Professor Sherry Jarrell Comments on Delay of Timco’s New Plant Opening

1.28.2011 Article, Faculty News, General

Complications delay Timco’s launch of Davidson plant
Reposted from The Triad Business Journal | by Katie Arcieri , Staff writer

Timco Aviation Services’ plans to open a new aircraft seat facility in Davidson County have been delayed because it took longer than expected to negotiate business terms on the 120,000-square-foot building in Wallburg and complete necessary paperwork for economic incentives.

The Greensboro-based aviation maintenance firm expected to begin production at a former Tyco facility at 5568 Gumtree Road in northeast Davidson County by the first quarter. Timco, one of the largest employers in the Triad with about 1,800 workers, plans to add 500 full-time jobs at the new operation over a seven-year period with help from state and local incentives.

The company has been negotiating a real estate contract that will be assigned to the county and town of Wallburg, which together have committed $1.5 million toward the purchase price of the facility. Under the deal, Timco will lease the building from Davidson County and the town for $75,000 annually over 20 years and essentially pay back $1.5 million over two decades.

“The negotiations had to go from us to the county, the county back to us, then to Tyco to tie up the loop,” said Timco CEO Kevin Carter. “I think having the third party involved has made it a little more challenging.”

Other pieces of the deal have yet to be finalized.

Davidson County Attorney Chuck Frye said the county has not completed final paperwork on the deal to purchase the old Tyco building. Carter said he now expects Timco to close on the building for an undisclosed price in the coming weeks and start production at the facility by June.

Despite delays, Timco has already hired more than 50 workers to help produce aircraft seats for customers, including Malaysia Air. Carter said those jobs will move from Greensboro to the Davidson County facility once the building is up and running.

Sherry Jarrell, professor of finance and economics at Wake Forest University, said the local government’s involvement has slowed a deal that otherwise would be closed.

“If none of them was involved in this, it would have been done by now,” she said. “It’s all tied up in controversial economic development incentives. They are having to jump through these hoops to get this gift.”