Editor’s Note: On paper, the numbers add up to one thing: hope. Millions of dollars in new investment and thousands of new jobs were supposed to come in northern Indiana by the end of 2009 — many powered by Hoosier tax dollars. But, in mid-2010, many are nowhere to be found. WSBT-TV, the CBS affiliate in South Bend, Ind., took a closer look to find out why. Here are excerpts from the station’s in-depth report:
Hope was in the air as the ribbon was cut on 19 new northern Indiana companies in 2009. According to annual reports from Indiana’s Economic Development Corp., in the eight Indiana counties that comprise WSBT’s viewing area alone, those announcements represented more than $234 million in new investment from “competitive projects.”
An even bigger payoff?
The projects are listed as creating a total of 3,827 new jobs.
18 other companies across Northern Indiana are listed as investing $29 million in expansion, retention or training projects in 2009, creating an additional 1,312 new jobs and retaining 1,939 jobs.
It’s all part of $21.3 billion in new investment across Indiana listed by the state’s EDC since 2005 — including more than 100,000 new jobs statewide. From electric vehicles to food and furniture, the promises of new investment and new jobs they represented became a light at the end of a dark economic tunnel.
But, after weeks of research, WSBT discovered some of those jobs are nowhere to be found. We also found most of the companies in question have something else in common, too.
A Common Thread
It’s a term you’ve likely heard before, but it’s one that’s often misunderstood. Tax abatements are used extensively around the globe and right here at home. In 2009 alone, more than 20 local companies–from RV makers to steel mills, musical instrument manufacturers and electric vehicle developers — were offered millions of dollars in tax breaks in exchange for new investment and jobs.
Economic Development officials say, quite simply, it works.
“We call it, in Elkhart County, tax phase-in. It’s a tool that is used for existing as well as prospective new companies coming to the area for job creation,” said Economic Development Corp. of Elkhart County President Dorinda Heiden-Guss.
“A tax phase-in, or abatement, can be anywhere from one to ten years in term, and that may sound like a long time. But, if we aren’t doing it, someone else will. It’s highly competitive in economic development,” Guss continued.
There are plenty of local examples of how the process has worked to spur new investment.
In Elkhart County alone, EDC lists $189 million in new investment in 2009, and 4,235 new jobs — a higher number than in the previous seven years combined.
But, economic development officials admit — sometimes it can be tricky to turn those numbers from “commitment” to “reality.”
For example, Plymouth-based Electric Motors Corp. was promised about $250,000 from the state for worker re-training grants in exchange for new investment in Elkhart County, including the creation of 1,600 new jobs by 2012; 450 of those jobs were due to be created by end of 2010.
In January, then Interim CEO Ralph King said the company still intended to hire “several hundred people” to manufacture the vehicles beginning in May or June. But, as of early May, the company had instead vacated its former Wakarusa headquarters and downsized to a smaller location in Marshall County. (There was no new word, either, on its planned partnership with Nappanee-based Gulf Stream Coach Inc.)
Following the layoffs of four employees in November — about one-third of the company’s workforce at the time — only a small handful of employees remain.
It’s not a typical situation, Heiden-Guss said, but it does happen.
“There’s a certain amount of risk, I would say, with that. You’re going to believe somebody. You want to believe. But, you’re also going to do your due diligence as an Economic Development Corporation. You cannot control the enterprise system. It’s just not possible. But, each project is a case by case,” she said.
But, WSBT’s research shows those cases appear to be growing.
According to a search of archive records, Goshen, Ind., based Keystone RV Co. accepted $400,000 in state and local tax breaks for a new facility and new jobs in LaGrange in 2006. As sales surged the following year, the abatements promised appeared to be paying immediate dividends.
But, by early 2009, as the entire RV industry struggled to stay afloat, the company had laid off 265 workers at several facilities.
In New Carlisle, steel maker I/N Tek I/N Kote announced a major expansion in 2008, bringing 100 new jobs by 2010. United Auto Workers union representatives hailed the expansion as a major step toward a more stable future for local workers, and town leaders quickly approved tax breaks for the company.
But, in early 2010, company officials announced all construction on the addition was placed on an “indefinite” hold, as steel prices soared and profits dropped.
In Elkhart, Accubilt promised 33 new jobs and a $1.8 million dollar expansion when it accepted state and local tax breaks in 2006. At the time, city council members touted the announcement as “another positive sign” that Elkhart was a “city on the move.”
But, three years later, Accubilt laid off 73 workers. In late March, the company itself was on the move, closing the doors of its Elkhart facility for the last time.
And, these aren’t isolated examples. In fact, according to WSBT’s research, in many cases, tax abatement and job commitment haven’t exactly gone hand-in-hand. It’s one reason county leaders say they try to get as much information as possible before rolling out the red carpet for companies.
“You tend to question the large numbers,” said Heiden-Guss. “You’d love to see the 1,300 jobs and all the excitement and what-not. But, you don’t want to give false promises either.”
Heiden-Guss called it an “economic roll of the dice,” but one that’s “controlled”–particularly for taxpayers.
