Parts firm to occupy Bluebird bus plant

Parts firm to occupy Bluebird bus plant

June 1st, 2012 by Tim Omarzu in Business Around the Region

Plant Manager Michael Phillips shows off his machine shop, welding and fabricating business at 530 Mission Ridge Road in Rossville. The family-owned Phillips Bros. Machine Co. plans to move into the former Bluebird school bus manufacturing plant in LaFayette, Ga.

Photo by Tim Omarzu /Times Free Press.

ROSSVILLE, Ga. - The Phillips Bros. Machine Co. hasn't gotten much media attention in its 37 years.

The only coverage that Plant Manager Michael Phillips can remember was when a TV news crew stopped by to interview an employee who had undergone gastric bypass surgery.

A higher profile is likely, since the family-owned heavy equipment parts manufacturer is leaving its roughly 50,000 square feet of space in Rossville and spending some $3 million to buy the 280,000-square-foot former Bluebird school bus manufacturing plant in LaFayette, Ga.

"We're walking over each other right now," Phillips said of the crowded conditions at his family's machine, welding and fabrication shop, which is in two metal-sided buildings at 530 Mission Ridge Road and a third building on McFarland Avenue.

Demand has doubled in the past four years for Phillips Bros.' products, he said. One of its biggest accounts is making arms that lift trash cans into garbage trucks for the Heil garbage truck manufacturing plant in Fort Payne, Ala.

Other customers include the Alstom generator plant in Chattanooga.

U.S. manufacturers are choosing domestic suppliers, Phillips said, because a Chinese parts maker might require 12 to 16 weeks' lead time for an order.

"A lot of companies, they're starting pulling stuff back into the United States, not so much because of quality, but of lead time," he said. "I can give a two-week lead time."

Phillips expects to hire 10 to 15 employees right away. He hopes to eventually introduce more products and hire more employees.

To help Phillips Bros. buy the former Bluebird plant, the Walker County Development Authority on Thursday filed paperwork in Walker County Superior Court to issue $3 million in 20-year bonds financed through the Bank of LaFayette. A superior court judge will review the bond proposal in public on June 19.

Phillips Bros. will buy the plant and the development authority will own the 85 remaining acres. Phillips Bros. will have the first right of refusal to buy the 85 acres, if it needs it for expansion.

The county doesn't pay anything out of pocket for the bonds used to buy the Bluebird plant, County Attorney Don Oliver said. Phillips Bros. will be paying the mortgage.

The purpose behind the development authority issuing bonds is to keep the property off the property tax rolls for 10 years to provide an incentive for the company to move into the Bluebird plant.

"This is something the county has done over and over," Oliver said, citing employers including the GE Roper stove plant, Nissan brake plant and former Bluebird plant as benefiting in the past.

In the worst-case scenario, if Phillips Bros. went broke, the county would take ownership of the plant -- which would be a good deal, since it's been appraised as being worth $5 million, Oliver said. In the very worst-case scenario, property owners would be on the hook for a 1 mill tax increase to cover the bonds -- but that's never happened since the county office of economic development was created in 1965.

"We've been doing this for 47 years, now, and never had a glitch," Oliver said, adding that county officials have been "uber-conservative and uber-careful" in selecting financially sound businesses to support.

Larry Brooks, executive director of the Walker County Office of Economic Development, said county officials have been working for about eight months to move Phillips Bros. into the plant that Bluebird owns.

"He's just built his business on quality work and good reputation," Brooks said of Phillips Bros.