Small Town Home for International Business

SMALL-TOWN HOME FOR INTERNATIONAL BUSINESS

BY MELISSA DICKSON JACKSON

Coweta hosts business and industry from around the globe

For a community with a small-town ethos, Coweta County hosts several international industries that employ thousands of residents.

In fact, nearly 33% of Coweta’s manufacturing employees work for international companies.

From Japan to Germany, and Ireland to Switzerland, international business in Coweta thrives because of several factors: convenient access to an interstate, an easily accessible international airport, an international port only hours away in Savannah, an available workforce, and favorable local economic circumstances including affordable real estate and competitive incentives like Georgia’s 5.75% corporate tax rate for income earned in Georgia. If you’ve ever driven down Bullsboro at 4:30 in the afternoon wondering who all those people were and where they work, Coweta’s many international industries may be one answer.

The Georgia Department of Economic Development reports that Georgia is in “one of the fastest-growing and most populous regions” in the U.S. and that companies “can reach 80% of the U.S. market within a two-hour flight or a two-day truck drive.”

Georgia also offers tax exemptions for sales and use taxes on many expenditures made by manufacturers. These include machinery and equipment, repair and replacement parts, molds, tooling, raw materials, packaging, supplies, and energy “integral to the manufacturing process.”

For Newnan, the presence of international business has had a symbiotic relationship. The community has grown and benefited from the ideas and influence of these international members. At the Central Educational Center, the Georgia Consortium for Advanced Technical Training (GA CATT) models the German Apprenticeship program because of partnerships between executives at E.G.O. North America and Grenzebach, with a steering committee that included local and state representatives who worked together to respond to the needs of industry with innovative educational solutions that allow students to graduate with a high school diploma, a college certificate “stackable towards an associate’s degree,” and an “apprenticeship certificate backed by the Association of German Chambers of Commerce” (Coweta County Development Authority).

Greg Wright, former president of the Coweta County Development Authority, explains, “International companies have played an important role in the economic success of Coweta County. In addition to providing good-paying jobs, these companies are actively engaged in helping make Coweta County better. A great example of this commitment is the vision and determination to start the work of the Georgia Consortium for Advanced Technical Training. It was two of our international companies – Grenzebach and E. G. O. North America – that teamed up to help get the program started and to help make it a model for other communities in Georgia.”

In a similar effort, TenCate, a protective fabrics company founded in the Netherlands, partnered with Quick Start, “the state’s No. 1-ranked workforce training program” to provide “customized training for TenCate to support a $5 million investment in new technology” (Newnan CEO).

David Keller, CEO of E.G.O. North America, says that the challenges of running a facility for an international company are not so different than running a company based in the US. “The tariff situation,” he points out, caused the company to “reorganize [its] entire supply chain structure,” but domestic industries importing supplies face that challenge as well. He doesn’t anticipate any significant impact from the impending Brexit upheaval except that it may result in a stronger dollar, something he’s not concerned about since it can only benefit American facilities.

David Keller, CEO of E.G.O. North America

The main problem Keller confronts is a lack of skilled and willing employees.

“I read somewhere that baby boomers are retiring at a rate of 10,000 a day,” he exclaims “and millennials don’t want to drive forklifts.” They don’t realize that “a good machinist can make more than a schoolteacher.”

While it’s true that 10,000 people reach retirement age each day, the Chicago Tribune reports that “an April 2018 Gallup poll showed 41 percent expect to be working beyond age 65 — a huge jump since Gallup started tracking in 1995, when it averaged 13.5 percent.”

Nonetheless, an aging workforce without clear successors troubles many industry leaders across the production spectrum, international and domestic. In anticipation of the worker shortage, Keller has been instrumental in creating attractive educational alternatives for students interested in a more pragmatic approach to their careers.

Keller encourages other industries to work directly with the Coweta school system and with the Central Educational Center to develop certificate programs that help generate a ready workforce.

As a result of increasing human capital expenses and decreasing availability, Keller has also ushered E.G.O. North America toward automation. Production hasn’t decreased, and E.G.O. remains the leading supplier of its primary North American product (radiant heat elements used in smooth-surface stovetops), but the work force required today is 30% smaller than it was a few years ago. At peak employment, E.G.O. employed 260 skilled laborers. Today the same workload is carried by 190 employees supported by automated systems. Keller anticipates that more companies will seek to resolve the worker shortage through automation, if they want to stay viable in the marketplace.