“Those companies that don’t meet those objectives or that haven’t completed their process will not receive benefits. The part where the taxpayer loses out is that those jobs that were promised don’t come to fruition. But, if the company did not meet those objectives, they are denied–do not receive–the incentive,” she said.
“I believe in accountability, and I think you’re going to find the elected leadership does too. They know firsthand that they need to be held accountable,” Heiden-Guss continued.
It’s a sentiment echoed by Elkhart County Commissioner Mike Yoder.
“Our county initiated [tax phase-ins] as a way to attract advanced technology companies–companies that would do something to diversify our economy. It’s a very important tool, because we have to come up with some sort of incentive locally to trigger the other incentives that the state kicks in. And, if we’re not offering those incentives, we’re not going to be competitive with other communities,” said Yoder, (R-Middlebury).
Elkhart County, Yoder added, has faced intense competition to land new investment.
“We’ve gone up against San Antonio, Texas, for example, that was literally just giving buildings away,” he said.
It’s one reason why Yoder says the county has felt it important to “roll the dice” on tax phase-ins. And, he says, in every case, taxpayers have virtually no risk.
“We want to see companies fulfill their commitments. But, if they don’t, we’re really not out anything, because, they wouldn’t have been here anyway. These are taxes we wouldn’t have had if the company had gone somewhere else,” Yoder said.
“There are some risks involved, no doubt,” said Indiana University-South Bend Economics Professor Dr. Grant Black. “Perhaps you do some infrastructure increases. Perhaps you give some tax breaks. And, just the way the markets work, the businesses might not pan out like they had intended.”
“Those are things that are really, usually out of anyone’s control. So, perhaps you don’t reap as strong of a benefit as you had predicted. And, there is a chance that, when you weigh your costs and benefits in the end, sometimes you may come up hurt a little bit,” Black continued.
Still, Black says there are many levels of mitigation aimed at controlling that risk, and protecting taxpayer money in the process.
“A lot of abatements have very strict guidelines that include requirements for companies to comply with. It’s not just a guaranteed reduction or elimination of taxes during that time period. If you don’t comply with the specified terms, you would then owe back taxes, for example,” Black said.
It’s why Black says it’s important for taxpayers not to count on investment until it actually happens.
“The time it takes these things to go into play is often a lot longer than people probably imagine. A lot of times we hear the big hoopla on the news and the big announcements. But, when you hear these announcements about creating lots of jobs, you really need to be aware that’s likely going to take some time, and is contingent on a lot of other economic factors,” Black said.
That could be one major reason for the increasing amount of promised jobs and investment that haven’t come to fruition.
“Some of that slowdown is likely due to the sluggish economy,” Black said. “And, even if that changes, ramping up operations could take some time. I don’t think you’re going to see that change overnight.”
In response to a recent investigation by an Indianapolis television station, Indiana’s Economic Development Corp. updated its 2009 annual report, listing for the first time the number of announced projects that never came to fruition at 13 percent statewide last year.
It’s also important to point out that many announcement projects do succeed even beyond expectations.
But, there are protections in place for those that don’t.
St. Joseph County recently passed a “tax abatement ordinance,” outlining which companies can receive tax breaks, and for how long. Elkhart County, and many other local counties, also have a review process in place to determine if companies are holding up their end of the bargain when it comes to investment and job creation.
If that doesn’t turn out to be the case, many counties have “claw-back provisions” aimed at guaranteeing at least a portion of money given for tax breaks is returned if a company doesn’t fulfill its commitments.
The goal now, Yoder says, is to increase the number that do live up to expectations.
“We want to see success,” he said. “And, it may take 5 or 6 — maybe 10 years to realize. But, we’re starting to see the change we want to see. We just need to be patient.”
Although Gulf Stream Coach Inc. has no formal agreement to build hybrid electric pickup trucks for Electric Motors Corp. (EMC), an executive with the Nappanee, Ind., RV manufacturer says he expects Gulf Stream to stay involved with the groundbreaking ”green” power project unveiled more than a year ago.
”Right now, there has been no change in the status of our position,” said Claude Donati, Gulf Stream vice president of motorized. ”(EMC) has assured us that things are going to remain the same. We look forward to helping support them where we can.”
EMC, with local headquarters in Wakarusa, Ind., announced in 2008 that it intends to build electric-hybrid pickups based on the Ford F-150 for fleet markets, including municipalities, utility and construction companies, the rental-car business and state and national parks.
The company was seeking federal grants and loans to get the company started, and EMC recently named Frank Jenkins, a 28-year executive at General Motors Corp., to be president and provide focus for the electric-vehicle startup.
EMC intends to debut its recreational version of a hybrid-electric truck, the Flash, in April at the New York International Auto Show, according to EMC CFO Ralph King in an interview this week with The Elkhart (Ind.) Truth.
King told The Truth that although EMC’s relationship with Gulf Stream was never solidified, talks between the two companies continue.
”We like the people there,” King said of Gulf Stream. ”We like the quality of work there. We think it’s a perfect fit.”
”There was no formal, written contractual obligation,” Donati told RVBUSINESS.com. ”There was an understanding that when they get further along with their development as a company and they received the orders they were hoping to receive, we were going to be the company that builds the product for them.
