By J.G. Wallace, Bluffton News-Banner
62 years in Bluffton as a keystone in Wells County's economic landscape, Franklin Electric's Bluffton plant has been sold to a private equity firm from Cleveland, which will now operate the plant as Bluffton Motor Works.
Franklin Electric Co. Inc. officials announced on Monday morning that the company's Engineered Motor Products Division has been sold to Capital Works, LLC. The terms of the asset sale were not disclosed.
The sale includes the physical campus at 400 East Spring Street in Bluffton. At least in the immediate future Franklin Electric will lease their headquarters from the new owners, but Franklin Electric Chairman and CEO R. Scott Trumbull foresees moving the corporate offices to a new facility the company hopes to develop to expand their research and development labs.
Franklin Electric's EMPD division manufactures and sells fractional horsepower motors for primarily original equipment manufacturers for many diverse, specialty applications such as soft serve ice cream dispensers, bowling pin setters and ball return systems, paint mixing machines, and food service applications.
A press release announcing the sale stated that EMPD's revenues represent less than 10 percent of Franklin Electric's consolidated sales. "For a variety of reasons the Franklin management and board of directors have determined that continuing to own and operate the Engineered Motor Products Division is no longer complimentary to our future growth plans," said Trumbull.
"So while we believe this divestiture is in the best interests of our share owners, we are pleased that we have found a buyer who recognizes the value of the business and intends to continue operating it in Bluffton," Trumbull added.
John M. Mueller, President of Capital Works, LLC, said, "The Capital Works team looks forward to working with EMPD management to increase the growth rate and the profitability of the business."
Mueller said Bluffton Motor Works will have Capital Works support in, "continuing to provide excellent quality and service to the existing and future customer base."
The logo of the new company, Bluffton Motor Works prominently features the clock tower at the Wells County Courthouse in the background.
Trumbull said the seeds of the eventual sale were sown about 25 years ago when the company decided to take the core of their business, submersible pumps, out of production in Bluffton, shifting production to Siloam Springs, Arkansas and Wilburton, Oklahoma, and now overseas.
"Almost from that day on this plant has lost money," Trumbull said. "It's not a problem of the quality of work or the management, it has to do with the market."
Trumbull said the board of directors had encouraged the sale of the division, but the company subsidized the operations in Bluffton for many years.
"We did not want to be a part of shutting the business down," Trumbull said. Trumbull said for almost ten years of declining sales the 297 plant employees operated with a safety net provided by Franklin Electric's successes elsewhere.
Trumbull said in the past two years changes in the market and the impact of consolidations have led to a complete turnabout where the Bluffton plant is now financially viable.
"The management and employees have done a nice job in driving up productivity," Trumbull said. "This business at this point is viable."
Trumbull said that Franklin Electric's core strategy to become a pump company put their operations in Bluffton in direct competition with some of their largest customers.
In seeking to sell the division Trumbull said that a sale to strategic buyers in the industry had been ruled out, as they would have likely closed the Bluffton plant as a cost cutting measure.
For now Franklin Electric will keep their corporate offices at the Bluffton site along with their 182 employees, but Trumbull said the company will be looking at their options as they consider sites for an expanded tech center. Trumbull said, "Our plan is to lease this space and the space we are utilizing at the annex.
"I have been pretty up front in saying as our business evolves our tech center needs to evolve," Trumbull said. The Bluffton campus does not have the space to accommodate what the company will need in the future, Trumbull said.
The company hopes to build a large research and development lab that would include large test pools and water handling equipment. Once the company begins building the tech center Trumbull said "it would be logical at that time," to put sales, information technology, and other office workers in the same facility. Trumbull said, "Where we build a new tech center the headquarters will be adjacent to it."
Trumbull said the company would prefer to stay in Northeast Indiana, and would like not to have to relocate many employees. Trumbull said a future site search will include Bluffton.
R.D. Jones offered an optimistic outlook as well. "I feel as though we have a solid future with a lot of opportunity," Jones said. "The team is intact and it stays in place."
Jones said the new business will create a small number of jobs right away, about 5-6, with the immediate need to hire some IT staff and finance professionals.
Jones said the plant's hourly workforce could also grow next year as the company pursues a goal of 10% growth, their targeted figure.
Trumbull said that while Franklin Electric has been a part of the Bluffton Community since 1944, he feels ultimately that the Bluffton community will be even more important to the new owners due to the scale, and it being the only plant operated by the company.
Franklin Electric Company is the world's largest manufacturer of submersible electric motors and a leading producer of engineered specialty electric motor products and electronic controls.