Arctic Cat Plant In St. Cloud

[Dave]

Matt McKinney, Star Tribune

August 11, 2005 ARCTIC0811

The Minnesota snowmobile company Arctic Cat Inc. will announce plans today to build a new manufacturing facility in St. Cloud.

Details of the expansion were not available Wednesday night, but Arctic Cat's chief executive, Christopher Twomey, wrote in this year's annual report that the company was searching for a place to build a factory to make all-terrain-vehicle engines.

The company introduced its own ATV engine last year, according to the annual report, selling 1,000 of the 650 H1 engine in the first three months of this year. Sales should rise to 10,000 for the 2006 fiscal year and 20,000 the following year.

The announcement comes amid a boom in the popular ATV market. ATV sales outpaced snowmobiles for the first time in the company's history in the fiscal year ended March 31, 2004. Snowmobile sales have been hurt in part, Twomey noted, by several consecutive years of poor snow conditions.

Twomey will make the announcement with Gov. Tim Pawlenty at the State Capitol at 9 a.m. today along with St. Cloud Mayor John Ellenbecker and Matt Kramer, commissioner of the state Department of Employment and Economic Development, the governor's office said Wednesday.

Pawlenty has pushed local companies to expand within Minnesota, using economic incentives in his Job Opportunity Building Zone initiative to encourage local growth. The governor credits the initiative, begun last year, with bringing jobs to economically depressed communities throughout the state. Critics of the plan have said it's not clear which expansions would have occurred anyway, with or without the governor's support.

Publicly traded Arctic Cat, based in Thief River Falls, Minn., had net sales of $689 million for the fiscal year that ended March 31. Sales for the previous year were $650 million.

[castmaster]

yes the great jobz program and the wonderful benefits of corporate welfare. i just read today that as part of the jobz program incentive that brought this cat plant to st cloud instead of WI, cat will pay no property tax, no corporate income taxes, no sales taxes, no capital gains taxes, and there may be some more, for 10 YEARS! all this to create a whopping 50 new jobs that will pay from $11.50-$15 an hour. sounds like a great deal for cat, but a crappy deal for taxpayers!!

i was also unaware that st cloud was a "economically depressed community".

[Gus]

Castmaster- I bet those 50 Minnesotans will be happy this plant is coming to MN and not WI. Oh, and I'm sure those 50 people pay their taxes to MN so don't for a second think that this is a bad deal for MN. In the short run there might not be as much revenue for the state but in the long run we are way ahead. I've lived and worked in both Duluth and St. Cloud, and I would consider both towns economically depressed. Not many "career" jobs in either town. These jobs are likely to be very welcome in St. Cloud. I personally know of more than 5 people who are still trying to recover from the fingerhut shutdown a few years back. I say good job to Artic Cat.

[castmaster]

Gus,

so if you consider duluth and st cloud to be economically depressed communities, what words would you use to describe the host of other northern MN communities, especially those on the iron range? give me a break, st cloud is a thriving metropolis compared to most in this state.

also, considering that if this had been put in river falls wi, at least a few, if not most of the 50 jobs that needed to be filled there would be filled with people currently crossing the river to work in the twin cities metro, which would then open up the jobs they left in MN to possible employment by MN residents, did this truly create 50 new tax paying jobs or could it be some new jobs and some trade off?

to me this is just another example of the benefits reaped by business in the state with the 4th largest amount of money spent by lobbyist to woo govt. only texas, california and new york rank higher in money spent by lobbyists. you dont think they are getting something for that cash?

i also find it funny that when any talks of nationalized health care or something similar is discussed its dismissed as socialistic or communist, yet we have stuff like this. isnt the essence of a capitalistic society the fact that business should operate without government help? shouldnt businesses make it or break it on their own? shouldnt the playing field be level for all, how will this effect polaris now that cat has what amounts to a subsidized plant to produce their engines while polaris is paying their own bills? will it make it tougher to compete or to earn the same profits?

[Gus]

Castmaster-

Let's just agree to dissagree so we don't get this thread moved to the Politics thread.

