TARGETED INDUSTRY AND MANUFACTURING BUSINESS DYNAMICS REPORT 2008

FOR NORTHEAST INDIANA

Released January 29, 2009

Prepared by The Community Research Institute at Indiana University-Purdue University Fort Wayne
Funded by the Northeast Indiana Foundation
Supported by the Northeast Indiana Regional Partnership

INTRODUCTION AND BACKGROUND 1

SUMMARY BY THE NUMBERS2

NEW AND EXPANDING4

CLOSINGS, LAY-OFFS, AND DOWNSIZING6

NAICS OR TARGETED INDUSTRY REPORTS7

2009 ANNOUNCEMENTS9

COUNTY SPECIFIC REPORTS10

APPENDIX-LIST OF EVENTS32

DISCLAIMERS: The following report is based on announcements and specific company information. In reality, expansions or any type of dynamics within a company do not always become press releases. In no way does this report reflect the business dynamics of every company in northeast Indiana. This report monitors activity in manufacturing and in certain targeted industries. There are many service related industries, as well as retail and the accommodation and food services industries, which are not included in this report. CRI has worked with the local county economic development officesto check the information contained herein, but announcements do not always manifest themselves in the future as an actual event. We will make revisions to past year’s reports when the data is available or if the event is especially note-worthy, but revisions are often not as public as the original release.

NOTES: not all expansions involve new jobs. Investment in capital equipment or building expansion is an investment in the community. The term “Lay-offs” in this summary refer to temporary lay-offs, although it is acknowledged this term can be blurred. For 2008, very short term lay-offs were not monitored, although they may be for 2009 as the practice may be becoming more widespread. Closings are recorded in the year they occurred. New and expanding events are recorded when some type of action has occurred, such as a ground-breaking or hiring.

INTRODUCTIONS AND BACKGROUND:

The Community Research Institute has been tracking business dynamics in the 11 counties of northeast Indiana during 2008-the good news and the not so good news: expansions, new business announcements, as well as layoffs, closings, and downsizings. Acquisitions are also monitored since they sometimes hint at events which may be coming. Lincoln Schrock of the Northeast Indiana Regional Partnership (NEIRP) and at the Indiana Northeast Development Corporation prior to the NEIRP, had been tracking these events for decades prior to his retirement last year.

There are some changes this year compared to past reporting; some of these changes are due to technology, and some of the changes are due to the NEIRP’s efforts to focus on certain sectors. For example, for years, Indiana Northeast Development’s emphasis was on manufacturing changes in nine counties, and eventually logistics, warehousing, and distribution were included since these areas were closely connected with manufacturing. CRI includes these sectors, but adds any industry or businesses which are part of the defined “targeted industries”-those areas which NEI has some strength, and which can be regarded as pillars around which to build the economy. Therefore, in addition to logistics and manufacturing related events, we have included finance and insurance; specific defense industry strengths; medical equipment including software development; advanced manufacturing or advanced materials; and the food processing industry.

As we develop our definitions and learn about the companies in our targeted clusters, we may error on the side on inclusion. For example, in the food processing targeted industry, not only are we including companies which manufacture food products, but we also are currently including some agricultural businesses, some companies which service machinery used in the food processing or restaurant business, as well as some manufacturers who may peripherally manufacture goods which are used in food processing, such as packaging material. In addition, certain business services industries and major employers which are not classified in manufacturing or a targeted industry, such as hospitals, are also included in this report. Given all these changes, it is difficult to compare this year’s activities to past years, but in the years going forward, there should be a consistent set of industry areas and geography which should make comparisons much more meaningful.

At least one other point should be emphasized. This report reflects announcements or known activities, and not every business makes announcements when they expand their personnel, purchase a piece of capital equipment designed to improve their process, or even lay-off or not replace retiring personnel. There are numerous home-grown industries which start out small and eventually grow to a recognized community business. This report will seldom capture any of those events. In many aspects, this report captures a small part of all activity, and this is evident when the Bureau of Labor Statistics' or Bureau of Economic Analysis' annual employment numbers are released later in the year. What is the value of this particular report, one may ask? It may be to simply show the known activity in those industries, i.e. the targeted industries, which have received special attention and involvement from economic developments staffs as well as taxpayer dollars in terms of tax abatements, training, and other incentives. To put everything in proper perspective, other events such as known closures, downsizings, or layoffs are added to the report, and hopefully this will give an idea of what type of environment businesses and economic development offices have been operating during the reported year.

