BIDDEFORD (WGME) — While the state says job growth is booming, Maine is seeing another trend not obvious on the surface: a number of family companies are moving out-of-state.
“Went to North Carolina, some went to Mexico,” third-generation business owner Derek Volk said.
While Volk chooses to keep his company, Volk Packaging, in Biddeford, he says those around him are leaving the state.
“Bangor Hydro, CMP, Kris-Way Trucking, Augusta Fuel, it’s a very long list,” Maine Jobs Council Chair Joe Edwards said.
Edwards handed the I-Team a list, to his recollection, of departing businesses.
“There’s 50 or 60 of them within my knowledge. I mean, I’m just one attorney dealing with just a few hundred,” Edwards said.
The list is made up of all Maine names we’ve come to know but are no longer Maine-owned.
“Why would you be concerned about businesses being bought out of state?” CBS13 I-Team Reporter Stephanie Grindley said.
“Well, when a business gets sold out of state, a lot of things happen that aren’t really evident, at least on the surface,” Edwards said. “Typically the top salaries are eliminated. The management is done by out-of-state companies.”
Top salaries, Edwards says, will take their top taxes with them.
“It’s a ripple effect,” Volk said.
From his own list of customers, Volk estimates he’s lost well over $3 million in sales to companies moving.
“I can tell you that when a customer sells to a bigger company, we just start a stopwatch and wait until they leave,” Volk said.
He believes Maine’s taxes, workers’ comp, high labor costs and paid family leave are some of the reasons businesses move their headquarters to neighboring states.
“That makes it very difficult for businesses to be competitive,” Volk said.
While Derek Volk chooses to keep his company, Volk Packaging, in Biddeford, he says those around him are leaving the state. (WGME)
Volk is a member of the Institute for Family-Owned Business, who we reached out to for input on this story. He says many other small business owners he’s met through the group feel the same way as he does.
The I-Team brought these concerns to the commissioner of Maine’s Department of Economic and Community Development, Heather Johnson.
“We love local headquarters. We have great companies like IDEXX and L.L. Bean,” Johnson said.
It turns out, the state does not specifically track acquisitions of Maine businesses. So, we asked the commissioner about that list from the Maine Jobs Council.
“When you see a number of businesses leaving the state, being acquired by out-of-state companies, is that a concern to your department?” Grindley said.
“Obviously, as companies move, we’re always concerned,” Johnson said. “We don’t want anybody to leave and we want new people to come. So, we never want to see that, but we also see a lot of growth. We saw 15,000 net new companies last year.”
Johnson says the list provided by the Maine Jobs Council is just one indicator of the ebbs and flows of capital investment. According to the state, new businesses need to start thinking about global climate solutions in order to pave a longer runway in Maine. But aside from the new businesses, for the businesses that have been around for generations, it’s a time of transition.
“We do live in a global economy and capital comes from a lot of places. When you look at Maine businesses, a lot of them are looking at a logical place to transition,” Johnson said. “So, we’re seeing major companies transition into employee-owned.”
While the state says job growth is booming, Maine is seeing another trend not obvious on the surface: a number of family companies are moving out-of-state. (WGME)
Volk says that is the obvious next step for his company.
“It’s not just my succession plan, I have to think about everybody’s succession plan,” Volk said.
“What do you think would change the most for Volk Packaging if it was acquired?” Grindley said.
“Probably the biggest change would be the culture. We’re a family business. We run it like a family business,” Volk said. “This year will be our 49th year sponsoring Little League. If I sold to International Paper, for example, do you think they’re sponsoring five Little League teams? Probably not.”
The CBS13 I-Team asked the state if there are any efforts to keep businesses in Maine.
Johnson touched on the new tax incentive plan, Dirigo Business, that passed last session. She says it opens up capital investment opportunities, which gives tax breaks to companies that invest or expand in our communities.
Read the article on CBS13 WGME: Click Here
