kentucky and Europe topped $16 billion last year.
Foreign direct investment plays an important role in boosting Kentucky’s economy. In 2014, nearly a third of all capital investment and 20 percent of new jobs announced in the manufacturing, service and technology industries were a result of foreign-owned enterprises.
Not a peep about Volvo. Or the auto industry writ large, although Kentucky tends to punch above its weight when it comes to auto manufacturers. There are two Ford plants in Louisville — including the recently retooled Louisville Assembly Plant, in which the U.S. automaker invested more than $600 million. Toyota operates a facility in Georgetown, and GM has one in Bowling Green. There is also an immense network of parts providers supporting those facilities — and thousands of jobs.
Contrary to what the Financial Times reported, it doesn’t appear Volvo is lobbying the state legislature for tax incentives to locate a facility here. Neither Volvo nor its Chinese parent company, Geely, has a registered lobbyist in Kentucky.
A state legislator who is a member of the House Economic Development Committee confirmed to IL that Volvo hasn’t approached them about locating a facility here. And frankly, those conversations would most likely begin in the governor’s cabinet, not the General Assembly. There would be no reason to lobby the General Assembly without a proposal already circulating.
Then there’s the Ford connection. Ford sold Volvo to Geely in 2010, and Volvo has had a tough time with U.S. sales pretty much ever since, which is what prompted this recent look at U.S. expansion. Ford is heavily invested in Louisville and the state — the Louisville Assembly Plant is now the most dynamic Ford plant in North America. Strong relationships between Ford and economic development officials surely couldn’t hurt in courting a former corporate partner.
The FT also reported Volvo is talking to legislatures in South and North Carolina. Interested observers will note Volvo Trucks North America is headquartered in Greensboro, N.C. But let’s not get too excited: That’s a separate company from the car manufacturer.
So, is Volvo coming to Kentucky? We don’t know, and we likely won’t know for some time. If nobody is talking to the legislature yet, then talk is probably the only thing happening right now. But stay tuned. Beshear has about a year left in office, so the clock is ticking.