SUMMARY BY THE NUMBERS

There were 14 new company announcements in 2008, with 728 known or announced new positions.

There were 118 expansions announced with 3,253 new jobs. Expansions also accounted for $948 million dollars of space or equipment investment, and an additional 2.5 million square feet in use.

There were 19 closings in 2008 (this does not include closings announced in 2008 scheduled to occur in 2009). There were 1,995 positions associated with these closings. Three of these closings were related to the decision by Vera Bradley to move their sewing staff inside the business as opposed to contracting out to companies. Some of these lost positions were offset by the subsequent expansion at Vera Bradley.

There were 17 downsizings with at least 1,221 jobs were lost due to these events. Four of these announcements were from the same (parent) company, Fleetwood/Goldshield. Downsizings are sometimes the prelude to more downsizings or even closings. For example, Sun Valley in Howe experienced a loss of 80 jobs in 2008 through downsizing, and announced that they would close in 2009.

There were also 8 layoffs affecting 526 jobs. For the most part, it is not known when these positions will be reinstated, but occasionally there is good news. Sirva had announced a layoff in early 2008, but later in the year they also announced an expansion as a different part of the organization is scheduled to move to Allen County from Illinois.

Another event which has some correlation to future closings is acquisitions. In 2008, there were 25 known acquisitions (note that two of these were the same parent company with plants in two counties (Altivity Packaging), as well as four physician offices being acquired by Parkview).

The charts below summarize these announcements by type of event and by job.

Finally, there were a number of announcements made in late 2008 relating to closings in 2009. While we could have added these announcements to the 2008 totals, we are reporting these closing events in the year in which it occurs, and this is another change from previous year’s reporting. There were 12 closings announced in late 2008 which will affect 1,825 jobs in 2009. Although it is difficult to compare this number to late 2007 announcements (since the tracking system just went into effect in 2008), we could compare events in the first quarter of 2008 with announced closing for the first quarter 2009. Of the 12 closings announced in late 2008 for 2009, sevenare projected for first quarter 2009. These affect 1,020 positions. In contrast, there were three closings that occurred in Q1, 2008 and these closings affected 345 positions.

Given the general economic state of NEI and the nation at this point, it may be interesting to investigate whether our “negative events”, i.e. closings, lay-offs, and downsizing can be tied to the general economic malaise. The following two charts track the date the event is to occur, that is, not the announcement date. The numbers related to negative events, as well as people and jobs affected, are higher in late 2008 and early 2009. Note also that there are a few events for which we could not ascertain the number of people/jobs affected.

NEW AND EXPANDING

There were 14new companies announced in 2008. Highlights are listed below, with more detail contained in the County Section of this report.

1Four in Allen County and these are projected to have rather modest starts (the largest of these is projected to have 22 employees).

2Two in Whitley County, both rather modest with a total of 17 new employees.

3One each in DeKalb, Steuben, and WabashCounties. The Wabash project, ForeverGreen, was originally announced in DeKalbCounty three years ago.

4Two in HuntingtonCounty, with a total of 30 new employees. As noted in the County Section, Huntington had a new project announced in 2007, NuFuels, an alternative energy plant. In 2008, NuFuels announced a revision in the plans, but no work on the project as begun at this time.

5Three in GrantCounty, including two businesses which project approximately 300 employees each within three years.

Announcements indicate that these 14 new companies will provide at least 728 jobs, put an investment of over $259 million dollars into the area, and require a total of367,000 square footage.

Of these 14 new companies, only one was in the vehicle parts manufacturing area; and six others were in some type of manufacturing area. More detail regarding industries is summarized in the Targeted Industries section.

As a matter of comparison, in 2007, there were 47 new business announcements, and these projected 791 new employees with a $421 million dollar investment, and just over a million new square feet. In terms of new jobs, the largest announcements in 2007 were HiShear Automotive-which announced 149 jobs[1] and Eckhart Woodworking (for RVs) with 70 jobs.

