Gerber Foods considering Fort Smith expansion

While the expansion is not yet a certainty, Gerber Foods may potentially invest $65 million in a plant and equipment expansion that could result in 37 new full-time jobs, according to Patrick Murray, Gerber’s Fort Smith plant manager.

A memo from Fort Smith Deputy City Administrator Ray Gosack suggests the expansion could result in “retaining and adding 65 employees.”

According to Gosack’s memo, Gerber managers at the Fort Smith plant seek to add a cereal manufacturing line to the about 900,000-square-foot plant at 4301 Harriet Lane in  Fort Smith.

“The local plant management will make a proposal to Gerber’s corporate leadership for this new product line at the Fort Smith plant. When the proposal is made, they desire to have the city’s commitment to use IRB’s (industrial revenue bonds),” Gosack noted in the memo. “The state will also be supporting Gerber’s effort with incentives.”

The Fort Smith Board of Directors is being asked to approve $65 in industrial revenue bonds for the Gerber expansion at its Tuesday (Aug. 4) meeting. The bond issue does not obligate city revenue, but is a method by which the new equipment and building expansion is technically owned by the city and therefore tax exempt. The bonds are repaid by Gerber, and the company pays 35% of the normal tax obligation to the school district, county and city using the same allocation formula under normal conditions.

“If implemented, this project would be the most significant redesign of the Gerber Fort Smith production line since its installation in 1964,” Murray wrote in a letter to City Administrator Dennis Kelly. “This project, still in early planning phase, would benefit the community with the addition of 37 new full-time jobs, plus incremental employment and demand that could be created during the construction period.”

Murray said Nestle is considering Fort Smith because of the “business attractiveness of the community, the quality of the labor force and the demonstrated efficiency of the Gerber operation.”

Gerber, owned by Switzerland-based Nestle, invested up to $65 million in the plant in 2003 to switch from glass to plastic packaging. The company employed about 600 at the time. A profile by Manta.com indicates plant employment is around 520.

An announcement of new manufacturing jobs in the Fort Smith metro area is always welcome news, but even more so considering the recent decline in area manufacturing employment.

Manufacturing employment in the Fort Smith metro area has dipped 10.3% in the past 12 months. Regional manufacturing jobs totaled an estimated 22,600 in June, down from 25,200 in June 2008. The annual average manufacturing employment in the Fort Smith area fell from 31,700 in 1999 to 25,000 in 2008, a decline of more than 21%.