100 Jobs Expected with Kenworth Plant Expansion

Tammy EallonardoRecent News

Chillicothe Gazette – Chris Balusik and Jona Ison, October 11, 2018

With a new build cell expected to begin production in the first half of next year, Kenworth is looking to the next step in its growth with the creation of a new truck cab painting facility that would bring with it about 100 full-time equivalent jobs by the end of 2021.

Tammy Eallonardo, economic development director for Greater Chillicothe & Ross County Development, appeared before the Green Township Trustees Wednesday with a tax abatement request for what she referred to only as “Project Shift.” While she would not identify the company by name during the meeting nor in a follow-up interview with the Gazette Thursday morning, paperwork associated with the abatement request obtained by the Gazette identifies the request as coming from Kenworth and is signed by plant manager Rod Spencer and plant controller Barb Carter.

Eallonardo told the trustees that the project would involve $29 million in new capital investment. That would follow up on the estimated $33 million capital investment Kenworth has been putting into its new build cell and another $30 million in investment made during 2017. The paperwork lists the total project cost at $139.7 million, with $102.3 million in machinery and equipment and $37.4 million in additions and new construction.

The 100 full-time equivalent positions, which the paperwork indicates would be added by Dec. 31, 2021, depending on business conditions and required staffing levels to support those conditions, would add about $6.6 million in new payroll.
Currently, Kenworth employs 2,244 full-time equivalent employees with an annual payroll of about $155.4 million.

The company is requesting a 60 percent property tax break for 10 years on the increase in assessed value of Kenworth property as the result of the new project. Eallonardo told the trustees that a similar tax break that had been approved for the company in 2006 would expire at the end of this year.

The Green Township Trustees unanimously approved the abatement request Wednesday, and it is expected to go before the Ross County Commissioners Monday. The application also will be brought to the attention of the boards of the Zane Trace Local Schools and Pickaway-Ross Career & Technology Center.
The expansion fits with positive forecasts for both Paccar, Inc., Kenworth’s parent company, and the trucking industry as a whole. During its second-quarter earnings call in July, Paccar CEO Ron Armstrong said a strengthening economy was driving more freight tonnage and, by extension, the need for shippers to expand their truck fleets. He also spoke to significant reinvestment in the company’s future and the potential for job increases.
At the time, Spencer talked about the new build cell that will be used to create two of the plant’s existing and more popular truck cab models, the T680 and the T880. The line, which will utilize technology more advanced than a similar build cell installed in 2011 that is becoming obsolete, will automate a more substantial portion of the build process. The result, Spencer said, will be a higher quality product and an increase in the production capacity of the plant, as well as more opportunities for the company.

A groundbreaking announcement for the new project is expected once the county commissioners have acted on the abatement request. According to the paperwork, work on the project would begin in November and wrap up in March of 2021 if the abatement gets final approval.

Positive growth expectations
In other development news, Eallonardo said there is a lot of ongoing activity presently in local economic development circles. During a meeting this week of partner investors with Greater Chillicothe & Ross County Development, she said, “almost everyone in the room said business is good, everyone is hiring, wages are on the rise.”

“We heard a story of one manufacturer that just gave everyone a $2 (per hour) increase across the board because (finding) labor is a big issue right now,” Eallonardo said. “Many of our local businesses are discussing expansion projects, so it’s a great time to be in Ross County now.”

The demand for labor is becoming evident not only in manufacturing but in retail and service sectors as evidenced by the number of “Now Hiring” signs appearing on businesses across the city. Some are advertising hourly pay rates on their signs while others list a signing bonus. Staff Source, Inc., a local company that helps other firms meet human resources and staffing needs, has indicated demand for employees is on the rise, with Eallonardo saying the firm is reporting more than 100 job openings it is presently trying to find people to fill.

Eallonardo said a project is also underway to bolster manufacturing interest in Ross County. “We have contracted with Hamman Consulting, a professional site selection firm, to assess areas for future industrial development outside of our Gateway Interchange Industrial Park,” she said. “Their report will focus on utility assessment for eight sites, as well as the estimated cost of additional utility build-out on the top five sites. This will increase our industrial industry and make us more marketable.”

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