FREMONT -- In a reversal of past national trends, a company in Fremont that makes automotive and industrial batteries has purchased the assets of a factory in Mexico with the intention of moving the operation's production to Ohio.
Crown Battery Manufacturing Co. said its purchase of a division of C&D Technologies Inc., will add $40 million in sales to Crown and create 20 to 30 jobs at the Fremont facility.
Hal Hawk, president and chief executive of Crown, said the company is seeking financial assistance from the state of Ohio to move equipment from the plant in Reynosa, Mexico, which is on the Texas border. It hopes to have the work shifted in three to six months.
"We will move everything back to Ohio," Mr. Hawk said. "It's kind of unusual in these days for that to happen, but we found that our people in Fremont can actually do a better battery than people working for $1.81 an hour in Mexico."
Crown, with annual revenues of $135 million, makes replacement batteries used in autos, trucks, boats, golf carts, and other vehicles. It also makes industrial batteries used for forklifts, mining vehicles, and railroad cars.
The sale price for the Mexico plant was not disclosed.
The reason for moving jobs back to Ohio, he explained, is "the Mexican model no longer works."
There is a huge savings in wages -- it's $1.81 an hour in Mexico and $11 an hour at Crown. In Fremont, the wage could rise to $16 an hour with experience.
"But what's happened is [Reynosa's] turnover rate is high, their quality is poor, and the transportation costs with the high price of gas now make their overall costs go through the roof," Mr. Hawk said.
Economist Jim Coons, of J.W. Coons Advisors LLC in Columbus, said the Crown situation is taking on more notice nationally.
"It is a perfect example of why wage rate alone is no longer the whole story when it comes to business," he said. "You have to look at adjusted productivity. That $1.50 an hour or $5 an hour wage is not necessarily such a bargain when you factor in currency, productivity, and transportation."
Fuel costs, Mr. Coons added, have become an increasingly important factor. "In many cases, they are a tipping point," he added.
Crown Battery employs 300 workers in Sandusky County and 105 at sites in four other states and Canada.
The battery company is owned by a group of 10 officials who bought it in 1998 from its longtime owners, the William Koenig family.
The seller of the Mexican operations, C&D Technologies, of Blue Bell, Pa., makes control systems and backup power gear for telecommunications, utilities, and solar power units. Its battery division no longer fit with the company's core manufacturing.
The transaction also includes a five-year deal with Crown to market three of the Fremont firm's battery lines and Crown will supply C&D with warranty coverage for certain batteries.
Under terms, Crown will get three distribution warehouses in Los Angeles, Buffalo, and Toronto, Canada.
Mr. Hawk said that at 170,000 square feet, the Fremont plant has room to accommodate new work and equipment. The company added 11 workers in anticipation of the work moving north. Plus, a supplier to the Crown plant has indicated it will add 12 jobs, he added.
"We have capacity, but it all depends on how fast we can move things up here," the CEO said.
Crown Battery Manufacturing Co. said its purchase of a division of C&D Technologies Inc., will add $40 million in sales to Crown and create 20 to 30 jobs at the Fremont facility.
Hal Hawk, president and chief executive of Crown, said the company is seeking financial assistance from the state of Ohio to move equipment from the plant in Reynosa, Mexico, which is on the Texas border. It hopes to have the work shifted in three to six months.
"We will move everything back to Ohio," Mr. Hawk said. "It's kind of unusual in these days for that to happen, but we found that our people in Fremont can actually do a better battery than people working for $1.81 an hour in Mexico."
Crown, with annual revenues of $135 million, makes replacement batteries used in autos, trucks, boats, golf carts, and other vehicles. It also makes industrial batteries used for forklifts, mining vehicles, and railroad cars.
The sale price for the Mexico plant was not disclosed.
The reason for moving jobs back to Ohio, he explained, is "the Mexican model no longer works."
There is a huge savings in wages -- it's $1.81 an hour in Mexico and $11 an hour at Crown. In Fremont, the wage could rise to $16 an hour with experience.
"But what's happened is [Reynosa's] turnover rate is high, their quality is poor, and the transportation costs with the high price of gas now make their overall costs go through the roof," Mr. Hawk said.
Economist Jim Coons, of J.W. Coons Advisors LLC in Columbus, said the Crown situation is taking on more notice nationally.
"It is a perfect example of why wage rate alone is no longer the whole story when it comes to business," he said. "You have to look at adjusted productivity. That $1.50 an hour or $5 an hour wage is not necessarily such a bargain when you factor in currency, productivity, and transportation."
Fuel costs, Mr. Coons added, have become an increasingly important factor. "In many cases, they are a tipping point," he added.
Crown Battery employs 300 workers in Sandusky County and 105 at sites in four other states and Canada.
The battery company is owned by a group of 10 officials who bought it in 1998 from its longtime owners, the William Koenig family.
The seller of the Mexican operations, C&D Technologies, of Blue Bell, Pa., makes control systems and backup power gear for telecommunications, utilities, and solar power units. Its battery division no longer fit with the company's core manufacturing.
The transaction also includes a five-year deal with Crown to market three of the Fremont firm's battery lines and Crown will supply C&D with warranty coverage for certain batteries.
Under terms, Crown will get three distribution warehouses in Los Angeles, Buffalo, and Toronto, Canada.
Mr. Hawk said that at 170,000 square feet, the Fremont plant has room to accommodate new work and equipment. The company added 11 workers in anticipation of the work moving north. Plus, a supplier to the Crown plant has indicated it will add 12 jobs, he added.
"We have capacity, but it all depends on how fast we can move things up here," the CEO said.
