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Two companies seeking tax breaks

August 28th, 2018

By Steve Garbacz | KPC Media - The News Sun

Two manufacturers are each adding about $300,000 in new equipment, each planning to hire at least three new people and each paying about $20 per hour for those new jobs.

Kendallville businesses are growing, but finding people to actually work the jobs continues to be a major struggle for employers and one that could stymie continuing expansion.

The Kendallville Ecomonic Development Advisory Committee considered two tax abatement requests Monday, one from Bolhoff Inc. and one from Reliable Tool and Machine Company Inc., both of which were similar in scope.

Bolhoff is intended to add a new rivstud assembly machine at a cost of $315, 723. Plant manager Chris Lautzenheiser said this piece of equipment will help the company add to a line that’s gone from producing zero pieces per year to 16 million units in the last three years.

“This is a product we were previously importing in Bolhoff France and we were manufacturing it and importing it,” Lautzenheiser said, noting that method wasn’t affordable in the U.S., so production has been moving stateside.

The new equipment should create at least three new jobs, paying $20 per hour, he said.

Based on the investment of about $300,000, committee member Jerry Steinbarger suggested a three-year tax break for the project. The committee didn’t have a calculation for savings on a three-year abatement, but the savings should be about $10,000 compared to approximately $22,000 in taxes paid over the term.

Following that, Reliable Tool and Machine presented a similar-sized request, looking to add a twin-spindle CNC lathe, which will cost $300,000. Reliable also wants to add at least three jobs, with wages of $20 per hour.

Tariffs on Chinese goods have been affecting Reliable, Chief Operations Officer Greg Salway explained. The company was purchasing parts from China, but with tariffs in place, producing the product in the U.S. is becoming more and more competitive.

Salway said the three hires is a goal, but he wasn’t sure it would be possible right away. The labor market is so short right now the company has been struggling to find new workers. The company is 18 people short and Salway said ideally they could use 50 workers.

“We’re having to add more equipment to our first shift operation because we have a hard time hiring for the second and third shifts,” Salway said.

Reliable has grown about 20 percent last year and is on pace to grow another 20 percent this year. But that growth could be at risk without more workers, Salway said. Right now, the company is running overtime, which he said about a third of workers love, a third hate and the other third are indifferent.

“We’re growing, but we’re just about to the point where we’re not going to be able to grow without more employees or without automation,” Salway said. “We’re 18 short right now of what we really need-need. We should be hiring around 50 people to get rid of the overtime that we’re currently running.”

Reliable President Chuck Drerup said the company has hired about 100 people this year, but only retained 20-25 of those hires.

Like the Bolhoff abatement, Steinbarger suggested a three-year abatement for Reliable Tool and Machine. The committee approved that recommendation unanimously.