In 2007, organic prepared food producer Really Cool Foods announced that it would be building a multi-plant production complex in Cambridge City, Indiana and investing over $100 million in the area. The announcement was met with great joy and significant incentives from state and local governments:
The Indiana Economic Development Corp. offered Really Cool Foods up to $3.05 million in performance-based tax credits, up to $165,000 in training grants and will provide Cambridge City officials with a $200,000 grant to assist in off-site infrastructure improvements needed for the project. Wayne County officials offered the company 50 acres of land, $165,000 in grants and a 10-year property tax abatement.
The facility opened in October of 2008 with 250 of the projected 1,000 jobs to start, and over the last few years the company has had numerous challenges reaching initially estimated milestones of investment and jobs created.
Today, the company told workers who showed up for their morning shift that the facility was closing, and in a press release sent after 9 AM, announced the company is shutting down.
A couple of initial thoughts and questions about this unfortunate announcement:
First, if the reports are true, what a crummy way to treat your employees. Even if there had been layoffs in recent years and even if the economy is bad, short of natural disaster I don't think there's ever a good reason to have an entire workforce find out about the end of the company when they show up for work that day. (Not to mention the timing of right when the weather turns really cold, right before the holidays, etc.) Yes, it's harder and maybe even risky to share the news in advance, but I think employees deserve the respect of being a part of that conversation well before the rest of the world knows.
Second, I'm sure there might be a lot of finger pointing going on around this announcement, but it really is important to investigate why a company so well received in our area and so generously supported by taxpayer dollars has to close after only three years in operation. Yes, the economy is bad, but it was bad three years ago too. Is this a case of bad planning, excessive optimism and hype, poor management, problems with the location...what caused this, and how can we stop it from happening again (especially on the taxpayer dime)?
Speaking of the taxpayer-funded incentives, the local Economic Development Corporation likes to talk about the role of clawback terms in their offers to businesses wanting to locate here. Does such a clause allowing us to recoup these subsidizations exist in this case, and are they "on it" when it comes to being a registered creditor for any sale of assets or bankruptcy proceedings? What percent of lost revenue and outright grants does Wayne County and the state of Indiana stand to get back? What will we do differently next time in vetting a potential recipient?
Lastly, Really Cool Foods has often been cited in our region as a success story of the conventional model of economic development, using taxpayer dollars to sell the area to large employers in hopes of landing significant long-term investment in the community. More and more, the evidence points to this as an outdated and unsustainable model, and when the success stories turn into nightmares, we have to pay attention to that. I personally hope we turn toward job creation at a more human scale, but whatever we do, we need a model that's sustainable when you look at the big picture - global economic trends, fuel costs, climate change, etc. - and not just what makes for a good headline over one, three or five years.
My heart goes out to everyone involved with Really Cool Foods - especially the workers and their families but even the people who worked hard to bring them here in the first place and the management who had to wrestle with a foundering enterprise along the way.
But one way to honor their pain and misfortune is to make sure it's not repeated in the future, and that we find ways to be better stewards of the people and resources in our region.