Tempur-Pedic's 300-Worker Mattress Plant Bedding Down in New Mexico
by JACK LYNE, Site Selection Executive Editor of Interactive Publishing
ALBUQUERQUE, N.M. Mattress manufacturer Tempur-Pedic (www.tempurpedic.com) is settling in for a soft landing just outside Albuquerque, N.M., but it's carrying a heavyweight economic payload: The U.S. subsidiary of Sweden's Tempur World will build a $56-million, 530,000-sq.-ft. (47,700-sq.-m.) plant in the Land of Enchantment that will employ 300 workers.
Goodnight, Albuquerque: Mattress manufacturer Tempur-Pedic looked at 50 cities in the U.S. West before settling on Albuquerque (pictured) for its new plant.
Lexington, Ky.-based Tempur-Pedic had been searching for a new manufacturing site for six months, company officials said. Brisk U.S. demand for the company's products triggered that search, they explained. Capacity had been outstripped at Tempur-Pedic's lone existing North American plant, a 320,000 sq.-ft. (28,800-sq.-m.) facility in Duffield, Va.
"Demand is terrific," Tempur-Pedic's Vice President Paul Key said in announcing the project at the TVI Workforce Training Center in Albuquerque. "We have experienced a 47-percent annualized growth rate since we introduced the Tempur-Pedic Swedish Mattress to the North American market in 1992. We're opening 40 to 50 stores a month," said Key (who'll also manage the New Mexico plant).
Sleeping with the astronauts: Tempur-Pedic manufactures its mattresses using a material that was originally developed by NASA to ease the g-force impact on astronauts during liftoffs.
The company's site search was guided by the particularly strong demand for Tempur-Pedic products in the western United States. Fifty cities in the West were considered before the company settled on Albuquerque, Tempur-Pedic officials said.
"We found that Albuquerque and New Mexico rated best among the various factors we studied, including quality of labor, operating costs, electric reliability, transportation and leadership support," CEO Robert Trussell said.
Incentives Include IRBs,
The quality of New Mexico's incentives was also a factor, Trussell allowed.
Worker Training, Tax Credit
"Industrial revenue bonds and other incentives, as well as the quality of the site presented to us, were also important considerations in the final aspects of our decision," he said.
Bernalillo County will issue $56 million in industrial revenue bonds to finance the project. Tempur-Pedic alone is responsible for paying off the bond issue. In addition to the bond issue, the county will abate roughly two-thirds of the property taxes for 20 years on Tempur-Pedic's 50-acre (20-hectare) site. County officials didn't estimate the tax abatements' total value.
Gov. Bill Richardson (pictured), who negotiated with Tempur-Pedic officials, announced that the state is providing $1 million for worker training, as well as a state investment tax credit equal to 5 percent of the initial investment in equipment.
The state is also pitching in with its own incentives, Gov. Bill Richardson (D) said in Albuquerque.
Tempur-Pedic will receive some $1 million from New Mexico to subsidize worker training. In addition, a state investment tax credit will provide the company with a New Mexico income tax deduction equal to 5 percent of the investment in the facility's original equipment. Tempur-Pedic Company officials haven't yet estimated the value of the plant's initial equipment.
Site Lies Near I-40
Tempur-Pedic picked a site in Westland Business Center, a business park now being developed just north of I-40. Construction on the facility will begin in the spring of 2004, with the operation going online in September of 2005, Key said.
Tempur-Pedic's mattresses are made from a visco-elastic polyurethane foam. That material was originally developed by NASA's Ames Research Center in the early 1970s to ease the g-force impact on astronauts during liftoffs. The foam makes the mattresses conform more readily to sleepers' bodies.
The New Mexico plant will also manufacture pillows, Key said. Tempur-Pedic, which also sells products made in a plant in Aarup, Denmark, expects $480 million in sales in 2003, according to the company's projections.
Project Counteracts Area's Earlier Job Losses
The plant was particularly good news for Albuquerque after the area's recent job losses.
Philips Electronics last year
announced that it will be closing its 600-worker fab in the New Mexico city by the end of this year, a decision prompted by the need to reduce excess capacity, the company said. Soon after, John Hancock Financial Services announced that it was closing its 130-worker Albuquerque office in early 2003 in a cost-cutting move.
"This is a turning point in the city's economic development efforts," said Gary Tonjes, executive director of Albuquerque Economic Development (www.abq.org), which teamed in landing the project with the New Mexico Economic Development Department (www.edd.state.nm.us), and the economic development arms of Bernalillo County and Albuquerque. "We are reversing the job losses in Albuquerque and in the manufacturing sector."
Editor's note: Tempur-Pedic isn't the only mattress maker springing into a new facility. Is there a national trend toward more sleep? Read about it in North American Reports in the 50th Anniversary January 2004 edition of Site Selection.
PLEASE VISIT OUR SPONSOR CLICK ABOVE
Online Insider | Site Selection Online | SiteNet |
©2003 Conway Data, Inc. All rights reserved. SiteNet data is from many sources and is not warranted to be accurate or current.