[CaptainMusky]

Don't think for a second that Polaris isn't taking advantage of these same advantages. They are reaping these same benefits ever since they moved their now defunct watercraft production to Spirit Lake, IA. Perhaps the state got smart and offered AC something to keep those lowly 50 jobs here. Which, within a short timeframe could expand to 150. What about yamaha moving to WI for their testing facility? MN keeps losing out to our border states because they offer benefits that up to now MN would not. I worked for an employer who chose to build in Eau Claire WI versus expanding in St Cloud (this was 10 years ago) for the very reasons AC CHOSE to come TO ST CLOUD.

St Cloud's economy is ONLY bolstered by retail. There is very little high tech, high paying jobs here (these AC jobs aren't either) and with the paper plant close to closing, rumors that Frigidaire is set to lay off 300 employees, and countless other companies who have had 10 to 20% layoffs in the last 3 years with no new corporations coming to town to replace those jobs, this is a welcomed addition.

Sure St Cloud is busy. A lot of money comes in and out of this area, BUT there has been little to no growth in jobs over the last 5 years. FACT! Unless of course you count restaurants and sporting goods stores.

Do I think it is great to give AC all these benefits to come here and not pay taxes etc? Sure, because it meant jobs for this area versus losing them to WI. It sets them up for future growth with AC and with other Corporations as they are more apt to come here when there is other large players.

AC means a lot to MN. If Pol was considering the same thing don't fool yourself that they wouldn't be afforded the same options. This will be a great move for AC, St Cloud and the state of MN in the long run.

[Neiko]

Correct me if I am wrong but didn't Polaris just benefit from the JOBZ program with there new facility in Wyoming,MN?

[CaptainMusky]

Exactly my point. I would rather make some consessions to keep these jobs and businesses here than send them to China!

[castmaster]

i can completely understand the emotional response of this being a great thing. i may be to cynical (based mostly on life experience!) but i just feel things should be level for all, same oppurtunities exist for all business. someone mentioned the fingerhut closing, as happy as the 50 people with new jobs will be, those who lost jobs and the state didnt make the same concessions to save theirs wont be just as mad as others are happy? in my town here there are very few carrer type jobs as well. the local smeads factory is down to a token force because of relocating jobs to other states, concessions were sought and denied. those who lost jobs shouldnt feel shortchanged that the same effort and concessions werent used to spare them from the chopping block? we could go on and on with other companies that were tuned down for same or similar concessions. how equal is it for govt to turn down requests for concessions in order to save one mans job, but provide them to create another mans job. isnt govt support of business a socialistic and not a capitalistic endeavor? the working people in this factory earning no morethan $31,000 gross pay will be expected to pay every cent of tax due out of their pretty low earnings. a company with profits of $689 million (an increase of $39 million just last year according to the original post) will pay no taxes for a plant that will increase their already large profits. thats the "american way"? it sure didnt used to be.

i believe the best way to stop this is for the federal govt to stop all states from offering tax incentives or concessions to business for relocating there, which then forces states to better the offers in order to keep companies from leaving. otherwise we will continue to be threatened as if carl pohlad was running all businesses!!

as for the relocation of jobs to china(and elsewhere) i find it disgusting. you have all these flag waving, chest thumping, "proud to be an american" folks who seem ready to string up anyone who dares question govt, who then cant forsake their own greed for increased profits by outsourcing jobs to foreigners. maybe they should start showing that pride by making a little less profit and keeping the country they are so proud of strong. maybe its time for stiff tariffs on goods produced by american companies with overseas labor. of course that will never happen because both parties are in the same back pockets!

one of the other downsides to programs like this that doesnt seem to get discussed much is what happens in 10 years. now there is a functioning plant with real, not just proposed or promised, jobs. artic cat (or any company in a similar situation) then has even more leverage to turn around and say they have a better offer to close the plant and relocate out of state if they dont extend the concessions. the threat is then even more real because it now affects people even more than just a proposed plant does. from what i have seen once most businesses get a taste of drinking from the govt teet they have a hard time weening themselves.

so yes, i guess we will just have to agree to disagree on this one.