Regional Report Triad March 2013
A familiar feeling
In December, Herbalife Ltd. announced it would invest $130 million to turn the former Dell Inc. computer plant in Winston-Salem into its largest manufacturing and distribution hub, creating about 500 jobs by 2015. The Los Angeles-based maker of nutrition and weight-loss products is eligible for $3.5 million in local incentives and up to $6.5 million from the state. But the same day Herbalife released its plans, influential hedge-fund manager Bill Ackman called the company a pyramid scheme — alleging its 2 million independent distributors make more from recruiting other distributors than selling products — and made a $1 billion short bet against it. Herbalife claimed Ackman was attempting “market manipulation,” but some believe its troubles could thwart the expansion into the Triad — a possibility eerily reminiscent of the building’s former tenant.
Dell announced in 2004 it would invest $115 million to build a 750,000-square-foot desktop-computer factory in the Triad that would employ 1,400 people within five years of its opening. Regional leaders, who competed against each other for the project, saw technology as a replacement for the fading textile, tobacco and furniture industries and made the Round Rock, Texas-based company eligible for record local and state incentives of up to $306 million. But in 2009, as consumers moved from desktops to laptops and mobile devices, it closed the plant and laid off all 900 workers. Most of the incentives were never disbursed, and clawback provisions meant Dell repaid almost everything it received.
Bob Leak, president of Winston-Salem Business Inc., says the economic-development organization has fielded questions about Herbalife’s stability, but he reminds people it “has been in business more than 30 years, is listed on the New York Stock Exchange and has close to $4 billion in sales in more than 80 countries.” (Revenue reached $3.5 billion in 2011.) And it won’t get a dime if it doesn’t meet job and investment goals.
Herbalife Chief Operating Officer Richard Goudis says the company is committed to the plant, which will make mostly meal-replacement shakes for the export market. It closed on the property in late December, is choosing contractors for the renovation and plans to begin production in June 2014. He also notes that Herbalife products will remain in demand “as long as there’s a global obesity epidemic.”
“Buffet media buys paper”
— Headline in the Greensboro News & Record that misspelled the surname of Warren Buffett, whose BH Media Group Inc., a subsidiary of Omaha, Neb.-based Berkshire Hathaway Inc., bought the Triad newspaper in February for an undisclosed price. Publisher Robin Saul was quoted as saying that though the paper had gone through layoffs and budget cuts in recent years “we haven’t hurt the quality of the product.”
LEXINGTON — Davidson County commissioners voted to endorse Alcoa Power Generating’s continued management of the dam at High Rock Lake. The New York-based aluminum-maker wants the state to renew a licensing agreement that gives it control of hydroelectric dams along the lower Yadkin River (“Water War,” January 2012).
MOUNT AIRY — St. Louis-based Furniture Brands International closed subsidiary Henredon Furniture’s factory here, laying off 134 workers. The plant made upholstered furniture.
WINSTO-SALEM — Citymax Hotels opened the first Krispy Kreme Doughnuts franchise in India. The store in Bangalore is one of about 80 the Mumbai, India-based company will open over the next five years.
ASHEBORO — Energizer Holdings will eliminate 90 of about 700 jobs at two plants here. The St. Louis-based battery-maker announced a cost-cutting initiative last fall.
WHITSETT — Guilford County commissioners approved more than $272,000 in incentives for Qualicaps, which plans to invest $26 million at its factory here and add 123 to its workforce of about 150 within three years. The subsidiary of Irving, Texas-based The Qualicaps Group makes drug capsules.
ASHEBORO — The North Carolina Zoo reported its best attendance in 15 years in 2012, attracting 761,964 visitors, up from 694,929 the year before. A temporary animatronic dinosaur exhibit and births of several baby animals, including a giraffe and two gorillas, boosted turnout.