Gilroy
– Gilroy isn’t the only town fishing for the new Indian
Motorcycle headquarters.
Gilroy – Gilroy isn’t the only town fishing for the new Indian Motorcycle headquarters.
In Manatee County, Fla., locals are also trying to land “America’s First Motorcycle,” which would be the county’s second classic American brand. Manatee is already the home of Chris-Craft motorboats, owned by the same British buyout firm that recently purchased Indian.
That firm, Stellican Ltd., is also looking at nearby Tampa and Sarasota as well, founder Stephen Julius said in a recent phone interview.
Stellican is also looking at Springfield, Mass., where the company made America’s first gas-powered motorcycles in 1901 and rivaled Harley-Davidson for dominance of the U.S. market before folding in 1953.
In addition, Julius said he has visited Anniston, Ala., where the state is known to give away huge tax breaks and where industries are sometimes offered free land, buildings and cash.
Gilroy, however, has already launched what could be the strongest sales pitch of the bunch, especially if Gov. Arnold Schwarzenegger – himself an Indian owner – gets involved.
Gilroy was Indian’s home for five years, beginning in 1999, when the brand roared back to life after 45 years of dormancy. It closed its doors last Sept. 19, ostensibly due to a lack of capital, despite rising sales numbers. Nearly 400 workers were laid off without warning that day.
Julius said he is looking for three main things in Stellican’s hunt for a place to build Indians: a skilled workforce, low wage levels and state incentives.
Gilroy has the workforce, but the other criteria favor other states.
Labor costs in Silicon Valley, based largely on cost of living, are among the nation’s highest. In Gilroy in July, the median price of a single-family home was $615,000, according to the Santa Clara County Association of Realtors. In Manatee County, it was $216,900 as of May, according to the county’s Economic Development Council.
Updated home-sale figures weren’t available for Springfield and Anniston, but census data shows that in 2000, the median home value in Springfield’s Hampden County was $117,400. In Anniston’s Calhoun County, it was a whoppingly low $71,600.
Sunshine State salesmanship
Nancy Engel, executive director of the Manatee County EDC, said her agency plans to aggressively try to convince Stellican to keep all its manufacturing in one place – there.
“We’re in the process now of looking at the different business costs in Florida, Massachusetts and California,” Engel told the Sarasota-area Herald Tribune newspaper.
Florida’s corporate income tax rate is 5.5 percent, compared with California’s 8.84 percent, Engel pointed out.
California is famous as the home of many motorcyclists – a large local market to draw from – but Gilroy Indian dealer Don Nofrey said Florida has even more.
Nevertheless, Nofrey said that when a Stellican official asked him what Indian should not do if it wants to survive, he told them “Don’t go Florida.” Why? Rust.
“You’re dealing with metal,” Nofrey said. “It’s a salty state. It’s too close to the ocean. It’s too damp. You won’t get them built and shipped before they rust.”
Mass. marketing slow so far
Until last year, Ray Jensen owned the Indian dealership in Springfield. Shortly after the company called it quits, however, he followed suit.
Jensen, who now lives on Key West, Fla., says hearing that Indian may return to its historic home town has re-energized him, but he’s skeptical about local recruitment efforts.
“The down side of Springfield is that, to date, the city and the state haven’t stepped up at all to welcome (Stellican) in,” Jensen said.
Nevertheless, he said, “Except for having skilled labor right off the bat, Springfield would be the smart move in the long run. … If you ask anyone that isn’t in Gilroy, building (Indians) in Springfield again would certainly heal a lot of wounds inflicted since 1953. … I certainly will push for that, given the chance.
“More likely, however, is the South.”
Springfield economic development officials could not be contacted as of press time.
Deep South discount
“Alabama is certainly on our list as well,” Julius said, describing his visit to Anniston. “I’d never been to Alabama before, but I love the place. It’s a very interesting environment.”
At the Alabama Development Office, which recruits industry and has the authority to offer incentive packages, Director Neil Wade said he had sent Stellican information about relocating in the state.
“We are absolutely going to make sure that the new owners know that Alabama would be a great place for them to locate,” he said. “Beyond that, nothing has really happened at this point.”
In June 2003, Indian executives seriously entertained the idea of moving to the Barber Motorsports Park outside Birmingham, Alabama’s largest city. The Motorcycle News Wire reported that Indian was looking for at least $1 million in incentives.
Wade said he was “disappointed” when that deal fell through, “but we’re excited to see that they have been bought and that there might be some potential opportunities down the road.”
Gilroy’s got: workforce, governor
While nowhere in California can hope to offer the same business incentives or low labor costs as Alabama, Gilroy has “a laundry list of advantages,” according to Bill Lindsteadt, executive director of the Gilroy Economic Development Corporation.
First, Gilroy has the brain trust – workers and managers who have experience making Indians and who know the dealers, vendors and riders’ groups. Many of those skilled Indian workers are still around here, and Julius acknowledged that “The workforce is a very important element” of Stellican’s decision.
Second, few, if any, other states can boast a governor who owns an Indian. Lindsteadt has already enlisted the help of Arnold Schwarzenegger’s office and, while he wouldn’t say whether Schwarzenegger will step into the effort personally, he did say he is confident the governor’s office will help sway Stellican toward Gilroy.
In Schwarzenegger’s State of the State speech early this year, he swore to actively “sell California” to businesses interested in locating here.
But even without Schwarzenegger’s help, Lindsteadt appears to be working hard to sell Gilroy. He said he has been in close contact with the Stellican owners and is waiting for them to give him their exact labor and industrial space requirements before he presents them with an incentive package.
“We’re on top of it, and we’re going to do everything we can to get Indian back here,” Lindsteadt said.
Stellican still thinking
Julius said his firm has “set no time schedule” to decide where to build motorcycles.
On one hand, he said, “We want to do this as soon as possible.” On the other, he said, they are being methodical and thoughtful about planning their moves, and that takes time.
“We’re going to get it right,” Julius said. “The product is going to be bulletproof … just like we did with Chris-Craft.”
Peter Crowley can be reached at
408-842-6400 or
pc******@gi************.com
.