”We didn’t want to put any requirements on EMC and we didn’t want to put any requirements on us.”
Donati said talks between the companies are focusing on the manufacture and distribution of EMC products though EMC dealers that is unrelated to Gulf Stream’s dealer network.
”What I want to make clear is that when they get their orders, we will build the product for them,” Donati said. ”It’s not that we are partners in the business with them. They are going to get orders and they are going to give them to somebody like Gulf Stream that has the facilities, manpower and manufacturing know-how to build them.”
GulfTran LLC, a new company formed by the principles of RV manufacturer Gulf Stream Coach Inc., expects to market between 750 and 1,000 12- to 25-seat commercial shuttle buses annually beginning in November.
It’s all part of a new shirt on the part of the closely held, Nappanee, Ind.-based company outside of the tradtional recreational vehicle business.
In fact, the commercial shuttle bus arena is the second market outside the RV industry that Gulf Stream has ventured in to in recent months. The company also is part of a consortium formed by Electric Motors Corp. (EMC) to build hybrid pickup trucks. When EMC gets going, Gulf Stream will add EMC’s electric engine and drive train to Ford F-150 pickup trucks — perhaps as soon as the third quarter of 2010.
”We are loading the (shuttle bus) line now,” said Claude Donati, vice president of the new company who also is vice president of Gulf Stream’s motorized division. ”We know that commercial shuttle buses are a profitable and solid business. It’s a natural for us.”
After taking two shuttle-bus prototypes to the 2009 BusCon commercial bus convention in mid-September in Chicago, GulfTran signed up 20 commercial bus dealers and took 100 orders, Donati reported.
”We’ll have two lines running under the same roof as the (Gulf Stream) motorhomes so we can keep our overhead low,” Donati said. ” There will be a lot of shared resources.”
Thirty to 60 employees — some of whom already are on-board — will focus on building GulfTran shuttle buses.
The coaches can be customized into as many as 50 floorplans, depending on the seating configuration, he said.
”Our minimum rate of production will be achieved in January,” Donati said.
GulfTran’s commercial shuttle buses will be built on Ford E-350 and E-450 chassis, Donati said, and are expected to be used in airports, schools, casinos and medical applications, among others.
Although initially the EMC project will not have a recreation vehicle application, Donati said that ”second-generation” EMC-equipped cutaway chassis eventually could be used to build Class C motorhomes.
Donati added, however, that despite Gulf Stream’s outside ventures, the company remains committed to building towable and motorized RVs.
“It may appear from the outside that we are in hibernation,” Donati said. ” But during that time we were cutting our costs and eliminating some of the overhead. Our goal is to be a major player in the motorhome business like we were five years ago, but we want to sustain growth first.”
On Tuesday (Oct. 27), Gulf Stream announced that it was recalling 50 laid off production workers and was expected to increase its motorhome production by 25% by the first of the year.
Electric Motors Corp. is sponsoring “Green Jobs for America: An Entertainment and Education Exposition” Sept. 5 at its facility in Wakarusa, Ind.
The company will provide a sneak peak of the EMC Flash — the first ever American-made electric light duty pick-up truck.
EMC and its like-minded business partners want to inspire and educate the communities of Northern Indiana on the benefits of emerging “green” technologies and the jobs being created as a result, according to a news release announcing the event.
“With companies like Gulf Stream and EMC joining forces, we believe the ‘green’ technology movement is not only making headway worldwide, but more importantly, in Northern Indiana,” said Wil Cashen, EMC CEO. “Products like the EMC Flash are only one example of technology that is more efficient, cleaner and better for the future of the planet.”
The premier will take place from 3:30 to 11 p.m. and is free and open to the public.
The exposition will provide local “green” businesses with a unique opportunity to showcase electric vehicles, alternative energy, biofuels and other innovations from supporting industries.
Educational partners from Purdue University, Ivy Tech, Lake Michigan College and Apprentice Academy/Vincennes University will also be exhibiting the importance of “green” technologies and the future “green” endeavors of each school.
As an added bonus, the event will feature a performance by ‘The Byrds Celebration, featuring former Byrds front man Terry Jones Rogers. Famous for songs like “Turn, Turn, Turn” and “Mr. Tambourine Man,” The Byrds were an influential group of the late 1960s and early 1970s, and have remained an important part of music history for the past five decades. ‘The Byrds Celebration” continues The Byrds legacy and promises to be a special treat.
Emmy-award winning production company BCII will be filming the Green Jobs for America exposition. Footage from the event will be used to deliver the message of the need for “green” technology and the benefit of “green” jobs to a national audience.
“We hope that national exposure of BCII’s ‘green’ documentary will bring more attention to cause of ‘green’ job creation,” Cashen added. “We want this community of dedicated partners to continue to grow on both a local and national level.”
Electric Motors Corp. a leader in the emerging electric vehicle industry, continues to move forward with its plans to establish a strategic manufacturing center in northern Indiana. As part of this initiative, the company has announced an agreement with Livernois Vehicle Development, one of the largest automotive engineering firms in Detroit, according to a news release.
An industrial automation and assembly expert, Livernois will provide the engineering services to ensure that EMC’s electric drive train systems are fully compliant with the chassis and body parameters of light-, medium- and heavy-duty vehicles, including the Ford F-150 pickup, which will be retrofitted with EMC’s electric drive train systems. Livernois will be launching an electric vehicle engineering division as a direct result of its joint venture with EMC.
“Livernois is very excited about partnering with EMC on this exciting new project,” said Norma Wallis, president of Livernois Vehicle Development. “It’s a real boost for the economies of both Indiana and Michigan. We’re creating new products as well as a new future by bringing the automotive market here in Michigan, together with the expertise of the recreational vehicle industry in Indiana.”
In addition to its new partnership with Livernois, EMC has entered into agreements with several other automotive manufacturing companies in Indiana and Michigan, including recreational vehicle manufacturer Gulf Stream Coach Inc. “Our partnership with Livernois, as well as with other leading companies, represents the beginning of a much larger network of suppliers, manufacturers, and other vendors to the electric vehicle industry,” said Wil Cashen, EMC’s CEO. “Incorporating electric drive systems into existing vehicles is fast becoming a significant part of the automotive industry’s future. Livernois’ superb engineering skills will help us achieve that goal faster and more efficiently.”
Part of EMC’s grand design is to establish Elkhart County, Ind., as the center of the electric vehicle industry in the United States. Elkhart, known as the capital of the recreational vehicle industry, has been hit especially hard by the recession, with unemployment topping 18%. EMC’s Elkhart County facilities are expected to drive a significant number of jobs to the area.
“There are three factors coming together to make the ‘perfect storm’ for the electric vehicle industry,” said Cashen. “The availability of federal loans will stimulate even more innovation in this area, and tougher CAFE standards means the auto industry as a whole is taking EV technology very seriously. But beyond government programs, the biggest factor driving this fledgling industry is the renewed entrepreneurial spirit we’re seeing once again throughout the automotive community, as established auto manufacturers and new innovators alike create a whole new class of automotive technology. We’re proud to be a leader of that movement.”
President Obama returns to Elkhart County, Ind., today (Aug. 5) at a moment when the county — so hammered by recession that Obama made it a symbol of the need for his stimulus plan — is finally getting some good news, according to Bloomberg.com.
Obama will announce Energy Department grants for electric-car development during a speech at a Monaco RV factory in Wakarusa, about 10 miles south of Elkhart.
That will follow Tuesday’s announcement by Sweden’s Dometic International AB that it plans to hire 241 people to make refrigerators for recreational vehicles in Elkhart, a city of 53,000 about 100 miles east of Chicago.
“There are signs that it is getting better,” said Wakarusa Town Manager Tom Roeder, 61.
Preparing for the president’s second appearance in six months, Elkhart County, with almost 200,000 residents, has become a symbol of Obama’s assurances that the economy, still facing tough challenges, is beginning to improve.
At the same time, indications that the economy in northern Indiana is coming out of its free fall are tentative, and balanced by signs that many people are still struggling.
Unemployment in the Elkhart-Goshen metropolitan area rocketed to 18.9% in March from 4.8% at the end of 2007. The jobless rate has eased for three straight months to 16.8% in June. Manufacturing employment, which hit an 18- year low of 44,900 jobs in March, inched up to 45,300 in June.
“Retail merchants tell me spending is up, there’s some slight improvement in housing starts and a few more vehicles are selling,” said Elkhart Mayor Dick Moore, 75, a Democrat who shared a stage with Obama on Feb. 9 when the president came to promote the stimulus.
Housing Market ‘Awful’
Still, in the automotive and housing industries, the economy around Elkhart hasn’t provided many encouraging signs.
The Elkhart area, which calls itself the RV capital of the U.S., lost more than 15,000 jobs in the past year as sales slumped at local RV and manufactured-housing companies.
“The housing markets are still just awful,” said Rick Lavers, president and CEO of Coachmen Industries Inc., which makes modular homes and sold its RV business last year to Forest River Inc. and Warren Buffett’s Berkshire Hathaway Inc.
Housing won’t recover until banks are more willing to make loans, Lavers said. “The cash has to get moving in this economy,” he said.
Since April 9, Coachmen’s shares have jumped to $1.32 from 25 cents.
Robert Wilson, president and chief operating officer of Supreme Industries Inc., a maker of specialized truck bodies and shuttle buses in nearby Goshen, said demand for trucks isn’t picking up yet.
“People are still worried about their employment, whether they’re going to find a job or keep their job,” Wilson said. “Until that changes, I don’t see the truck business getting any better.”
Obama is traveling to Indiana two days before the scheduled Aug. 7 release of unemployment figures for July. The national unemployment rate is projected to rise to 9.6%, according to the median estimate of economists surveyed by Bloomberg, from a 26-year high of 9.5%in June.
Other measures suggest the national economy may be touching bottom. Gross domestic product shrank at a 1% annual rate from April through June, after contracting at a 6.4% annual pace in the first quarter. The Standard & Poor’s 500 Index has risen almost 25% since Obama took office.
The Obama administration has prodded manufacturers to develop more efficient vehicles through a $2.4 billion grant program for development of batteries and related technologies that was included in the $787 billion economic stimulus legislation.
