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HomeMy WebLinkAbout11-15-04 Community & Economic Development Community and Economic Development Committee 2004 South Bend Common Council The November 15, 2004 meeting of the Community and Economic Development Committee was called to order by its Chairperson, Council Member Roland Kelly at 4:00 p.m. in the Council Informal Meeting Room. Persons in attendance included Council Members Kelly and Puzzello; Executive Director of Community and Economic Development Sharon Kendall, Don Inks, Director of the Division of Economic Development; John Shirrell, Robert Strzelecki, Timothy D. Hern ly, Dan Smith, Jerry Christianson,Pete Fera,Julie Tenney and Council Attorney Kathleen Cekanski-Farrand. Council Member Kelly noted that the Committee meeting has been called to review compliance with the Statement of Benefits form CF-1 with representatives from the following companies being notified that additional information is being requested: John Shirrell JRS Enterprises,LLC Robert Strzelecki Lock Joint Tube Richard Deahl Bowne of South Bend, Inc. Roberta Baxter Honeywell International Don Davis Eaton Corporation JRS Enterprises,LLC: Mr. John Shirrell of JRS Enterprises, LLC/AAA Tool and Die Company located at 3601 West McGill Street, South Bend, Indiana 46628 addressed the Committee first. He noted that par of the production line was sold off. 16 jobs were listed however now there are 17 persons working in the tool shop. When the initial report was prepared there were 9. In the production area there are now 5-6 jobs, which is the same number of jobs in 1999. One apprentice will be added in 2005 to assist the two apprentice positions. The company builds tools for the production industry. When there is not a recessional period, Mr. Shirrell stated that there may be 18-19 employees. The company has been in business for 40 years and desires to stay as competitive as possible,however they cannot control the economy. Council Member Kelly thanked Mr. Shirrell for his additional information and wished him good luck. Lock Joint Tube: Council Member Kelly then called for representatives of Lock Joint Tube to address the Committee, noting that when the company petitioned for tax abatement they indicated that ten (10)new jobs would be created. Mr. Robert Strzelecki and company attorney Timothy D. Hernly noted that as of March 2004, the new equipment had not been installed. The current number of employees is 244. It was noted that this has been a tough year with several businesses going out of business. They currently have two (2)work shifts instead of three(3). They are forecasting that the employment November 15,2004 Community and Economic Development Committee meeting of the 2005 South Bend Common Council -page 1- number should be reached some time in the near future. The Walnut Street facility has two (2) shifts and there is a decline in product. Currently they have not found the right markets. The building cost was $174,025 short of the projected cost; however it was a 50,000 square foot addition. Mr. Hernly stated that he believes more was invested, and will look into the actual amount. The facility is owned by Steel Warehouse and is then leased to Lock Joint Tube. With regard to the Ireland Road facility, the building addition is short $178,000 and they are down 13 jobs. It was noted that they have always exceeded the payroll amount projections, even when the head-count was down. Mr. Hernly stated that he would send additional information to Council Member Kelly. Council Member Kelly thanked the representatives of Lock Joint Tube for their presentation. Bowne of South Bend,Inc.: Council Member Kelly then asked representatives from Bowne of South Bend, Inc. to address the Committee. Dan Smith, Controller and Jerry Christianson, Vice-President & General Manager noted that they are 24 employees below the projected number. This is their first abatement and without the abatement their company would be seriously affected. In 2001 two (2) production lines were added and alot of temporary help was hired. 173 hours per month are considered a full-time employee equivalent. The company does financial printing for companies in New York and Chicago. They noted the following: $44 million in sales 361 IPO's&MNA's in calendar year 2000 $30 million in sales 108 IPO's&MNA's in calendar year 2003 There has been a steady decline in light of mergers and acquisitions. In May of 2003 they were told to reduce employment by 25 employees because of business being down. However there is a new President of the company in New York who decided to go back to the basics. The South Bend plant is the most profitable of the Bowne operations. They are pursuing mutual fund printing opportunities but do not believe that they will be able to hire back the 25 employees. They appreciate the tax abatement,however since 9/I1 the financial markets have not recovered. The projections made in their documents were made in good faith. Prior to 9/11 they were a 24/7 operation. Mr. Christianson stated that when business is slow they ask an employee to take a 1/2 day off in order to make it thru these tough financial times. Council Member Kelly thanked the company representatives for the additional information. Honeywell International: Council Member Kelly then called for information from the representatives from Honeywell. Pete Fera, Chief Financial Officer and Julie Tenney, Communications Director of Honeywell Aircraft Landing System with office at 3520 Westmoor Street, South Bend, Indiana 46628 then addressed the Committee. They agreed to submit a new'CF-l. They stated that prior to 9/11 there were 886 employees, now they have 657 employees. Their company is in the aircraft November 15,2004 Community and Economic Development Committee meeting of the 2005 South Bend Common Council -page 2- manufacturing business. They reminded the Committee that after 9/11, planes stopped flying. The good news is that there has been some recovery,however their base business is down by 9%. They are now focusing on repair and overall. The overall airline industry has been brutal since 9/11. Delta is one of their biggest customers. They will look at investments noting the figures of $66.7 million vs. $51.8 million. Council Member Kelly thanked the representatives of Honeywell for their information. Eaton Corporation: Council Member Kelly then called for a presentation from EATON Corporation. Mr. Don Davis, Manager of the property tax division of Eaton Corporation with offices at 1111 then addressed the Committee. He provided a Superior Avenue, Cleveland, Ohio 44114-2584 the p one-page handout to the Committee (copy attached). He noted that on 12-31-99 they had 137 employees and met all of the local requirements. They often use temporary employees who work with full-time employees. The South Bend operation is a forge plant which makes gears a nd parts fo r th e transmission plant used i n heavy-duty trucks.s. 15/ of their business is outside other Eaton companies. anies.p In response to a question from Council Member Puzzello, Mr. Davis stated that by the end of 2000, the economy was already going south, noting that they had three (3) different lay-offs in 2000. The Eaton Corporation has made a lot of cuts and are attempting to diversify their overall operations. By the end of 2004 they should have 124 full-time employees and 10 temporary employees, noting that they do not hire part-time employees. They hire their temporary employees through temp agencies. Council Member Kelly thanked Mr. Davis for the additional information. Council Member Kelly noted that no formal action would be taken today, noting that it appeared that each of the companies were making good faith efforts to comply however each has been affected by the economy. He then adjourned the meeting at 5:04 p.m. Re llxitted, Council Member o and Kell ,Chairperson Community and Economic Development Committee KCF:kmf Attachments November 15,2004 Community and Economic Development Committee meeting of the 2005 South Bend Common Council -page 3-