Collaboration between NH and Vermont Helps Power Job Retention
Beecher falls, VT—Three years ago, Farooq Kathwari, president of furniture manufacturer and retailer Ethan Allen, Inc., challenged officials in New Hampshire and Vermont to help reduce costs so that the company could keep manufacturing operations in New England.
On July 14th, Ethan Allen workers from the company’s Beecher Falls plant, officials from the two states and representatives of Vermont Electric Cooperative (VEC) celebrated the upcoming installation of a power turbine that will provide 700 kilowatts of power and reduce the company’s energy costs by 20%.
Roy Duddy, Director of the New Hampshire Business Resource Center, speaking at the celebration, stated, “This event can be recognized as a Best Practice Model of public-private partnerships, combined with multi-state collaboration. This innovative strategy has helped retain this key sector of the economy and preserve jobs for both New Hampshire and Vermont.”
Ethan Allen: The New England Tradition
Founded in 1932, Ethan Allen has been an important employer in the region since the company chose Beecher Falls for the site of their first factory, thereby laying the groundwork for a national network of manufacturing, retail and distribution. Today Ethan Allen has 11 plant locations, totaling nearly 3.5 million square feet and employing approximately 3,700 people. The Beecher Falls plant employs 502 workers, 323 of whom live in New Hampshire; of the New Hampshire residents. The plant also uses raw materials from the two states, providing employment to those in the forestry industry.
In recent years, the U.S. furniture industry has been hit particularly hard by competition from abroad, resulting in plant closings and workforce reductions. Ethan Allen’s smallest Vermont plant, located in Island Pond, closed in July 2001. A year later the company’s second smallest Vermont plant, in Randolph, also shut down.
Since Kathwari challenged the two states, New Hampshire and Vermont have been working closely with Ethan Allen in three areas: reduction of state and local taxes, Worker’s Compensation and energy savings. While reductions have beens made in the first three, energy costs remained a sticking point until VEC joined the effort. VEC’s engineers custom designed a co-generation turbine that will take advantage of the waste heat Ethan Allen produces to reduce the company’s overall energy cost. The project—which will total approximately $800,000—received equal financial support from the Vermont and New Hampshire Community Development Block Grant Programs.
The turbine will be owned by the Northern Community Investment Corporation (NCIC) and the Coos Economic Development Corporation (CEDC) NCIC Partnership, which will, in turn, lease it to VEC. VEC will install the turbine at Ethan Allen, and will purchase excess electricity from Ethan Allen under a five-year contract. The sale to VEC of excess electricity produced during non-production time will provide the cost savings necessary for Ethan Allen to remain open and retain the 500+ jobs. CEDC and NCIC will benefit from the lease income, and from the sale of the turbine, should that happen in the future.
Reflecting on the cooperative effort, Duddy later said, “This project came together thanks to the efforts of a number of people and organizations on both sides of the Connecticut River. It also sets a new standard for the kind of strategic collaboration New Hampshire and Vermont can undertake together to reach our common economic development goals.