In addition to Obama’s trip, Vice President Joe Biden and Energy Secretary Steven Chu will travel today for events at other battery-technology developers in Detroit and Charlotte, N.C.
The factory where Obama will speak, formerly operated by bankrupt recreational-vehicle manufacturer Monaco Coach Corp., was purchased by Navistar in June.
Wakarusa-based Electric Motors Corp. will use a plant for a partnership with Nappanee, Indiana-based Gulf Stream Coach Inc. to develop an electric vehicle, Electric Motors CEO Wil Cashen said.
The company has applied for stimulus funds and would be “ecstatic” to get federal help, Cashen said.
If a local company gets an energy grant it “could be huge for our town,” said Wakarusa Chamber of Commerce President Nadine Lengacher, who owns J&N Stone, a family-run stone-veneer manufacturing company.
In Elkhart, projects funded by the stimulus, including sewer improvements and a $4.2 million airport-paving project, may have saved or created between 400 and 500 jobs, Moore said.
“We can see a light at the end of the tunnel,” said Bill Stevens, 41, vice president of Brooks Construction Co., of Fort Wayne, Ind., which rehired about 10 or 15 laid-off employees to work on a $10 million stimulus-funded construction contract on part of U.S. Highway 33 in Elkhart County. “It’s a matter of riding out the storm.”
While Lengacher sees some signs of recovery, she credits the “determination of the people who live in this county” and not Obama’s economic-recovery plan. “It’s a community that’s not one to sit back and cry because things are so bad.”
In Wakarusa today, Obama will counsel patience, said chief spokesman Robert Gibbs.
“It is going to take some time to move our economy from where we are, to get our economy back on track,” Gibbs said Tuesday. “The president will not be satisfied until we’re creating jobs.”
Coachmen CEO Lavers said many of his neighbors are getting tired of waiting.
“We’re eight months into 2009 and there’s no real perceptible turn on Main Street,” Lavers said. “I think people’s patience is about done.”
There is more good news for Elkhart County. Plans are under way for a new division of Forest River Inc. in Wakarusa, Ind. It could send another 200 people back to work, according to WSBT-TV, South Bend.
“Lifetime RV is going to be a great employer; we’re going to treat our people right,” Chris Hermon told WSBT News.
Hermon and Jeff Rank are running the new division called Lifetime RV. Its new home will be the former Travel Supreme RV production complex in Wakarusa, as first reported by RVBUSINESS.com.
“Our plan is to be a full-line RV manufacturer of all towable brands, from entry level stick and tin, all the way to high-end fifth wheels,” Hermon explained. “Our plan is to be in full production in mid- to late-October.”
The division will be bringing in a whole new production setup.
“The infrastructure is here. Our plan is to start from the ground floor,” Hermon said. “The most important thing that we have going for us is dealers are excited about what we’re going to bring to the market.”
He says based on the unique product line they’ll be offering, the experience of the people starting the division, and the available work force, now is a great time to bring a new RV operation online.
“In our mind the timing was exceptionally right with the workforce that’s available out here in Wakarusa and Nappanee,” Hermon added. “That’s really one of the things we’re excited about, is the talent pool that this area possesses.”
With the new Navistar International Corp./Monaco RV operation, plans for the Electric Motors Corp. and now a new RV company, many of the unemployed in the Wakarusa area have more to smile about.
“We’re just more than pleased. It’s our road to recovery, and we’re thinking we’re on the way. We have lots of folks who are still unemployed,” said Wakarusa Town Manager Tom Roeder. “This is just great news. We think we’re coming back.”
Indiana Gov. Mitch Daniels today (Aug. 4) joined executives from Dometic LLC, an international manufacturer of recreational vehicle accessories, and praised the company’s plans to expand its manufacturing operations at two northern Indiana plants, creating more than 350 combined jobs by 2012.
The company, which makes accessories ranging from air conditioners to sanitation systems for the RV market, will invest a combined $10 million to increase production capacity at its Elkhart and LaGrange manufacturing operations. That includes more than $6.8 million to move its refrigerator manufacturing operations from Sweden to a 150,000-square-foot facility in Elkhart, creating 241 new jobs, and $3 million to move production from a plant in Mexico, which was lost to a fire in April, to Dometic’s LaGrange facility, where it will increase manufacturing capacity of retractable RV awnings, creating 116 new jobs.
“We’ve never had a doubt. RVs will be back. Elkhart will be back, and will resume its place as a major center of economic strength for our state,” said Daniels.
The company currently employs 60 workers at its Elkhart operations and plans to begin hiring assembly, welding, maintenance and management associates immediately as the facility is prepared for production launch later in the fall.
“Our growth is a direct result of our product quality and the dedication of our associates. This new RV refrigerator factory in Elkhart allows us to serve over 70% of our customers located within a 50-mile radius,” said Doug Whyte, president of Dometic.
The company will sponsor a jobs fair early next month and plans to begin production by early November, Whyte said.
Daniels made a point that the two expansions were examples of Indiana insourcing jobs from other countries, and that the two Hoosier communities were in competition with cities in China and Mexico.
