Although staffed at a level higher than anticipated, Pacon Manufacturing in Brunswick County has requested a state extension because it is technically short on a hiring goal tied to a $700,000 public grant.
The contract manufacturer has 203 full-time employees as of this week, according to senior vice president Lawrence Shannon, and 135 temporary employees also working on a full-time basis. A state building reuse grant Pacon was awarded in 2019
required the manufacturer to have 238 full-time employees by April 2021.
“The workforce is starting to kind of reemerge and reengage,” Shannon said. “It’s nowhere near what it was in 2018, 2019.”
Last year, Pacon received a one-year extension that expired in April, and through the economic development agency Brunswick Business & Industry Development (BBID), applied for a second in June. The N.C. Department of Commerce is still considering Pacon’s request, according to department spokesperson David Rhoades.
Rhoades said the department has lately received several pandemic-related extension requests.
Pacon spent a year upgrading its new facility at 100 Quality Drive, a former U.S. Marine boatyard site, spending close to $2 million on the renovations, according to BBID director Bill Early. The grant date started at the time the business’s plans were announced in 2019, before Pacon could move in.
Pacon began operating in Leland at an equally opportune or inopportune time – depending on how you look at it.
The business makes products including Clorox disinfecting wipes and other pads, towels and liquids used by consumers and the medical and industrial sectors.
Its first official day in operation was May 1, 2020 – just as the pandemic was spreading stateside and the nation had developed a heightened wariness of contaminated surfaces.
“The whole timing was not our friend,” Shannon said. “It's like being on a fire drill for a year and a half.”
Using temporary workers was always part of Pacon’s plan, Shannon said. But difficulties in the labor market have made it challenging to fully onboard the numbers required by the state in the timeframe established, he said.
By utilizing local staffing agencies, Pacon has been able to onboard workers that are a good fit for the facility after a 90-day trial period. About 75% of its current workforce was hired this way, Shannon said.
“It’s a preferred method in the way that it allows us to bring people in without going through the extra steps that are necessary to make them permanent employees,” he said. “For us to do all that legwork and they come in on the second day and say, ‘You know, I don’t like standing up,’ we’ve wasted a lot of time and effort for that person.”
Full-time employees receive benefits, Shannon said. The average planned salary for employees was $31,273 in 2019.
Over 2020 and 2021, Pacon closed its facility in New Jersey as part of its move to Leland, its new domestic headquarters. Moving locations was part of a cost-benefit analysis, Shannon said. A perk of the new location is the region’s strong road transportation network, he said, particularly Interstate 140, which opened in 2017. “That made this whole area a lot more tenable for somebody like us, that has a significant amount, of tractor trailer movements in and out,” he said. “It made this area a little more accessible.”
Business surged as the pandemic spread. Early said demand prompted Pacon to use a section of the new facility it had initially planned to sublease and to lease additional warehouse space in New Hanover County. “Their business is much stronger than what they had projected,” he said.
Recent recession worries have lately started to calm things down, Shannon said. “That end marketplace has become very unaware of how to plan and stock because it’s not a normal demand cycle they are used to being able to look at,” he said. “There’s kind of a constant re-shifting.”
Shannon said he anticipates reaching the official state-required tally by the end of the year. If the state doesn’t authorize the extension, Pacon would be required to pay back some percentage of the $700,000 incentive, Early said. The company has already received the full amount tied to specific renovation-related invoices associated with upgrading the new facility, according to Early.
A separate $300,000 One North Carolina Fund grant tied to job-creation goals reaches its deadline in 2024.
Receiving the extension would be a benefit, Shannon said, but “it isn't the end of the world … We'll have the numbers. It's just a question of the timing.”