Tool company won't expand

Black & Decker scraps plans for new Towson office

`It's indefinitely shelved'

February 02, 2002|By Kristine Henry | Kristine Henry,SUN STAFF

Black & Decker Corp. said yesterday that the weak economy and its sagging earnings have forced it to scrap plans to expand its Towson headquarters and add more than 300 jobs.

The toolmaker said it has turned down a $9.5 million package from the state and Baltimore County to help pay for the expansion and added jobs. Black & Decker was promised the loans, grants and tax breaks in October 2000 after indicating that without attractive incentives it might move its headquarters out of Maryland.

"It's indefinitely shelved," said Barbara Lucas, the toolmaker's senior vice president of public affairs and corporate secretary. "We do have the architectural plans but there is no foreseeable plan to act on them."

This week, Black & Decker announced it would cut 450 positions at its plant in Easton and another 2,000 jobs elsewhere in the United States and the United Kingdom as part of a plan to shift production to nations where labor costs are cheaper. It has laid off employees at its headquarters on Joppa Road.

That announcement came as Black & Decker reported its fifth consecutive quarter of lower sales and earnings.

The company said yesterday that it's too soon to say when the expansion might move ahead, but Lucas said that when it does, she assumes the company will again choose to stay in Towson, where it has been since 1917.

"But I can't imagine, given the current circumstances, that we would [expand] in the next year or two," Lucas said. "That would be pure speculation."

The company had planned to build a seven-story, 180,000-square-foot office building and four-level parking garage. Black & Decker leases space in another Towson-area office park and had wanted to consolidate most of those operations into its Joppa Road location.

The state offered to provide a $5 million loan for the project, plus job-creation tax credits of $340,000 and a $200,000 grant to train new workers. Baltimore County was to provide an additional $4 million in tax credits over 10 years.

The state incentives were predicated on the company creating 340 new jobs in Towson over five to seven years on top of the 1,300 to 1,400 employed there at the time. Instead, through attrition and about 80 layoffs over the past year, Black & Decker now has about 1,200 people in Towson.

Employment levels at the Eastern Shore plant would not have been affected by the incentives.

"We were disappointed [that the expansion was shelved] but understanding the current business environment we weren't totally surprised," said Robert C. Brennan, the assistant secretary for financing programs at the state's department of business and economic development. "We suspect that Black & Decker, being a resilient business, that they'll be back to us with something bigger and better."

Should that occur, the negotiations would have to start from scratch. Brennan said that keeping Black & Decker and adding jobs would be "a very valuable transition to the state" but that the process could not just pick up where it left off.

"This isn't a menu where you say `Give me a 1-A,' " he said. "They have to redefine what they want to do and we would negotiate the level of assistance we could do. But we look forward to sitting down with them again when they're ready to roll."

But Black & Decker will automatically enjoy county tax breaks if it expands because local officials redrew the Towson Commercial Revitalization District to include the toolmaker's headquarters.

The district exempts businesses from taxes resulting from improvements for five to 10 years.

Robert L. Hannon, executive director of the Baltimore County Department of Economic Development, said he thinks the expansion will happen at some point.

"They pay me to be confident and optimistic," he said. "There is no doubt in my mind that as the national and international business circumstances improve that Black & Decker will come back to this issue and we expect them to follow through on their plans to expand the campus."

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