“Don’t tell me we can’t compete efficiently with the world,” Daniels said.
Elkhart’s (and Indiana’s) central location with excellent transportation connections make both ideal places to do business, Daniels added. He called Elkhart “a great part of Indiana to do business” and added that though the county fell fast and hard, “all the elements are there” for a strong recovery.
Daniels was cautious in predicting when the economy will turn around, however. He does not expect the economy to “roar back,” but he sees signs of an upturn.
Including today’s announcement, projects announced for Elkhart County so far this year are expected to create more than 2,000 jobs. That includes Electric Motors Corp. (EMC), a manufacturer of electric power drive systems for heavy trucks, which will partner with RV manufacturer Gulf Stream Coach Inc. to invest more than $80 million to establish manufacturing operations in nearby Wakarusa. The partnership holds the potential to create more than 1,600 new jobs.
EMC CEO Will Cashen was present for today’s press conference and drew praise from Daniels, who called his EMC plans “fantastic” news for the community.
Dometic, which was founded in 1958 as a division of Electrolux, now holds operations in 10 countries and employs more than 4,200 associates. In addition to refrigerators, the company manufactures retractable awnings, climate control systems and sanitation systems for the RV, automobile, heavy truck and marine markets.
Whyte said Dometic has made 35 acquisitions in the past 37 years and continues to look for other businesses to acquire to add value to its business.
“We are pleased that Dometic has selected Elkhart as the site for the relocation of its Swedish production facility. This announcement and the subsequent creation of up to 241 net new jobs to the area could not have come at a better time,” said Elkhart Mayor Dick Moore.
“While the job losses that we as a community have experienced over the past 16 months have had a negative impact on our local economy, I am confident that better times lay ahead. We are a resilient community which has both faced and overcome adversity in the past. By partnering with the state, the Economic Development Corp. of Elkhart County and the Greater Elkhart Chamber of Commerce, we will leverage this success and will work diligently to bring additional positive economic development news to the community,” Moore said.
Moore said the Dometic announcement was an example of the “great news to tell” President Obama who is scheduled to visit nearby Wakarusa, Ind., on Wednesday and announce major economic assistance for the county.
The Indiana Economic Development Corp. (IEDC) offered Dometic LLC up to $1.1 million in performance-based tax credits and up to $320,000 in training grants across the two projects based on the company’s job creation plans. The Elkhart City Council late Monday approved additional property tax abatement for the project at the request of the Elkhart County Economic Development Corp. The town of LaGrange will consider additional property tax abatement.
“Dometic has been a great partner in the LaGrange community and we’re excited that they have chosen our county as the appropriate place to grow their operations,” said Keith Gillenwater, executive director of the LaGrange County Economic Development Corp. “We look forward to working with Dometic as they grow.”
The IEDC has at least four other deals on the table for new business ventures coming to Elkhart County, David Behr, senior project manager for the IEDC’s North Central Region, told RVBusiness.
Dometic Group is a customer driven, world-leading provider of leisure products for the caravan, motorhome, automotive, truck and marine markets. Dometic supplies the industry and aftermarket with a complete range of air conditioners, refrigerators, awnings, cookers, sanitation systems, lighting, mobile power equipments, comfort – and safety solutions, windows, doors and other equipment.
A new towable RV manufacturing company is now setting up shop at the former Travel Supreme Inc. facility on Ind. 19 in Wakarusa, Ind., and is gearing up to begin production soon.
A division of a larger, well-capitalized corporation, the new company, whose name has not been revealed, will be led by two former Thor Industries Inc. executives, RVBUSINESS.com has confirmed.
The 160,000-square-foot facility housed Travel Supreme, until it closed in April 2008.
The startup will make multiple product lines, including lightweight trailers.
Further details, such as the company’s name, were unavailable.
It is at least the fourth new start-up RV manufacturing firm in Elkhart County this year, joining the ranks of Heritage One, Fiber-Lite Corp. and Earthbound RV LLC.
This news also amounts to another positive development for Wakarusa, located in southwest Elkhart County, which has been decimated by the recession.
Earlier in the year, the community welcomed Electric Motors Corp., which announced plans to manufacture electric hybrid vehicles in partnership with Nappanee-based Gulf Stream Coach Inc. And in recent weeks, Monaco RV LLC, successor to Monaco Coach Corp., began rehiring employees to reoccupy Monaco’s Wakarusa facilities to build motorized and towable RVs.
Electric Motors Corp. will host Ball State University’s “Green Summit” at its new headquarters in Wakarusa, Ind., on Thursday.
The free, all-day event will feature speakers and green vendors from around the country, giving visitors a chance to see first-hand how Elkhart County is rapidly becoming the center of the electric vehicle (EV) industry, according to a news release.
EMC CEO Wil Cashen will be the keynote speaker, who will discuss, “Why green jobs are possible in Elkhart County.” Under his leadership, EMC is bringing new EV technology to market, and focusing attention on Elkhart County as a center of innovation, green job creation, and environmentally-friendly technology.
EMC and Gulf Stream Coach Inc. in Nappanee, Ind., announced in May an electric vehicle production partnership, potentially creating more than 1,600 jobs by 2012.
