HOLLAND — Haworth Inc. was recently awarded a Michigan Economic Growth Authority tax credit valued at $22,437,419 over 13 years as an incentive to move its operation in Calgary, Alberta, to West Michigan.
Haworth plans to complete the move in 2010 and create 649 new jobs over the next five years. The office furniture manufacturer expects to fill 500 of those jobs by the end of the first year.
“We put an estimate of the majority of (jobs) — 500 — by the end of 2010,” said Julie Smith, senior public relations administrator for Haworth. “The intensive hiring will be for the rest of this calendar year and into the next.”
Whether there will be a preference to hire recently laid-off employees or transfers from Calgary is up in the air.
“We put our plan in place up until the point of making that announcement and now the details get really important, and our managers on all of the areas that are going to be affected by this are going to start working on those details,” said Smith. “I do know that because of what we’re building — the walls and, of course, the wood expertise …there are some special skill sets.”
The move will take the wood and wall manufacturing from Calgary and split it between Holland and Big Rapids, with between 70 and 80 percent in Holland. Although Haworth has been producing some of those products in West Michigan, it was not at the same level as Calgary, which makes the transition more difficult.
“Transitions like this — the closing of one facility and relocating — it’s not like moving a house,” said Mike Dunlap, owner of Michael A. Dunlap & Associates, a business consulting service specializing in office furniture. “This is something that takes weeks, months. We’re also dealing with issues across an international border. It’s not something where they’re going to ship everything to Holland, Michigan, from Calgary, Alberta, overnight or in a week or two’s time.
“We have to be realistic and realize that these things take time. There are probably some issues they need to deal with the Canadian and Alberta governments, not to mention the local Calgary governments — issues that we probably have no clue about here.”
As a standard MEGA credit, Haworth will not begin to receive the benefits of the credit until it has created a minimum of 50 jobs. It must create a minimum of 600 jobs by the end of the seventh year or forfeit the remainder of the tax credit.
“(After the initial hiring), it’s going to be a gradual ramping-up process,” said Bill Kratz, business development manager for the Michigan Economic Development Corp. who worked on the Haworth/MEGA project. “A lot of it is going to be tied to the recovery in the marketplace. Office furniture has been soft, so as that market recovers, we anticipate some of that growth to be reflected in (Haworth’s) increased numbers.”
Dunlap said that while no one knows for sure what will happen with the industry, business is showing signs of improvement.
“I’m hearing a lot of very good news from many West Michigan furniture manufacturers, and that’s orders improving and business has picked up pretty significantly,” he said. “Whether or not this is going to be sustained is the question. I don’t think anybody has a crystal ball to make a definitive prediction. I will say, from a trend perspective, that it appears the industry has turned a corner and we’re looking at some solid improvement for many, if not all, of the manufacturers.”