In 2008, there were 117expansions announced which involved 3,253 new jobs. Highlights are listed below, with more detail in the County Section of this report.

  • Adams County: 6 expansions29 announced new jobs.
  • Allen County:44 expansions1,652 announced new jobs.
  • DeKalb County:10 expansions 224 announced new jobs.
  • Grant County:8 expansions72 announced new jobs.
  • Huntington County:10expansions144announced new jobs.
  • LaGrange County:2 expansions1 announced new job.
  • Noble County:7 expansion 441 announced new jobs.
  • Steuben County:8 expansions 177 announced new jobs.
  • Wabash County:8 expansions212 announced new jobs.
  • Wells County:6 expansions60 announced new jobs.
  • Whitley County:8 expansions241 announced new jobs.

As shown in the chart below, hospital expansions accounted for a major part of the dollar investment and space expansion, although very little in the way of personnel expansion was anticipated.

In addition, five businesses announced in late 2008 that they will expand in 2009. These events will be included in the 2009 report. There were 130 jobs anticipated, and all of these jobs were in the manufacturing area; one of these was in a targeted industry, Cardinal Grain Systems in Whitley is potentially in the food processing section.

As a matter of comparison, in 2007, there were 108 announced expansions in NEI which included 1,759 jobs.

CLOSINGS, LAY-OFFS, DOWNSIZING

There were 19 companies which closed in 2008, and this resulted in the announced loss of 1,995 jobs. Highlights are listed below, with more detail contained in the County Section. In addition, the end of 2008 saw 12 additional closing announcements to take place in 2009. These future closings are identified in the 2009 Announcement section, but what may make this significant is that this level of closing activity is higher than it was a year ago at this time.

  • Adams County:1 closing affecting 67 jobs.
  • Allen County:6 closings affecting 593 jobs.
  • DeKalb County:1 closing affecting 197 jobs.
  • Grant County:2 closings affecting 30+ jobs.
  • Huntington County:2 closings affecting 449 jobs.
  • LaGrange County:2 closings affecting 205 jobs.
  • Noble County:2 closings affecting 193 jobs.
  • Steuben County:2 closing affecting 143 jobs.
  • Wabash County:1 closing affecting 118 jobs.

In addition, there were 17 downsizing events, which resulted in a loss of at least 1,221 jobs in 2008. Four of these events were related to Fleetwood/Gold Shield in Adams County. Announcements regarding different divisions of Fleetwood resulted in this being recorded as 4 different downsizings. Finally, there were 8 lay-offs announced, which we are interpreting as being of temporary nature. These 8 lay-offs affected 526 jobs. Two of these lay-off announcements were at Alcoa in DeKalb County.

This is a total of 44 job-loss events, a total of 3,742 jobs. These were all in manufacturing or related to manufacturing with the exception of nineevents. There were an undisclosed amount of Group Dekko jobs lost, and it is unknown whether those jobs were related to management at a manufacturing entity, or manufacturing jobs themselves.The nine non-manufacturing companies involved freight and distribution (3 events, and one of those was Sirva, which later in the year announced a planned expansion at the facility, although most likely in different types of jobs), one each at a business services entity,financial services entity, a medical clinic, and a legal office, and a closing of a construction company which had been reported last year as a new company in Steuben County.

As a matter of comparison, in 2007, there were 22 closings involving at least 1,655 jobs. The loss of 700 jobs at GDX Automotive in Wabash and 300 at Kitty Hawk in Allen County were the largest closings in that year. In addition, there were 9 downsizings noted which involved 801 jobs.

NAICS OR TARGETED INDUSTRY REPORTS

Since most of the activity in 2008 was in expansions, the NAICS or targeted industry review is concentrated in that area. Of the 117 total expansions involving 3,253 jobs, the breakdown by type of these expansions can be summarized as follows:

The major events and the announced jobs in expansions in the targeted industries are:

Food Processing: Living Essentials (150); Automated Egg Producers(50).

Transportation and Logistics: Sirva (240); Wal-Mart Distribution (Grant Co) (68).

Medical Devices: C&A Tool[2] (110).

Finance and Insurance: One Resource Group (28).

Defense: Raytheon (75); Undersea (UUSI)(60).

