A manufacturing facility in Texas has been purchased to accommodate expansion. This is an expansion, not relocation of the business. Relocating would cause the loss of too many valuable employees. About forty years ago as result of management change, a large Oregon Company made the decision to move their headquarters from Northwest Oregon to Southeast Washington. The new management felt the headquarters staff of about three hundred was larger than necessary and the move offered the opportunity for reduction. Ninety-five were offered jobs with a move to the Washington location. Only fifty accepted positions at the new location. The type of work this company does requires a staff with a large amount of knowledge and skills. The staff is Gem’s primary asset. Loss of staff caused by a move is unacceptable

Expanding in Oregon was not an option. This state has developed a strong antibusiness climate. A major factor is Oregon’s high minimum wage, $13.50 per hour compared with a federal minimum wage of $7.25 per hour. Gem’s most effective competitor is located in a state with no state minimum wage. While neither company has any minimum wage jobs, a high minimum wage forces all wages and cost of living up. Labor Union negotiators utilize minimum wage increases to justify increasing wages covered by their union contracts. In addition to business climate and no state minimum wage, most of Gem Equipment’s European shipments leave from Galveston Texas. Maybe most important is the opportunity for business from Texas food processors.

The facility is located at 2424 Oak Street in Abilene, Texas. The site is 3.92 acres with just over twenty-eight thousand square feet of buildings. The main building promoted this purchase. This building is seventy-five foot wide and two hundred feet long with the ceiling fifty feet above the floor. This building has two bridge cranes. Each bridge has two fifteen-ton hoists; maximum crane hook height is forty feet. This building is ideal for setting up large frying and blanching systems. If Gem was having new building built, a minimum crane hook height of thirty feet would be specified. This building also has several five-ton jib cranes. Smaller buildings include a fabrication shop with a twenty five-foot high ceiling and two five-ton bridge cranes, a twenty-four hundred square foot paint shop and a two-thousand square foot office building. Also included: two plate rolls, a forklift truck, welding machines and acorn welding tables.

Staffing a manufacturing facility located that far from the home office is a concern, especially when it is the first time. Two factors are reducing the normal risk. First the plant manager. He has been a member of Gem Equipment’s upper management for several years. He worked his way up from fabricator. Prior to his present position, he was a senior leadman, a position that includes being in charge of large installation jobs. He knows how to handle tough situations a long way away from his direct supervisor. These jobs have also provided the rest of Gem’s organization with experience working with operations located a long way from the home office. Staff is expected to be on site in early August and open for business including a salesman in September.