Old Town Canoe stays in Maine and expands
Maine's tax incentives for businesses make the difference
By Ramona du Houx- January 3rd, 2010
Last winter Johnson Outdoors announced it would close its manufacturing facility in Ferndale, Washington, and consolidate its plastic boat manufacturing to Old Town. In November more than 150 workers and state and company officials helped them celebrate the completed move into their new facility on Gliman Falls Avenue.
Now all Old Town canoes and kayaks will be manufactured in Old Town.
That prompted Governor John Baldacci to proclaim November 10, 2009, as Old Town Canoe Day in Maine.
“We wouldn’t be here today celebrating an exciting future without the help of Old Town and the great state of Maine,” said Johnson Outdoors Chairwoman and CEO Helen Johnson-Leopold.
Baldacci said the company’s decision to consolidate their watercraft division in Old Town, creating 48 new jobs, was the result of many hours of planning and negotiation. A combination of business incentives helped to keep the company in Old Town and prompted it to invest in new facilities, purchase new equipment, and expand its operations.
“With the world economy so competitive, we have to be firing on all cylinders to compete,” said Baldacci. “Our Pine Tree Zones are a very aggressive economic tool.”
Maine helped the company with:
• Pine Tree Zone status, which allows the company ten years of tax incentives
• A Community Block Grant of $200,000 from Maine’s Department of Economic and Community Development
• An interest-free loan from Old Town worth $694,000 to help offset the cost of the consolidation
“In the last six years, Maine has become a great place to do business,” said City Manager Peggy Daigle.
About 200 workers are employed at the Old Town facility. “The company will hire additional workers as the production process gets fully up to speed,” said Tim Magoon, director of operations at Old Town Canoe.
“The future of Old Town Canoe is right here,” said Johnson-Leopold, whose father purchased Old Town Canoe in 1974 for $1 million. “At that time the company was innovating with plastic canoes, which today Old Town Canoe proudly manufactures. Even in tough economic times, if you are innovative, you can be successful. If it wasn’t for the skill and quality craftsmanship, which Old Town has in abundance, none of this would be possible.”
That quality has branded the state positively around the world.
“Maine is recognized for its craftsmanship, honesty, productivity, and integrity. People know they can accomplish things in Maine that they can’t anywhere else,” said the governor.
The positive atmosphere during the celebrations exuded confidence. With rows of canoes and kayaks ready to be shipped and workers eagerly assembling products, the new facility was in full swing.
The products went from one stage of development to the next with precision and pride from the workers. As the boats emerged from molds, craftspeople carefully cut off the excess plastic, which is recycled.
The new facility is one floor, a big change from the old three-story building in downtown Old Town. “That alone has changed efficiency,” said Kelly Grindle, Johnson Outdoors Vice President.
“Innovation is key to our success. This new building is designed to be worker friendly, and runs on natural gas heat, cutting our energy costs in about half,” he said. “We’ve reduced the number of boat ovens needed from 13 to 8, while increasing capacity by 20 percent to produce 200,000 boats a year.”
These aren’t ovens as people imagine. They are gas-fired chambers in which aluminum boat molds filled with plastic powder are rotated evenly to create sleek hulls.
During the tour the governor suggested that the company could benefit from a relationship with the composite program at the University of Maine. Grindle said that old fiberglass techniques were too expensive, and he would look into the new composite technologies that UMaine is working on. “We know that innovation is key to our success. We are always looking at new possibilities to improve our products,” said Grindle.
Companies that work with the innovation potential in composites at UMaine or in other areas of research in the state have found niches in the global market. They also receive incentives from the state and local economic development agencies and continue to grow in this economy. These partnerships are unique in Maine and are helping to make the state a leader in innovation.
“We’ve certified 200 companies as Pine Tree Zones, expanding in Maine or locating here. That represents over 3,000 jobs and $2 million in payroll,” said Baldacci. “It says to companies: You keep the taxes being collected on your workforce; all we want is for you to create good jobs and benefits. Our Pine Tree Zones tell companies that we’re not about taxes; we’re about jobs and benefits for our people. If you bring jobs and benefits here, you’ll find the state of Maine very open.”
Old Town Canoe’s trademark wood-and-canvas models will continue to be made and restored. The company has contracted with Island Falls Canoe of Atkinson to build and maintain its line of wooden canoes.
“We will do new production as well as service work,” said Grindle. “There are a lot of Old Town Canoes out there that are an important part of our heritage. They last forever.”
Daigle said she hoped that the downtown manufacturing building where Old Town Canoe has had its operations since the turn of the last century would be turned into a museum.