TV plant, 500 jobs go elsewhere
WARREN – Talks under way for nine months to relocate a television assembly plant and hundreds of jobs from China to Trumbull County fell short when the company announced late last week it instead will move to South Carolina.
Plans to bring an Element Electronics assembly plant back to domestic shores came under the direction of company founder and president Mike O’Shaughnessy, a Trumbull County native and 1985 Champion High School graduate.
“I really did have an emotional attachment to make this happen in Warren,” O’Shaughnessy said by phone Tuesday afternoon. “We are doing amazing things bringing TV assembly back to the United States, and it’s unfortunate it didn’t work out for Warren.”
When talks involving officials from Warren, Vienna Township and other economic development officials to bring the plant to a vacant warehouse near the Youngstown-Warren Regional Airport did not come together fast enough, the decision was made instead to invest $7.5 million to locate the new flat-screen TV factory and some 500 jobs that pay $12.50 an hour to Winnsboro, S.C.
The plant will begin operations there by December with commitments from Walmart, among other retailers like Target and QVC, to carry the products nationwide, according to an announcement Thursday in South Carolina.
“Ultimately, it came down to just getting it done,” O’Shaughnessy said. “We communicated this to the local and state leadership in Ohio and the same to the people in South Carolina. We have a very compressed timeline. We had to be in production by the fourth quarter of this year. In the end, maybe the fact that we are working on such a short timeline was a challenge that Ohio couldn’t get done as quickly as South Carolina.”
Tony Paglia, Regional Chamber vice president for government and media affairs, said the chamber in May joined the talks that already had been underway for several months with officials on the state level. Financing talks also had been ongoing with Western Reserve Port Authority Executive Director Rose Ann DeLeon and JobsOhio, the governor’s economic development arm, DeLeon said.
“We were trying to work with the state to look for financing and ways to structure something to meet the company’s requirements,” DeLeon said. But she said the company canceled a meeting with JobsOhio and became slow to return messages.
Paglia said the company’s request for access to a free or low-cost building was slowing talks.
“They weren’t able to come up with a solution to overcome that,” Paglia said.
An approximately 230,000-square-foot, privately owned building being considered was listed for about $4 million in Vienna Township.
“The main thing that we needed was a place to go to work. That was what we were asking, for the local or state people to help us find an address and to make it available at a very low cost,” O’Shaughnessy said. “We didn’t ask for anything different anywhere we went.”
Chamber President and CEO Tom Humphries suggested creating a Joint Economic Development District, or JEDD, with a municipality like Warren that could assess income tax, Paglia said. Under the proposal, Warren would have financed purchase of the building and repaid the loan with income tax collected from employees at the site.
Vienna trustees voted May 17 to enter talks with Warren to form a JEDD, and for several months Pegg and Warren Safety-Service Director Enzo Cantalamessa negotiated with Element Electronics.
Tuesday, Vienna Trustee Phil Pegg expressed his disappointment that the deal had fallen through. Both Pegg and Paglia said many requests from Warren for financial information went unanswered by Element Electronics.
“We put our best effort into it. They weren’t forthcoming in the information needed by Warren to proceed with the project,” Pegg said. “Warren needed the financials and, from what I saw that the company provided, it was not sufficient. I don’t know any bank that would loan the money based on the information that was provided to Warren.”
“Warren needed to do some due diligence because they were taking some risks,” Paglia said. “The company provided a very broad outline, and the city pressed them for more details. Those details were not forthcoming.”
O’Shaughnessy declined to comment on that issue, saying information exchanged during negotiations is confidential.
A message seeking comment Tuesday from Warren Mayor Doug Franklin or Cantalamessa was not immediately returned.
In a prepared statement released Thursday O’Shaughnessy had credited Walmart and South Carolina Gov. Nikki Haley with making the deal possible. Haley said she went after the business after a Walmart Supplier Summit earlier in the year.
Tuesday, O’Shaughnessy assigned no blame.
“I don’t think the people in northeast Ohio ever stopped working on it. But while they were working on it, we were already closing parts of the deal in South Carolina,” O’Shaughnessy said.
Walmart U.S. president and CEO Bill Simon also commented last week on the speed at which the deal was created.
“The partnership between South Carolina and Element Electronics came together in just a few short months demonstrating that American renewal in manufacturing is working to create jobs, drive investment and produce quality American-made products for our customers. Through collaboration with Element Electronics we have facilitated discussions at the state level to make their partnership a reality,” Simon said.
Still, O’Shaughnessy said he hasn’t given up on possibilities for future local development.
“I grew up in Champion and I graduated from the Ohio State University. Frankly, my wish list includes having a business where I grew up,” O’Shaughnessy said.