The Buck Stopped Here

Tweet

The more they learned about it, the more Buck's team liked Post Falls, but the Idaho town wasn't the only suitor. Manufacturing jobs are the Holy Grail of economic development, and Buck's track record of community involvement made it doubly attractive to recruiters. "We had a good feeling about the company," says recruiter Roger Lee, who led Redmond's effort to land Buck. "After the whole Enron collapse, a family company with lofty commitments looked good."

Buck took a long, hard look at Redmond. Situated in the high desert east of the Cascade Mountains, Redmond is sunny, dry, and considerably warmer than Idaho. Several domestic knife makers are based nearby, which meant a ready pool of skilled labor and easy access to suppliers. Energy was cheap and labor costs, while higher than those in Idaho, were still below California's. Moreover, the quality of life was outstanding, especially if you liked to hunt, fish, raft, or ski. There were drawbacks, of course, such as a rinky-dink airport and no interstate highway, but in the spring of 2002, Oregon recruiters sweetened their offer. They would give Buck heavily discounted land, a five-year exemption on property taxes, reduced building fees, and a discount on sewer rates. Altogether the package was worth more than $1.5 million. "Oregon was a real player," says Potter, the Idaho recruiter. "Oregon had us beat."

Potter couldn't match those incentives, although he did persuade the Idaho Department of Commerce & Labor to give Buck $3,000 in training grants for every job it brought to the state. And he hammered away at his central point--that Idaho offered lower operating costs, lower taxes, and a more predictable regulatory environment. Buck was also attracted to Spokane, which is only 30 miles west of Post Falls and boasted many of the same advantages. Right around that time, however, the Spokane Spokesman-Review began publishing editorials lamenting the state of Washington's "big, bossy government." Potter, knowing that Chuck Buck was a steadfast conservative, made sure to send him the clips.

"I want to go to Idaho"

The Spokane Journal of Business ran a scoop headlined "Buck Knives Eyes Post Falls." Within hours, word hit the factory floor in El Cajon.

So far, the hunt for a new location had been a closely guarded secret. That changed on April 2, 2002, when the Spokane Journal of Business ran a front-page scoop headlined, "Buck Knives Eyes Post Falls." Within hours, word had filtered back to the factory floor in El Cajon. Rumors flew and tempers ran high. Why hadn't anyone told them this was in the cards?

To quell the unrest, CJ convened an emergency all-hands meeting in the company cafeteria. Before a sea of anxious faces, he stood and explained that, yes, Buck was considering a move but had not yet made a final decision. It was a tense encounter. "They felt hurt," he says. "They felt betrayed. They felt like we weren't telling them what was going on." CJ learned his lesson. From then on, he resolved to keep workers in the loop with regular meetings.

The news that Buck might move to Idaho also sent a chill through public officials in San Diego. To encourage Buck to stay, the city assembled what it dubbed the "Red Team," including U.S. Congressman Duncan Hunter, State Assemblyman Jay LaSuer, and County Supervisor Dianne Jacob. They suggested that Buck shift production to evening hours when electricity was cheaper, or move the factory across town to an enterprise zone. "We did everything we possibly could," says Mark Lewis, the mayor of El Cajon. Unfortunately, the Red Team couldn't solve Buck's fundamental problems. The wild fluctuations in electricity rates had subsided, but rates were still high--and now workers' compensation was beginning to spiral out of control. For Buck, the Red Team came a day late and a dollar short. "I don't mean to belittle them, but it was meaningless," says CJ. "Their hearts were in the right place, but they didn't have the resources."

It was time to make a decision. During one skull session, as CJ and Duckett were hashing out the merits of the three sites, Chuck poked his head in the door. He had just come back from a trip to Idaho. He liked the panhandle's down-home attitude--and was uneasy with what he perceived as the liberal tendencies of Oregon and Washington. "I'm a typical conservative," he says. "I wanted to go somewhere where they run things on those principles." Chuck had also discovered that Idaho's governor, Dirk Kempthorne, was a loyal customer who carried a Buck knife whenever he rode his Harley-Davidson. "I want to go to Idaho," he said.

Chuck was the chairman of the board and the majority stockholder. "That pretty much ended the decision process," CJ recalls. It was going to be Post Falls. Now they had to figure out how to make it happen.

Buck reckoned that building a factory in Idaho would cost about $8.5 million. It would take another $4 million to relocate key employees and equipment. Offsetting that was the capital Buck could realize from selling the factory in El Cajon. The factory itself was perfectly sound, but the real value of the property lay in the dirt beneath it: 10 acres inside the city limits, which CJ hoped to sell to another manufacturer for $11 million. If the numbers penciled out, the move would pay for itself in three years.

When no such buyer emerged, Buck began courting residential developers. But that proved problematic as well. The site wasn't zoned for residential use. Even worse, it sat next to Gillespie Field, a small public airport serving light aircraft. Any developer who wanted to build houses would have to get a sign-off from the San Diego County Regional Airport Authority--and the pilots at Gillespie Field were dead set against residential development so close to the runway, fearing that the homeowners who moved in would eventually grouse about airplane noise and push the city into shutting down the airport.

 PREV  1 | 2 | 3 | 4 | 5  NEXT 

Read more:

Sign-up for our Small Business Success Newsletter

Email Address: