Palm Plastics to expand in Bowling Green 3.25.09

Written by David Green.


From Wall Street to Main Street in 24 hours. David Munson didn’t think the effect of the Lehman Brothers collapse would reach Michigan that fast.

Munson, the director of corporate affairs for Palm Plastics, remembers how an important step in the company’s expansion project was nearly complete when the banking giant failed.

“We were right on the edge of getting the job done when Lehman Brothers folded, and that was it,” he said.

Since then, financing for development projects has been nearly impossible to find. In Palm’s case, no builder can come up with the cash to construct the new facility costing at least $7 million. In the meantime, Palm continues to face strong demands from customers to make more product.

The existing plant in Morenci is filled to capacity and there’s no more usable space at the temporary operation in Fayette. To meet demand, Palm was forced to locate additional manufacturing space.

The only really suitable facility found in the area, Munson said, is a former plastics factory in Bowling Green, Ohio. The building includes chillers, a heavy duty electrical distribution system, resin storage silos—most everything needed for Palm’s operation.

All equipment in the Fayette location will be moved to Bowling Green and some equipment now in storage will also be installed there.

The existing 250-some jobs in Morenci will remain here, but the expansion project called for an additional 132 jobs.

No one is happy about the change in plans, Munson said, and hope remains to use the more than $7 million worth of state grants and incentives to build in Morenci.

The state funds come with a two-year  window for development, Munson said, and that money is key to the Morenci expansion.

The delay also puts Morenci’s industrial park road project on hold, since the $900,000 CDBG funds are tied to job creation.

“Until the jobs are created,” Munson said, “Morenci will not get that money.”

Developers and builders are ready to move forward on Palm’s expansion, but the search for funding leads to a dead end.

“We don’t know when that may change,” Munson said, “but we can’t ride it out for a year.”

He has pages and pages of business cards from potential builders and their lenders, but he’s never seen the capital market shut down to this extent.

When the expansion project was announced last October, initial plans called for Palm to begin leasing a new building in Morenci this spring.

“Everybody has done everything to expedite this,” Munson said. “We didn’t foresee how difficult the economy was going to become.”

Until that changes, much of Palm’s production will move from one temporary facility to another.

  • Front.poles
    MOVING EAST—Utility workers continue their slow progress east along U.S. 20 south of Morenci. New electrical poles are put in place before wiring is moved into place.
  • Front.cowboy
    A PERFORMER named Biligbaatar, a member of the AnDa Union troupe from Inner Mongolia, dances at Stair District Library last week during a visit to the Midwest. The nine-member group blends a variety of traditions from Inner and Outer Mongolia. The music is described as drawing from “all the Mongol tribes that Genghis Khan unified.” The group considers itself music gatherers whose goal is to preserve traditional sounds of Mongolia. Biligbaatar grew up among traditional herders who live in yurts. Additional photos are on the back page of this week’s Observer.
  • Front.base Ball
    UMPIRE Thomas Henthorn tosses the bat between team captains Mikayla Price and Chuck Piskoti of Flint’s Lumber City Base Ball Club. Following the 1860 rules, after the bat was grabbed by the captains, captains’ hands advanced to the top of the bat—one hand on top of the other. The captain whose hand ended up on top decided who would bat first. Additional photos of Sunday’s game appear on page 12 of this week’s Observer. The contest was organized in conjunction with Stair District Library’s Hometown Teams exhibit that runs through Nov. 20.
    VALUE OF ATHLETICS—Morenci graduate John Bancroft (center) takes a turn at the microphone during a chat session at the opening of the Hometown Teams exhibit at Stair District Library. Clockwise to his left is John Dillon, Jed Hall, Jim Bauer, Joe Farquhar, George Hollstein, George Vereecke and Mike McDowell. Thomas Henthorn (at the podium) kicked off the conversation. Henthorn, a University of Michigan–Flint professor, will return to Morenci this Sunday to lead a game of vintage base ball at the school softball field.
  • Front.cross
    HUDSON RUNNER Jacob Morgan looks toward the top of the hill with dismay during the tough finish at Harrison Lake State Park. Fayette runner Jacob Garrow focuses on the summit, also, during the Eagle Invitational cross country run Saturday morning. Continuing rain and drizzle made the course even more challenging. Results of the race are in this week’s Observer.
  • Front.bear
    HOLDEN HUTCHISON gives a hug to a black bear cub—the product of a taxidermist’s skills—at the Michigan DNR’s Great Youth Jamboree. The event on Sunday marked the fourth year of the Jamboree. Additional photos are on page 12.
  • Front.hose Testing
    HOSE safety—The FireCatt hose testing company from Troy put Morenci Fire Department hose to the test Monday morning when Mill Street was closed to traffic. The company also checks nozzles and ladders for wear in an effort to keep fire fighters safe while on calls.

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