CONWAY -- The Canadian company that bought a Conway bus-parts plant with the enticement of millions of dollars in state and local incentives does not plan to hire new employees immediately but intends to increase the business over a few years.
DBG closed a deal to buy the former IC Corp. plant on Dave Ward Drive after the City Council expressed its intention to offer $5.2 million in industrial revenue bonds aimed at reducing the Canadian company's property taxes and after the state offered additional monetary incentives.
In an email interview Wednesday night, Bob LaFrance, an executive vice president of DBG Canada Ltd., said the company at first will continue to supply IC Bus Co. in Tulsa "and work to get the [Conway] facility ready for growth in the future."
"We do not see adding volume of people to the facility at this time although there will be additional positions added as required since some of the current positions in the facility were managed corporately by Navistar" in Illinois, LaFrance said.
"The plan is [to] double the business over the next [five] years, and we are planning that a significant portion of this growth will come from other customers," LaFrance added.
In the short term, LaFrance said DBG expects to see a seasonal slowdown in the bus-parts business market until the new year.
"Up until then we are hoping to see some growth in incremental volume from new parts for bus and other parts from Navistar's other facilities," LaFrance said. "We are also going to look at moving some work from our Canadian facilities, if possible."
LaFrance declined to say what DBG paid for the Conway plant. The sale closed Wednesday.
For now, he said, the plan is to refurbish and invest in the facility so as to keep the existing customer base and to attract others in the South.
"We serve ... most of the Medium Duty and Heavy Truck Companies (as an example) in one capacity or another, and in some cases, our lack of a footprint in the USA has prevented us from reaching some of our growth goals," LaFrance said. "We are confident that by adding Conway and developing a facility that the Associates and the Community can be proud of, we will see significant growth."
Previously, DBG had operations only in Canada and Mexico. The Conway plant will serve as its U.S. headquarters.
Peter Chapman, a former IC Corp. employee who lives in Conway and is general manager of DBG Conway, said Wednesday that DBG's growth plans would create "significant employment opportunities that are less reliant on the seasonality of the bus market."
LaFrance did not immediately reply to a follow-up email asking if he had any estimates on how many jobs might eventually be added.
Brad Lacy, president and chief executive officer of the Conway Area Chamber of Commerce and the Conway Development Corp., said Thursday that he wasn't surprised that any company would "be very careful with what they say and what they promise" at this stage.
"But when you read into their comments about how they plan on doubling the business over the next [five years] ... you're going to make some assumption that there's significant head count increases with that," Lacy said. "I wouldn't expect them to hire a bunch of people right off the bat.
"The status quo [will likely prevail] for a period of time," Lacy said.
"I believe and I know they are buying this facility for growth," he added. "The facility has always been a factory that only makes parts for the bus business. ... [But they] plan to diversify and add more clients."
"I think that there is growth out there on the horizon," Lacy said.
Conway Mayor Bart Castleberry offered a similar view.
"They retained all the current employees," he said. "They are going to aggressively grow their business. ... They will be adding new employees," just not immediately.
A state incentive package for the company includes up to $650,000 from the quick action closing fund, Arkansas Economic Development Commission spokesman Jeff Moore has said.
Commission spokesman Lisa Cogbill said those funds must be used for permanent improvements of the facility.
DBG also has qualified for two years of what the state calls "create rebate" benefits, Moore said.
"To qualify, the company must create a minimum of $2 million annually in new payroll," Moore said in an email. "The minimum payroll must be met within 24 months of the effective date of the financial incentive agreement. No benefits may be claimed until the $2 million annual payroll threshold is met."
The benefits are available after verification that the business has met minimum payroll requirements. The percentage of the benefits in this case will be 3.9 percent of new payroll, Moore said. The 200 employees already at the facility will count toward the minimum $2 million payroll, Cogbill said.
State Desk on 08/04/2017