Advanced Materials[3]: C&A Tool (110); General Products(61); Vestil (50).

The Finance and Insurance targeted industry may need some further investigation. Currently, all banks are included in the category.

Targeted Industry expansion can be summarized in the following table:

Events / % of Total Expansion Events / Jobs / % of Total Expansion Jobs
Food Processing / 11 / 9.6% / 260 / 8.1%
Transportation/Warehousing/Log / 8 / 7.0% / 330 / 10.2%
Medical Devices / 7 / 6.1% / 188 / 5.8%
Finance & Insurance / 5 / 4.4% / 53 / 1.6%
Defense / 3 / 2.6% / 140 / 4.3%
Adv Materials / 11 / 9.6% / 311 / 9.6%

Although motor vehicles (NAICS 3362 and 3363) are not a targeted industry, it is still a major force in northeast Indiana. International Truck and Engine increased their staff in Allen County in 2008 (after a 2007 lay-off) and is included in the motor vehicle category. Dexter Axle is closing facilities in North Manchester (2009) and Elkhart, and moving 114 of those jobs to Noble County, and this is included as a 2008 event since there will be some adjustments needed at the Noble County facility. Millennium Industries in Noble County also announced a large expansion (170 jobs). Millennium manufactures fuel systems which it sells to General Motors.

As mentioned on page 6, there were a relatively large number of hospital physical plant expansions. There were nine hospital expansions in 2008.

New Companies and Targeted Industries: There were a total of 15 new companies, and five of these or one-third were in northeast Indiana’s targeted industries.

Events / Jobs
Food Processing / 0 / 0
Transportation/Warehousing/Log / 1 / 15
Medical Devices / 2 / 22 plus an unknown
Finance & Insurance / 2 / 11
Defense / 0 / 0
Advanced Materials / 0 / 0

2009 ANNOUNCEMENTS

As shown in the table below, there have been a number of announcements in late 2008 which affect the business community in 2009. Although we did not track date of announcements in 2007, we believe this represents more closings than are typically announced late in the year.

On pages 3 and 4 of this year, two graphs are included to demonstrate that increased announcement of jobs lost and negative events, i.e. closings, lay-offs, and downsizing, have occurred in the later part of 2008, and that the number of these events in the first quarter of 2009 are greater than in 2008.

ANNOUNCED CLOSINGS / People/Jobs / Company / NAICS[i]
Allen / 01-Mar-09 / 50 / Quadrant / 3261
Allen / 31-May-09 / 93 / Taylor University / 6113
Huntington / 30-Jan-09 / 186 / Meridian Automotive Systems / 3362
LaGrange / 01-Jan-09 / 244 / Starcraft RV Inc / 3362
LaGrange / 01-Sep-09 / 140 / Multi-Plex / 3321
Noble / 01-Feb-09 / 72 / Vibracoustic North America (Freudenberg-Nok) / 3363
Noble / 09-Mar-09 / 281 / Dalton Corp / 3315
Steuben / 01-Aug-09 / 114 / Rittal Electromate / 3351
Steuben
Wabash / 02-Feb-09 / 164 / Dexter Axle / 3363
Whitley / 31-Mar-09 / 23 / Cuno Water Treatment / 3333
Whitley / 01-Sep-09 / 78 / Mahle Clevite / 4231
Whitley / 01-Nov-09 / 380 / Autoliv North America / 3363
1,825 jobs
ANNOUNCED DOWNSIZING
Huntington / 01-Jan-09 / 12 / Pathfinder Services Inc / 8133
ANNOUNCED ACQUISITIONS
Allen / 30-Jun-09 / NK / Centennial Wireless / 5416
Noble / 01-Mar-09 / NK / Charter Bank / 5221
ANNOUNCED EXPANSIONS
Allen / 01-Feb-09 / 96 / AccuGear Inc. / 3363
Allen / 01-Mar-09 / 10 / Quadrant / 3261
DeKalb / 01-Apr-09 / 0 / Paintball Plex / 4239
Steuben / 20-Feb-09 / 9 / Professional Fabricators, Inc. / 3323
Whitley / 31-Dec-09 / 15 / Cardinal Grain Systems / 3331
130 jobs

COUNTY SPECIFIC REPORTS