Manufacturing plant decides against building in Cuero
July 25, 2012 at 2:25 a.m.
Updated July 26, 2012 at 2:26 a.m.
CUERO - The promised 100 jobs are not coming to Cuero.
In February 2010, Texas Gov. Rick Perry came to Cuero to announce that SIPCO Mechanical Linkage Solutions, a gear products manufacturer, would open a facility in Cuero.
The state was investing $300,000 from the Texas Enterprise Fund to bring the facility to Cuero.
The governor announced at the time that the company would make a $6 million investment and eventually bring 100 new jobs to Cuero.
But it's not going to happen. No one has been hired and the multi-million dollar investment in the building, machinery and equipment never took place.
"SIPCO has indicated that it is not economically feasible to move forward with the proposed expansion in Cuero at this time due to the downturn in wind energy," said Randall Malik, executive director of the Cuero Development Corporation, citing a recent letter from the company.
None of the Texas Enterprises Fund money was dispersed to SIPCO, nor did the city of Cuero spend any money on the anticipated facility, Malik said.
Winds of change
According to SIPCO, the pending expiration of the federal wind energy tax credit has changed the landscape of the manufacturing of one of its major products, said Malik.
In addition the market in Europe, where SIPCO has a presence, is also suffering because of the cutting of wind and solar energy subsidies, Malik explained.
According to a June article in the Denver Business Journal, the U.S. market for wind turbines is likely to fall by 80 percent in 2013 if Congress allows a federal production tax credit to expire later this year.
"SIPCO has indicated that the domestic wind turbine production backlog has all but dried up and turbine manufacturers are focusing on eliminating inventories," Malik said.
Attorney E. F. Mano DeAyala, who represents SIPCO, said, "A number of factors influenced SIPCO's decision not to expand its business in Cuero.
"For the most part, our wind division (where we make component parts used to drive wind turbines) has contracted. As the federal government has indicated, it will not renew the federal tax credit beyond 2012 allowing wind power providers to justify purchasing new wind turbines, the domestic wind turbine demand has plummeted.
Other issues concerning the condition of the property also influenced the company's decision," he said.
Malik said he knew of no complaints about the property. In fact, after SIPCO announced it was not coming to Cuero, the building that it had planned to move into, a large warehouse known as the "Coca-Cola" building behind Walmart on Industrial Boulevard, was purchased by the Cuero Development Corporation from the city of Cuero and the Cuero Industrial Foundation.
"The Cuero Development Corporation has greater flexibility in selling property and is not subject to the public bidding requirements that municipalities are held to," Malik said.
"We have already begun to notify industrial site selectors and manufacturing companies that the property is now available for purchase.
"We are confident that with the tremendous state of the economy in the region, we will be able to recruit a quality manufacturing business into the facility," said Malik.