EMC’s new facilities in the former DeMartini RV dealership building will serve as the company’s new Indiana headquarters, as well as a showroom for EV technology from around the world. By locating their headquarters in this strategically-located facility, EMC is leading the way in the creation of an EV industrial park that will firmly establish northern Indiana as the world’s leader in EV technology, the company maintains.
“This new facility represents another big step in applying our patent-pending EV technology to the motor home, truck, and bus industry right here in Elkhart County,” said Cashen. “We’re very pleased to be hosting the Green Summit at our new office and showroom this month, and demonstrating to Elkhart County and the world that green technology and EV products are affordable and readily available, and represent the cornerstone of a whole new industrial base for northern Indiana.”
Editor’s Note: This is the latest story written by MSNBC.com as part of an ongoing project to report on the economic crisis in Elkhart County, Ind. The story appeared in The Elkhart Truth.
In the empty factories and laid-off workers in Elkhart County, entrepreneur Wil Cashen sees “unimaginable potential.”
Seeking to capitalize on the trend toward more energy-efficient vehicles, Cashen has a plan to retrofit pickup trucks with electric motors at several of Elkhart County’s large, dormant manufacturing facilities and sell them to utility companies.
A native of neighboring St. Joseph County, Cashen would like to see this hard-hit area — which touts itself as “the RV capital of the World” — become the country’s capital for electric vehicles.
“There’s a real opportunity,” Cashen said while walking through his field of dreams — a quarter-mile stretch of dormant industrial buildings around the monster Monaco motorhome factory in Wakarusa that closed last fall.
Opportunity, yes, but no guarantees.
Across the country, state and local officials, entrepreneurs like Cashen and even some of the nation’s biggest companies see dollar signs when they look at so-called “green” industries. Add in an estimated $85 billion in federal stimulus funds earmarked for clean energy and transportation projects, and you have a mad dash of sorts to gain a competitive edge.
“There’s no question that a growing number of states, cities and companies are jockeying to expand their share of America’s clean energy economy, and they see the stimulus monies as pivotal to that goal,” said Lori Grange, deputy director at the Pew Center on the States, a research group.
In a recent study, Grange’s organization found that the number of “clean energy” jobs — which range from weatherizing homes to building 300-foot-tall wind turbines — increased more than twice as fast as all other jobs from 1998-2007.
Now, with so much federal money flowing into these sectors, Grange expects to see “explosive growth.”
That’s certainly the hope in Elkhart County, where Cashen is seeking federal funds along with others. Among them: a startup that wants to assemble huge wind turbines here and across the Rust Belt; and a company that wants to put electricity-producing turbines in large water pipelines across the country.
Cashen thinks the time is right for his company, Electric Motors Corp. –based in Malibu, Calif. — to dip into the electric vehicle sector, but his vision to transform the Elkhart region into the Detroit of the 21st century faces lots of competition.
For example, auto heavyweights Ford and Nissan and electric car startup Tesla in late June got $8 billion in loans from the U.S. Department of Energy to launch new hybrid and electric vehicles.
Also, Chrysler has made a pitch for $224 million in matching federal grants to produce a demonstration fleet of hybrid minivans and pickup trucks. Up to 165 vehicles would go to the U.S. Postal Service to test whether they are suitable for mail delivery.
In neighboring Michigan, Gov. Jennifer Granholm has vowed to make the state “the renewable energy hub of North America and the advanced-battery capital of the world.” She’s also built a “No Worker Left Behind” program that provides a $5,000 tuition voucher to retrain workers for “emerging” jobs like those in clean energy.
“Green is not the only sector we’re going after, but it’s really such a big deal,” she told business executives who gathered for a National Summit in Detroit in June. “We intend to lead the nation into energy independence.”
With so much activity on this front, even some proponents urge caution when it comes to embracing still-small industries, such as hybrid vehicle production, as the key to an economic turnaround.
“It is a smart move if we don’t push it too fast,” said Dave Cole, chairman of the nonprofit Center for Automotive Research in Ann Arbor, Mich. “It has to have a strong economic foundation and that will take a few years.”
He added: “There’s a tendency for people to underestimate the cost and the competition involved.”
Even in the greater Elkhart area, Cashen’s initiative faces significant competition. A Canadian company, Azure Dynamics, has quietly been contracting with Utilimaster to assemble dozens of hybrid delivery vans in Wakarusa.
“We actually build them,” said Jay Sandler, Azure’s vice president of sales. “They” — referring to Cashen’s company — “talk about them.”
Like Electric Motors Corp., Azure is seeking stimulus money to further develop hybrid systems, according to chief operating officer Curt Huston. Hybrid RVs? “That’s very interesting to us,” he said. Fast cars a path to hybrids Cashen, for his part, took a roundabout path to the hybrid field.
He graduated from Penn High in Mishawaka, Ind., then spent much of his career around cars, usually fast ones: servicing, racing and selling Porsches in Germany and the United States. He later founded — and eventually sold — an automotive software company before semi-retiring in Malibu, where he builds replica Porsche 550 Spyders and became a Porsche guru to celebrities like Jay Leno and Kevin Dillon.
