Cliff Holste, Materials Handling Editor

As Intelligrated continues forward with its integration of FKI Logistex after acquiring the North and South American FKI business of from Melrose plc in May of this year, Intelligrated just accepted Ohio’s $24 million incentive package to secure 537 existing jobs at three Ohio plants and create at least 267 more over the next three year – with union concessions key to the deal.

SCDigest Says:

Officials of the Ironworkers Shopmens Local 522 put forth an agreement based on a six-year contract that includes a graduated wage scale for new hires.. What Do You Say? Click Here to Send Us Your Comments

The announcement underscores some of the interesting aspects of the acquisition, in which Intelligrated acquired a company much larger than itself.  The top two Intelligrated executives, as well as number of mid-level managers, at one point worked for FKI or its predecessor company Pinnacle Automation.  After the FKI acquisition of Pinnacle in January of 2000, Chris Cole (now Intelligrated’s CEO) and Jim McCarthy (President) started Intelligrated just a few months later. The Intelligrated headquarters is within just a few miles of an FKI plant and major office complex. This provided the opportunity to consolidate office and production functions with modes impact on operations – a key synergy in the deal. 

The acquisition also left Intelligrated with three production facilities within a short radius – two in Ohio, and one in Kentucky. With this deal, it now appears the Danville, KY facility is the odd one out. An interesting part of this story is concessions made by union officials. The FKI manufacturing operation in West Chester, OH, which employs about 300 union workers, was planned to be closed due to its higher labor cost structure as compared to the FKI non-union operation in Danville.

However, officials of the Ironworkers Shopmens Local 522 put forth an agreement based on a six-year contract that includes a graduated wage scale for new hires. That, plus the Ohio incentives, was apparently enough to seal the deal. Chris Cole, Intelligrated CEO, said the labor agreement paved the way for securing the state incentives which in addition to job creation tax credits, state loans and workforce assistance, includes a $5.6 million state enterprise loan to the Butler County Port Authority to acquire the West Chester plant and then lease it back to Intelligrated, which will then use the proceeds to fund its expansion plans. 

Intelligrated, until its merger with FKI, had been primarily a conveyor and sortation system provider. With the acquisition, its product offerings have expanded to include automatic case palletizers, pick-to-light systems, tilt tray sorters, and expanded software and controls capabilities. "The acquisition significantly expanded Intelligrated's product line, opening additional product markets and giving the company solutions for additional sectors, such as manufacturing.

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