This month Weidmann Electrical Technology will complete work on a $40 million expansion of its manufacturing plant in St. Johnsbury. The company has been one of the areas largest employers for decades.
Weidmann uses an ancient process to make something very much part of modern life.
"The Chinese were the first to make paper, and it’s really a modern version of that," Weidmann vice-president John Goodrich explains as he leads a tour of the company’s sprawling plant.
What goes into the process is wood pulp. What comes out is a specialized paper product used by Weidmann to manufacture the insulation inside the electric transformers that hang on power poles and sit in substations everywhere.
Weidmann’s parent company is a family owned Swiss firm with manufacturing plants around the world. The St. Johnsbury plant is company’s largest facility in the Americas. Weidmann broke ground here more than 40 years ago.
"I would say we’re a real success story for especially this area of Vermont,"Goodrich says.
Goodrich explains that while there’s been some ebb and flow, Weidmann has consistently provided the area with hundreds of good paying jobs.
More than 260 people currently work at the plant, with an average salary of $52,000 a year.
But Goodrich says the future of the plant was in question a number of years ago when the company was weighing whether or not to invest more money in it.
"We were actually at the stage where we needed to either upgrade our technology or we knew we would not continue in this location," he says.
And Goodrich says there were some compelling reasons why the company should consider taking its manufacturing elsewhere – to another country where it might be less expensive to operate.
He says one key consideration is the relatively high U.S. corporate tax rate, adding, "If you look at federal tax rates for businesses like ours, once you get over the minimums, you’re paying over 35% on the federal. Our board said, ‘why should we do anything here’?"
Ultimately, Weidmann decided to invest $40 million to upgrade the St. Johnsbury plant.
Goodrich credits former Governor Jim Douglas, legislators and local economic development officials for extending tax breaks to the company that made the investment feasible.
Weidmann’s federal tax liability was reduced through a program called the New Markets Tax Credit, administered by Housing Vermont. It’s designed to bring in investments and retain jobs.
Goodrich says without that help, one of St. Johnsbury’s largest employers would have eventually moved its jobs somewhere else.
"This facility would have dwindled," he says. "We would have been looking at anybody interested in buying."