For its new manufacturing plant, Aircraft Braking Systems has decided it prefers Kentucky bluegrass to Akron sod.
The company announced Thursday it would open a $30-million-plus factory in central Kentucky instead of Akron. City officials had been striving to attract the facility.
But Ohio's tangible personal property tax on machinery and equipment, a key topic in state tax-reform talks, may have played a major role in the decision to build in another state.
Akron and Danville, Ky., 40 miles south of the capital, Frankfort, were the two finalists for the 45,000-square-foot facility. The Kentucky plant is to create about 45 jobs by the time it opens at the end of 2006, Aircraft Braking said.
''They claim they got a better deal on taxes in Kentucky,'' said Gene Steele, president of UAW Local 856, which represents about 330 workers at Aircraft Braking off Massillon Road near the Rubber Bowl. Aircraft Braking employs more than 700 in Akron.
Company officials talked with Akron employees Thursday about the decision to open in Kentucky and referred to Ohio's tangible personal property tax, Steele said.
''It's discouraging news for Akron. I'd much rather see those jobs here in Akron,'' Steele said. ''They pretty much hit on the tax thing.''
Lower pay scales in Kentucky may also have been a factor, Steele acknowledged.
In a news release, Aircraft Braking said the Kentucky site offered ''the more complete package of economics and operational flexibility.'' The company's release did not refer specifically to Ohio taxes, and company officials would not elaborate.
''Officials from the city of Akron and the state of Ohio were diligent in their efforts to influence our decision for Akron, but in the final analysis, Danville was the better business decision,'' Ken Schwartz, president and CEO of Aircraft Braking's corporate parent, K&F Industries Inc., said in the prepared statement.
The Ohio Manufacturers' Association is pushing for the elimination of the state's tangible personal property tax, saying it hurts businesses and jobs. The Columbus lobbying organization supports proposed state tax reform measures that would eliminate the tax.
The tangible personal property tax dates to the 1930s and impedes new investment in the state, said association spokesman Randy Leffler. The state levies an annual tax on equipment and machinery. The tax value is gradually reduced each year as the machinery or equipment depreciates, Leffler said.
Akron Mayor Don Plusquellic said in a prepared statement: ''While we are disappointed that Akron was not chosen to host Aircraft Braking System's new facility, we are pleased ABS continues to have a substantial presence in Akron.''
Plusquellic said, ''The city will continue to work with ABS on improvements to their physical plant in southeast Akron that employs 750 people with a payroll in excess of $40 million.''
Akron city officials have said they worked hard to put together a package that would entice Aircraft Braking to build the plant here. Akron's proposed incentives included relocating a sewer line and building a power substation, at a cost of $1.5 million.
City officials in February said Aircraft Braking is not considering moving its work force out of Akron. The company makes aircraft wheels, brakes and anti-skid systems for commercial, general aviation and military aircraft. Customers include major aircraft makers Boeing, Lear, Bombardier and Lockheed.
City officials had been pessimistic about landing the plant.
At a City Council retreat in February at the Mud Run Golf Course clubhouse in Akron, Plusquellic at one point called the city's Aircraft Braking proposal a ''dead deal.''
Also at that retreat, Plusquellic referred to Ohio's high taxes on manufacturers as making it hard for Akron to compete.
''The (Aircraft Braking) top guy in New York and the guy (in Akron) said, 'You guys did everything you could.' There are certain tax problems.... The state is horrible,'' Plusquellic said then.