At Grenzebach, a German-based manufacturer of high-tech equipment for the glass and solar panel industry, automation rules the day, too. In a showroom festooned with Octoberfest-themed vinyl banners and faux-evergreen wreaths suspended from the ceiling, an imposing innovation gleams luminous and ready. Grenzenbach sales manager for advanced manufacturing, Jason Lammers, says it can do the work of two employees in a fraction of the time and without breakage or product loss.

The machine, called TASS (Tin Air Speed Stacker), moves large plates of glass via a system of suction and hydraulics. Before this innovation, “two men in suits of armor” would have done the work, says Lammers with a twinkle in his eye. Breakage was a common problem, and injury was always a risk. TASS represents a one-million-dollar investment for the companies that order one from Grenzebach, but in the final analysis, customers are happy to make the upgrade. It saves them time and money in the long run.

TASS (TIN AIR SPEED STACKER) MOVES LARGE PLATES OF GLASS VIA A SYSTEM OF SUCTION AND HYDRAULICS AS GRENZENBACH.

At Canadian-founded WinPak Films in Senoia, employee satisfaction and work culture take the lead in solving the labor issue. The company currently employs 300 people in the production of plastic film and packaging for the food and medical industry. “Automation only goes so far,” says Mike Cruise, Winpak HR manager. Employee retention and creating an attractive work culture have helped Winpak improve employee satisfaction year after year since the initiative began. Cruise says that they’ve structured wage increases and made that information available to employees, so that they have a clear understanding of future opportunities.

Winpak also offers a competitive benefits package that encourages employee loyalty. Cruise agrees with other international executives that having a Canadian origin and corporate hierarchy has little impact on the day-to-day enterprise of running a production facility in Coweta.

AT WINPAK FILMS IN SENOIA EMPLOYEE SATISFACTION AND WORK CULTURE TAKE THE LEAD.

Of course, Coweta also has industries that originated domestically but ship products globally. Burl Finkelstein, executive Vice President and General Counsel of Kason Industries, has worked in Coweta since 1979 when he oversaw the construction of the plant. Founded in 1926, Kason produces hardware for refrigeration, foodservice, step van, and industrial equipment that they export worldwide. They design, build, and deliver “the world’s most dependable lines of commercial hardware and accessories.” Finkelstein says the company picked Coweta because the business environment was more favorable than New York, and it was “just off the interstate near a large airport and a good workforce.” Kason started with 35 employees in 1979 and now employs 285 people.

Finkelstein once thought he’d come to Coweta to establish the facility and then leave. That was 40 years ago. “I can’t think of another place I would want to live,” he says.

It seems that Finkelstein’s sentiments are widely shared by many of the companies and employees who call Coweta home. Corvaglia Closures opened a 100,000 square foot facility in February of this year. The company makes one-piece polyethylene terephthalate (PET) caps for use on bottled beverages like sports drinks, sodas, and water. By relying on automation and robotics, Corvaglia produces its product with only 12 employees, though they hope to expand to 30 over the next two to three years. J.B. Fisher, President of Corvaglia USA, says the company maintains a competitive edge because their product is fully recyclable, unlike many of the bottle caps available in the industry today. Fisher says that the company’s decision to open a facility in Coweta has worked out “very nicely from a labor perspective and for other strategic reasons.”

It’s worked out nicely for the Coweta County tax base, too. The Coweta County Development Authority helps to attract and manage domestic and international industry to Coweta. Trae Westmoreland, president of the Authority, explains that despite the many tax incentives available to companies, the property taxes paid by industries still represent a significant portion of the tax base. Two international companies opened shop in Coweta last year, paying $328 thousand in property taxes. Westmoreland says it would take 137 homes on over 220 acres of land to equal the same tax revenue. “Any [home] under 375k doesn’t satisfy the cost of services” like roads, fire and rescue, and police. “We need more industry to satisfy the tax digest,” Westmoreland concedes.

In addition to the revenue generated by taxes, Coweta’s international industries employ approximately 2,600 people (according to figures on the CCDA website and interviews). The average manufacturing wage, says Westmoreland, is “over $23 an hour,” as opposed to an average wage of $19.90 an hour for all employees county-wide including skilled and unskilled services from retail to legal and medical. “Manufacturing is bringing our wages up,” says Westmoreland. The potential wages earned because of Coweta’s international industries could be in the neighborhood of $1.2 million per year with an average annual income of$46,000 per industrial employee. While not all those employees live in Coweta, the net effect of Coweta’s international presence, is nothing short of a win-win for homeowners, business owners, and community leaders.

Unlike other metro-area counties, Coweta isn’t out of room for more facilities. Westmoreland says the county has thousands and thousands of acres ready and available for the next industry proposal. With the county’s commitment to educating the next generation of skilled labor, Coweta is set to be a destination for international industry for decades to come.