Goshen News, Goshen, IN

October 25, 2012

A few failures, plenty of success for Elkhart Economic Development Corp.

Director recounts how Think, Electric Motors Co. projects led to improvements

By ROGER SCHNEIDER
THE GOSHEN NEWS

ELKHART — Learn from your mistakes.

That’s what the director of the Elkhart Economic Development Corp. said her organization has done in the wake of two iffy redevelopment projects that were undertaken during the height of the recession.

Dorinda Heiden-Guss was one of the featured speakers at the annual Elkhart Economic Development Summit. As part of her presentation on the many successes the organization has had in luring manufacturing jobs to the county, she reflected on the failures of the Think electric car company and the Electric Motors Corp., both of which received economic incentives to locate in Elkhart County. Think’s parent company, Think Global of Norway, intended to build electric cars in Elkhart. The company went bankrupt last year and the Elkhart facility has only a couple of employees, far short of the 415 expected paying $16 per hour when it received federal stimulus funds, state grants and tax credits.

Once promoted by Wil Cashen and Ralph King, Electric Motors Corp. has slipped into anonymity after closing its Wakarusa office and moving its address to Plymouth.

“I had a big boo-boo with the Think company,” Heiden-Guss told the crowd of government officials, CEOs and business leaders. “You only learn from your mistakes.”

She recounted how in February 2009 she received the Think lead from the Indiana Economic Development Corp. and then worked with the county’s communities and the company to pick a location. The deal closed on Dec. 31, 2009  when the Think CEO decided to locate in Elkhart, she said.

“We were pretty hungry at that point,” Heiden-Guss said. “I think unemployment was 18.9 percent at that time. Nothing else was happening. All the news media came in. Everyone said what are you going to do? How are you going to recover?”

The Think project was an intensive negotiation effort involving many people, Heiden-Guss said, but it ended disappointingly.

“We got them in here,” she said. “But they have not produced as many jobs as promised. But, this is just one project and we are working on many projects.”

Later in the program, businessman Jack Citadeen asked if the EDC has learned to be more diligent in vetting businesses after the experiences involving Think and Electric Motors Corp.

“When Elkhart was at its very lowest we had people who came and asked for money. They were not particularly good people,” Citadeen said. “I think some prudence in advance would have helped us. Think, probably could have been avoided. If you had done a little research on Think you would have found they had a very checkered past.”

He cited bankruptcies in particular.

Citadeen said at the time, there was a push by the Obama administration to turn to solar, wind and electric vehicle investments. Obama even visited Wakarusa to give Navistar $46 million for its electric delivery van.

“The point of the story is, we can do some homework to separate the wheat from the chaff,” Citadeen said.

He suggested the EDC use a group of local business owners to meet with and vet companies wanting to locate here.

Heiden-Guss said the EDC has learned a lot from the experiences with Think and Electric Motors Corp. and the push by governments to serve political agendas.

“I have been actually in D.C. dealing with the Department of Energy bureaucrats who were anxious to write us checks,” she said.  

She also said Gov. Mitch Daniels was also promoting the Think project because of the high unemployment in the county.

“You had a lot of people pushing this, so I think not all normal precautions were taken,” Heiden-Guss said.

Since then, the EDC is utilizing more financial experts in vetting companies, she said.

“We have instituted a much more efficient plan,” Heiden-Guss said. “We have incorporated CPAs in the process. We have broadened our reach to bring in the necessary expertise.”

Recent successes

Since the recession, the EDC has had startling good success in attracting businesses to the county, according to the director. Heiden-Guss said the agency expects to help industries add 1,900 new jobs in the county this year. Those jobs stem from more than $100 million in new investments announced this year. She also said the average wage of jobs added in the past year is $18.08 per hour.

That growth is a continuation from 2011. From March 2011 to March 2012 the county led the nation in job growth, according to Heiden-Guss.

“I think we are at 71 projects we are working,” Heiden-Guss said.

She also touted the agency’s success in retaining 600 jobs at Utilimaster. That company was looking to relocate its delivery truck assembly operation and considered a move to Michigan. Instead, the EDC helped convince the company to locate to a vacant, modern factory building in Bristol. In addition, that facility is expected to add 300 contractual jobs in the coming year, according to Heiden-Guss.