$4.2B Acquisition of Baldor Appears to Be on Schedule

by Robert Bell  on Monday, Jan. 24, 2011 12:00 am  

Kermit Kuehn, an economist at the University of Arkansas at Fort Smith, said only time would tell how the Baldor purchase would affect Fort Smith.

And while Baldor, along with a multitude of other manufacturers, took some hits in the recession, its net income and revenue seem to be on the upswing. Net income for 2009 was about $60 million on sales of $1.5 billion. That's down significantly from 2008, which set a record with income of $99 million on sales of nearly $2 billion.

For the first three quarters of 2010, Baldor's net income was $63.5 million on sales of $1.3 billion. Those figures represent year-over-year increases of 12 percent and 11 percent, respectively. And ABB estimates that Baldor's earnings will rebound in a big way, reaching 2008 levels by the end of 2011.

So what do all of these developments mean for Fort Smith and other cities with Baldor facilities?

"The short answer is, I suspect that five years from now, Baldor will look a lot like it does today, only larger and hopefully with more avenues for growth globally," Alaniz said.

Kuehn said that only time would tell, but he cited another instance in which a company with a Fort Smith facility was acquired. Nestlé bought Gerber in 2007 for $5.5 billion. In July, Nestlé announced it would expand its Fort Smith infant foods facility, adding 50 jobs.

"Although Gerber was not homegrown, it turned out that [Nestlé] invested more in our market," he said. "So all I can say is, those things, you never can read upfront as to how it's going to go." 

The same rule applies to the Baldor acquisition.

"As a community, my sense is that we're pretty much feeling good about it, that nothing is going to change," Kuehn said. "But again, that's really taking people at their word, so to speak, that this is going to add a few jobs or it's not going to lose any."

 

 

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