His vision for northern Indiana came into focus more than a year ago when he recalled his early days working at Holiday Rambler, an RV manufacturer that was later acquired by Monaco, where he says he saw firsthand the area’s strong work ethic.
With so many RV manufacturers scaling back or shutting down, Cashen realized he could find plenty of able-bodied workers and empty factories to help implement his unusual plan to transform Ford F-150 pickups into hybrids by replacing their engines.
Cashen hopes to sell the vehicles to utility companies, which would take advantage of the battery packs on the hybrids to supply line crews with on-the-spot electricity in areas where power is out, without noisy generators.
Cashen won’t talk about his conversations with specific potential customers, but Dave Meisel, director of transportation services at Pacific Gas & Electric Co. in California, believes the plug-in hybrid idea has some merit. “We think the technology has real potential,” said Meisel, who manages a fleet of 8,900 vehicles.
PG&E has 350 hybrid or all-electric vehicles in place or on order as part of an alternative vehicle fleet nearly 1,500 strong, Meisel added, and that should grow to become “a significant portion” of the overall fleet. But how big, he said, is still a big unknown given that the technology is still being tested.
In May, Cashen lined up a critical partner: Gulf Stream Coach Inc., a major motorhome manufacturer in Nappanee, Ind., which has agreed to spend $10 million to retrofit a massive, shuttered building for the assembly line.
Cashen and Gulf Stream estimate that the enterprise could create 1,600 new jobs by 2011 — making it by far the biggest potential new employer in an area where unemployment is near 20%.
Jerry Conover, director of the Indiana Business Research Center at Indiana University, likes the electric vehicle idea but adds that “it shouldn’t be the only job growth in the area,” since demand is dependent on government incentives and high gas prices — both of which aren’t guaranteed to last. One key to Cashen’s venture is obtaining tens of millions of dollars in federal stimulus funds from the Energy Department to develop electric motors for the drivetrains and, not insignificantly, money from the Labor Department to train workers in handling high-voltage systems.
Cashen’s strategy for dealing with uncertain federal funding is to ramp up his project slowly. But that also means there is little to show so far: No properties had been acquired through early July, and Gulf Stream does not yet have any F-150 plug-in hybrid prototypes available for viewing.
Still, many laid-off workers are hopeful that Cashen’s project will bring new jobs to RV-centered towns like Wakarusa, where many industrial parks look like cemeteries, replete with well-kept lawns but not a soul or a sound around.
Marv Burns, a Vietnam vet with 32 years in the RV industry, is among the 2,000 people who’ve applied for a spot with Electric Motors Corp. — even though he’s not really sure how the hybrid technology works.
That doesn’t matter, he said, “I do know that it’s brought hope.”
Electric Motors Corp. (EMC) now says it may start building prototypes of its electric and hybrid vehicles as early as this fall in Elkhart County.
“Everyone’s pursuit is really collectively to try and generate as many jobs as we can here,” said EMC President Brad Rinehart.
For the last couple of weeks, officials with the EMC have been working hard on the foundation to build electric-hybrid vehicles in our area, according to WSBT-TV, South Bend, Ind.
“We have several engineering efforts going on presently, some in Detroit, some in California,” Rinehart explained. “We also have infrastructure that we’re working on, getting ourselves facilities here and working with our partners here.”
Part of those partnerships includes the possible use of vacant RV buildings in the Wakarusa/Nappanee area.
“We are looking at several different possibilities right now,” Rinehart added. “We have not solidified any of those yet; but we are in negotiations presently.”
For now, the hope is to begin low volume production later this year.
“We’ll have prototypes out, engineering prototypes, in the next few months,” Rinehart said. “We’ll have working prototypes by right around August, September. Our goal is in the next few years to produce tens of thousands of vehicles.”
The company recently set up e-mail addresses so people interested in working for the company or becoming a supplier can contact the company.
“The e-mail program collects their e-mail addresses, collects the information about who they are and what they do,” explained EMC’s Ralph King. “Let’s say next November or December as we’re starting up some of the early production lines, we’ll have the information.”
The company says there will be major announcements made about development plans during the next couple of months.
Meanwhile, it’s been a busy month for EMC, according to thedeal.com
The Camarillo, Calif.-based firm became a public company on May 5, when it was acquired by the holding company Optimax Industries Inc. In announcing the deal, EMC CEO Wil Cashen noted that the public platform will help attract a broader investor base. “Investor interest in green energy in general and electrification of automobiles in specific has never been higher,” he said.
Electric Motors Corp., which intends to open factories in Wakarusa and Nappanee, Ind., to build electric vehicles, is accepting job inquiries.
The company has set up e-mail addresses to receive inquiries concerning employment, partnership opportunities and service company opportunities, according to The Goshen (Ind.) News.
The company is in the engineering and set-up phase of its operations and company officials said the e-mail addresses will ensure everyone interested in the company will receive information relevant to their interest and notification as the opportunities become available.
Those interested in being employed by, developing a partnership with or providing services to EMC should send an e-mail these specific addresses:
- For employment: email@example.com
- For partnership opportunities: Partners.firstname.lastname@example.org
- For service opportunities: Services.email@example.com