GOSHEN — The economy is to blame.
A pair of companies that received tax incentives from the city of Goshen have created fewer jobs than projected, but some local leaders believe the unexpected failure to meet goals was out of the businesses’ hands.
The Goshen City Council was briefed Tuesday evening, June 17, on the efforts of Wieland Designs Inc. and Supreme Indiana Operations to add new full-time positions and make investments in real estate and equipment in exchange for property tax phase-ins. The two companies were found out of compliance with requirements set by their tax incentive agreements, but members of the city council decided that the circumstances were beyond each company’s control.
WIELAND DESIGNS INC., 901 E. Madison St.
Wieland Designs had a target of adding 100 new jobs between Sept. 22, 2011, and Dec. 31, 2014. The company designs and manufactures commercial furniture and seats for the automotive and aviation industries.
When the company applied for a tax phase-in request in 2011, it had 146 employees and by the end of 2013, Wieland had 183 employees, according CFO James R. Evans. As of Tuesday, the company reported having 213 workers, including 31 people through temp services.
“These people have the potential to become permanent employees as they complete training and orientation programs,” Evans wrote in a letter to the city council. “It is still possible we may reach our projected increase in employment to 246 by the end of 2014. However, we find that our gains in employment result from those looking to change jobs rather than from the ranks of the unemployed. Employee turnover also makes net gains more difficult to achieve.”
Goshen Chamber of Commerce president David Daugherty said Wieland has made a good effort to hire more employees. The company sent recruiters to job fairs and worked with several organizations to round up new employees, including Catholic Charities in Fort Wayne, WorkOne in Elkhart and St. Joseph counties and the Indiana Department of Workforce Development.
Wieland plans to kickstart an internal training program that allows people with sewing skills to learn on the job and become a “production-ready industrial sewer,” according to Evans. He also noted that the company has created an evening shift for part-time workers in an effort to hire more people.
“I can’t promise we’re going to get there, but we’ve got a shot and we’re still hiring,” he said.
SUPREME INDIANA OPERATIONS, 2581 E. Kercher Road
Supreme Indiana Operations CFO Matthew Long told the city council that business has not been as robust as former CEO Kim Korth had expected when the commercial vehicle manufacturer made a commitment to add 350 full-time positions by 2015 in exchange for tax incentives from the city, county and state. Internal restructuring and increased competition in the industry have also contributed to the failure to comply, Long noted.
The company had 630 employees when it applied for the tax phase-in, and at the end of February, it had 633 workers.
However, Long pointed out that Supreme has invested $10.4 million in machinery and real estate improvements at its Goshen headquarters, which exceeded the original commitment of $7.7 million. As of June 4, the company had benefited by $8,971 from the tax abatement, he said.
“In spite of the investment, our Indiana sales have instead fallen almost 20 percent from the 2011 level,” Long added. “Despite the decrease, we have been able to maintain our headcount of 630 and increased our payroll by $3.5 million.”
City council members debated whether Supreme’s investments outweighed its failure to create more jobs.
“Part of the bargain was not only their investment but also jobs,” councilwoman Julia Gautsche said. “They are so far off on the jobs, and I think it’s very likely they’re never going to get up to those 350 jobs and that was part of what gave them that seven-year tax phase-in, and I think a contract is a contract.”
Daugherty expressed optimism about Supreme’s future, explaining that he had met with the company’s leaders and was encouraged to hear their long-term business goals, which include rolling out new products and making strides toward efficiency.
Follow Elkhart Truth reporter Angelle Barbazon on Twitter at @tweetangelle.