Taylor-Dunn Nixes Expansion, Cites Workers’ Comp
By CHRIS CZIBORR
Electric vehicle maker Taylor-Dunn Corp. is scrapping an expansion of its Anaheim headquarters because of the state’s recently passed workers’ compensation bill, Chief Executive Jim Goodwin said.
“The Southern California environment for manufacturing has worsened over the past several months,” Goodwin said. “Labor costs have been a tad high for some time due to low unemployment rates. But this latest bill really is swaying our decision to keep all our Midwest manufacturing employees where they are instead of moving them to Anaheim.”
Taylor-Dunn has been busily buying companies in the Midwest. In October, the company said it planned to shift jobs from newly acquired business to OC and take more space in Anaheim.
Taylor-Dunn counts about 250 OC workers and planned to add another 50 this year. The company also was seeking double its space by adding around 150,000 square feet to its Anaheim operations.
The move doesn’t pencil out now with an expected increase in workers’ compensation costs, Goodwin said. Taylor-Dunn plans to keep the Midwest jobs where they are with the region’s lower labor costs.
Last week, the state Legislature passed a $2.5 billion hike in workers’ compensation benefits paid by employers to injured workers. Gov. Gray Davis is expected to sign the bill this week. Under the bill, employers would have to pay injured workers about $100 more per week starting in January and possibly higher benefit payments in succeeding years.
The increase would cost employers an estimated $1 billion in higher premiums. The rest of the benefit increase is supposed to be funded by cost-saving reforms included in the measure.
“The bill has put a real dent into California’s manufacturing sector,” Goodwin said. “I’d love to keep all my people here and expand in Southern California, because it’s a great place to live and Orange County is the ideal location,I’m a native of the state. But I’ve also got to be able to make a profit.”
Taylor-Dunn put its expansion plan on hold two months ago when the state Legislature started debating the workers” comp bill, Goodwin said. Wary of how much the bill would raise costs, the company elected to take a wait-and-see tack until the measure was finalized, he said.
Before the workers’ comp bill, Goodwin said his labor costs in OC already were 15% to 18% higher on average than for the Midwest companies Taylor-Dunn owns.
Taylor-Dunn’s annual workers’ comp premiums per employee had risen from $500 in 1998 to $1,420 last year, according to Goodwin. Premiums for the company’s Midwest employees are less than $500, he said.
Company officials haven’t yet studied the exact impact the new bill will have on labor costs, he said.
Last month, Taylor-Dunn finished buying Twinsburg, Ohio-based industrial tow tractor and aircraft ground support equipment maker United Tractor Corp. The deal was the latest in a series of buys that started last year when Taylor-Dunn bought Kansas City, Mo.-based Metro Crown International Inc., a maker of replacement parts for ground support vehicles.
The Metro Crown deal and the other planned buys are part of a stepped up move by Taylor-Dunn into ground support vehicles for the military and commercial aircraft.
The company also plans to acquire an unnamed Pacific Northwest company later this year, according to Goodwin.
Taylor-Dunn’s sales last year were $50 million, Goodwin said. This year, the company expects to bring in about $65 million in revenue, he said. Last year, Taylor-Dunn won a three-year contract worth about $10 million to build industrial-use electric vehicles for General Motors Corp.
Taylor-Dunn’s 170,000-square-foot production facilities occupy almost an entire city block between Empire and Brookhurst streets in Anaheim. The company counts about 150,000 of its vehicles in use worldwide.
Regional clients include the Orange County Sanitation District, Chapman University in Orange and the University of California at Irvine.
Taylor-Dunn’s main competition comes from Cushman Textron, part of Providence, R.I.-based Textron Inc.
