Friday, February 12, 2016

Lippert buys struggling startup

Posted on Dec. 18, 2013 at 12:00 a.m. | Updated on Dec. 18, 2013 at 3:01 p.m.

Lippert Components announced it has spent $3.3 million to buy Fortress Technologies, a Middlebury recreational vehicle chassis maker that underperformed in its first year of business.

Fortress a year ago won a property tax break from Elkhart County by pledging, upon its startup, to create 266 jobs by the end of 2015 at its new operation at 14489 U.S. 20 in Middlebury. But only 15 people worked there as of Tuesday, Dec. 17, said Todd Driver, Lippert’s chief operating officer.

“Things did not pan out,” Driver said of Fortress’ plans. “They were a competitor of Lippert Components and the jobs did not (materialize). The accounts did not fall their way.”

Driver said Lippert will consolidate at the Fortress plant production of sport utility trailers and other specialty chassis products now occurring at Lippert’s Goshen and Middlebury plants. He expects to have 50 to 75 people employed at the Fortress plant by mid-2014. Because some will be moved from the existing Lippert facilities, he expects a net gain of about 30 jobs for the county.

“This gives us additional capacity,” Driver said of the 102,000-square-foot building with a state-of-the-art powder-coating paint booth. “It ensures, with the growing RV market, that we’re going to be able to maintain our position as a main supplier to the industry.”

Fortress officials a year ago said they would spend nearly $6.6 million to equip the plant, which had once housed Pilgrim International, a manufacturer of travel trailers, fifth wheels and toy haulers, that folded in 2008 in the depths of the recession. County administrator Tom Byers said it was likely too soon for Fortress to have received an abatement of real property taxes, but the company had filed a report stating it had $753,000 worth of equipment eligible for personal property tax abatement. Under current tax rates, that would result in tax savings of about $16,100 so far, Byers said.

The tax abatement agreement requires Fortress to pay back any such savings if it ceases operations during the phase-in’s seven-year span. Whether the county will seek to recoup the money will be up to county council members, but Byers said he would not recommend it, since the business will still be operating under the Lippert flag. Byers said he wasn’t sure how the county will address the situation because it’s the first time a tax abatement recipient has been acquired by another company.

Byers said he believed Lippert could assume the abatement if it pledges to abide by its terms, including creating 266 jobs. Driver said he did not yet know how Lippert will handle the matter.

Jim Bergan Jr., one of several Fortress co-founders, was listed as company president in the abatement application. A Truth reporter was unable Tuesday to reach him by a cell phone number or email address that he had listed on the county application.