Industry Report: Manufacturing & Logistics
Friday, June 28, 2013 7:00 AM
Iowa Innovation Fund to provide capital for high-growth companies
The Iowa Innovation Corp. is working to build a new funding vehicle to help startup companies in the state to grow.
With recent legislative changes in the proposed Iowa Innovation Fund, the corporation is now in the process of interviewing prospective fund managers, said Cara Heiden, vice chair of the Iowa Innovation Corp.'s board of directors. The fund, which will be marketed to sophisticated, high-net-worth investors, will be used to support high-potential companies in the state’s targeted industries of advanced manufacturing, biosciences and information technology.
“We look forward to it being long-term and highly successful for the entrepreneur economy in Iowa,” Heiden said.
House File 615 amended the Iowa statute that formed the Iowa Innovation Council two years ago to make the tax credit component of the Iowa Innovation Fund more attractive to potential private investors. The law authorizes the state to issue up to $8 million per year in tax credits to investors in the Iowa Innovation Fund, which will be used to provide “next-stage” capital to emerging businesses to bridge the gap between angel investments and venture capital funding.
If the state can fully leverage the 25 percent tax credits, that would support a total of $32 million in capital available each year to those businesses, Heiden said.
“We’re excited about that (investment potential),” she said. “It’s a demonstration of the public and private sectors coming together. These investments have higher risk, yes, but it comes with an understanding that these investments are needed.”
Heiden credited Democratic Sen. Bill Dotzler and Rep. Mark Lofgren, a Republican, with making key changes in the legislation to ensure transparency and simplicity.
“For instance, if I’m an individual investor, when I make my cash investment, I have the ability to go to the Iowa Economic Development Authority and get my tax credit certificate,” she said. “so it’s very straightforward.”
Sidebar: Key changes to the Iowa Innovation Fund investment tax credits:
- Increases the tax credit percentage from 20 percent to 25 percent of the private investment amount.
- Allows initial investor to make a one-time transfer of the credits.
- Eliminates a three-year waiting period to receive the tax credits.
Rockwell Collins project layoffs because of sequestration
The federal government’s budget sequestration will significantly affect Cedar Rapids-based Rockwell Collins Inc., which last year derived more than one-third of its revenues from federal agencies. The aerospace electronics manufacturer announced in March that it expects to trim about 350 employees because of the automatic budget cuts. However, those workforce reductions “could be the tip of the iceberg,” Rockwell Collins CEO Clayton Jones said earlier this year. The company employs about 20,000 people worldwide.
The bulk of the effect from sequestration probably won’t be felt until the government’s next fiscal year, which begins Oct. 1, Jones said. Rockwell Collins assumed that government revenues would be down 10 percent this year, roughly half of which is directly attributable to sequestration. The company said it expects to increase its commercial contracts by 7 percent this year, however.
“Sequestration is the single worst piece of public policy I’ve seen in my 33 years in this business, and it will absolutely affect us,” said
Clayton Jones, CEO, Rockwell Collins Inc.
New manufacturing/logistics facilities in Greater Des Moines:
Old Dominion Freight Line Inc. announced in April that it hasrelocated its Des Moines service center to a 32-acre site at 6925 S.E. Four Mile Road in Ankeny. The center employs 116 people and increases the capacity for moving large volumes of freight along Interstates 80 and 35, the company said.
Automotive parts supplier DENSO International America Inc. opened a new assembly and warehouse operation at 11335 Meredith Drive in Urbandale in May. The 36,000-square-foot facility is used to assemble and store cooling modules used in the construction, agriculture and electric power industries. The facility localizes assembly of products for North American customers that were previously assembled in the United Kingdom. The Japan-based company has had a presence in Iowa since 1974, when it opened its first facility in the state in Cedar Falls.
Van Meter Inc. opened a new 70,000-square-foot warehouse-office building at 4040 121st St. in Urbandale in May. The facility enabled the electrical and mechanical components supplier to expand its local inventory levels by more than 40 percent. The Cedar Rapids-based company, which is 100 percent employee-owned, also operates a warehouse facility in Clive and has 10 other locations in the state.
ACT, community colleges join to boost skilled training certification
The Iowa Advanced Manufacturing Consortium hopes to rapidly increase the number of skilled workers in the state certified through the National Career Readiness Certificate (NCRC) program.
Using the NCRC, employers can measure and benchmark the skills of their employees and applicants, and individuals can document their skills and earn credentials. The potential payoff: thousands of additional qualified workers to fill positions in Iowa’s growing advanced manufacturing sector.
Des Moines Area Community College (DMACC) is the lead institution for the initiative, which is a partnership between Iowa City-based ACT Inc. and the state’s community colleges, Last fall, U.S. Sen. Tom Harkin announced nearly $13 million in federal funding for the project. DMACC President Rob Denson said the community colleges have set a goal to enroll 360 Iowa companies to post job openings and to administer 6,000 additional four-part NCRC assessments to workers by August. Nearly 23,000 Iowans have already attained certification, among them Denson, who earned the second-highest NCRC gold level.
Iowans pursuing employment in any industry sector can also take ACT WorkKeys assessments at no cost as part of Gov. Terry Branstad’s Skilled Iowa initiative. Previously, individuals had to pay $36 to take the battery of three tests. Nearly 5,000 Skilled Iowa employers have signed letters of intent, agreeing to post at least one job opening for which possessing the NCRC is preferred.
Sidebar: What’s tested?
The four-part NCRC Plus assessment consists of Reading for Information, Locating Information, Applied Mathematics and Talent.
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