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GKN announces $10 Million Expansion
The official announcement by GKN Sinter Metals today of a planned $10 million expansion, which is projected to add 50 full-time competitive wage jobs, at their Gallipolis plant is good news, both for Gallia County and for the over 160 current employees at the plant. That local expansion can be directly attributed to GKN’s history in Gallia County and the efforts of local, state and federal officials who coordinated incentives to keep GKN in Gallipolis.
Over the past several years, Gallia County has felt the sting of corporations moving their operations out of the county, first with the Bob Evans Farms Sausage Plant and Trucking Operations and most recently the closing of the Gallipolis location of InfoCision. While many of the Infocision employees were able to transition into “work from home” positions with the assistance of Gallia County Job and Family Services, JB-Nets and Connect Ohio, the impact to the City of Gallipolis’ income tax base at the time was estimated to be around a $25,000 loss per year. The complete closing of the Bob Evans Sausage Plant is planned for later this year.
According to Gallia County Economic Development Director Melissa Clark, while incentives are not the number one deciding factor for companies looking at relocating or expanding, they are still a factor.
“(Companies) are looking at communities. They’re looking at their bottom line and what makes sense for them,” said Clark. “If you offer these incentives up front, they’re going to pay dividends in the end. It may sound like a lot of money at first, but in the end, 50 families are going to have a good paying job now. That goes into your tax base. That’s supporting your community. In the end, that’s what your tax dollars are for. Why send tax dollars to another community, when we can have that expansion here.”
Those incentives garnered by GKN for the expansion include a Job Creation Tax Credit through the State of Ohio and an Economic Development Grant with a combined worth of $380,000, as well as a $350,000 Southern Ohio Agricultural and Community Development Foundation (SOACDF) development grant, a City of Gallipolis Job Creation Tax Credit and a grant of $60,000 from the Community Improvement Corporation of Gallia County. The total worth of the incentives equals approximately $800,000.
The expansion at the Gallipolis plant will include the installation of a new 750-metric-ton, power-compaction press along with other capital equipment to launch production of differential-gear components developed at the plant. It is expected to generate up to $20 million in additional sales for the company over the next few years.
“With that, obviously comes jobs, the whole reason that we’re here. We’re expecting to be able to increase our employment by roughly 50 full-time jobs,” said Plant Manager Matt Daniels. “That will be split between our hourly and salary workforce and probably most importantly for this area, those jobs do come with benefits.”
Daniels said over the past several years, GKN was able to increase its sales by approximately $20 million and add nearly 40 jobs on its own through the use of existing capacity.
“That level of success, there’s no way it would be possible without the diligence and persistence of our community, our suppliers, our employees, our parent company and most importantly, our customers,” said Daniels.
Ohio Representative Ryan Smith said pulling together the incentive packages both locally and at the state level was a team effort and that everyone shared the same goal – to bring jobs to the community and the region.
“It’s creating more jobs. It’s creating more opportunities for people and there’s 50 families in this community that will directly benefit from it,” said Smith. “We certainly don’t want to diminish that effect, because that is huge, especially when you’re talking about jobs with benefits and $45,000 a year, that’s fantastic.”
John Molinaro, president and CEO of the Appalachian Partnership for Economic Growth (APEG), which helped spearhead and coordinate efforts, said the organization was pleased with the outcome.
“If you haven’t been in the middle of one of these things, you probably don’t understand how many moving parts there are and how much partnership it takes to get these things done,” said Molinaro. “Certainly, the company is the critical piece and the company’s desires and needs. We went through a pretty significant period of time when the company really didn’t want to disclose where they were considering these investments among multiple plant locations.”
Molinaro commended City Manager Randy Finney for his efforts in securing the local job creation tax credit and the City Commissioners for passing the legislation, considering Finney was unable, at the time, to disclose the reason for the tax credit.
On the passage of that legislation, City Commission President Jay Cremeens said, “We knew Randy was on something hot and we’ve always trusted Randy. We did what we thought was in the best interest with this legislation.”
Molinaro also said JobsOhio went the extra mile for a project of this scale.
“It’s a testament to their recognition that 50 jobs here in Gallipolis are worth far more to the local and county economy than 500 jobs in Cleveland or Columbus or Cincinnati. They went the extra mile. They went well above what they would normally do for a project of this scale to help make this happen in this community,” said Molinero. “I can’t say enough to thank them for their understanding of how much this means to a local economy in Appalachian Ohio.”
The GKN expansion, said Molinaro, is just the beginning to what he believes will be an economic development boom in the region for several reasons, including the area’s central location to both the northern and southern automotive industries.
“There are two other things that I think are critical and one is we’ve got a great workforce. We have great people and people who know how to work. Who never gave up on making things. Who never gave up on manufacturing. Who put in more than an honest day’s work and that really makes a huge difference in a decision like this,” said Molinaro. “And welcoming communities. There are parts of this country where if you tried to do even a small expansion to a company you would have people standing in line fighting any kind of industrial development. That doesn’t happen here. We open our arms to the companies that want to locate here. We recognize they’re good for our economy.”
And most importantly, Molinaro thanked GKN for choosing Gallipolis for the expansion.
“They’re investment is a vote of confidence. It’s a vote of confidence in the workforce. It’s a vote of confidence in the great operations that this plant and these workers have established here in the past. It’s a vote of confidence for the city and the county and it’s a vote of confidence for Ohio,” said Molinaro.
This is not the first time local and state government has pooled resources and worked together to keep the plant in Gallipolis.
Gallia County Commission President Harold Montgomery said he remembered in the late 1990s when there were talks of moving the plant, then operating under a different company, to a sister plant out of state. At that time, the community pulled together and convinced the company to expand locally.
Montgomery credited the workers at that time with saving the plant.
“Part of that package was that they took huge concessions in their contract and that was a huge selling point there. Had they not done that, we probably wouldn’t be here today,” said Montgomery.
In 2005, the county and the SOACDF pulled together again and awarded a large grant to the company, to retain 28 jobs and create 15.
SOACDF Executive Director Don Branson admitted the decision was a difficult one, but said GKN lived up to their promises.
“Looking these many years later to see the effect of that and the building blocks that were laid and all the investments that corporate and local people have made into this facility, it’s just very rewarding,” said Branson.
“It has proven to be a success for the Foundation, for Gallia County, for the City of Gallipolis, for all of us,” said Montgomery. “Today is especially satisfying that we’re not here trying to save the plant. We’re here trying to enjoy the expansion of this facility.”
And when so many small towns are announcing layoffs and plant closures, Cremeens said he is thankful the announcement is the opposite for GKN.
“It’s a great day for Gallipolis. I can voice our cooperation with the County Commissioners. We’ll do what it takes, whether the City Commissioners or the County Commissioners, to make Gallipolis open for business,” said Cremeens.
For more information on GKN Sinter Metals, visit http://www.gkn.com/sintermetals/Pages/default.aspx
For more information on JobsOhio, visit http://jobs-ohio.com/