Flanders bumps CEO | Eastern North Carolina Now

    Publisher's Note: This article originally appeared in the Beaufort Observer.

    Reliable source tell us there is a big shakeup going on at Flanders Filters, one of Beaufort County's largest manufacturing employers. Sources confirm that there was an employee meeting called this morning (6-27-14) and it was announced that CEO Harry Smith has been replaced by Peter Jones. The announcement was that Smith would step down to be Vice Chairman. Our sources also tell us that other key top management changes have been made recently.

    In addition, the Observer has received several reader comments about Flanders and its associated entities in the Washington Industrial Park, Pronamics and Oak Ridge, both of whom did a deal with Beaufort County to acquire property in the Industrial Park. Some of those comments have been:

    •   Blue Goose/Flanders

    February 24, 2013 | 02:51 PM

    Several individuals involved in the sale of Flanders last year found their already deep pockets to be even deeper and heavier. And we all know who they can expect a visit from - the IRS Taxman cometh.

    Documents filed with Dept. of Commerce are quite clear of Flanders support and involvement in the companies that comprise the Blue Goose. The Blue Goose founded by Flanders executives is made up of two separate, although united, companies - Pronamic Industries and Oak Ridge Metal Works. Neither one can claim more than one employee.

    Flanders Corp. is a leading manufacturer in the filtration industry and is working directly with Pronamic to be an alternate source for two core product lines.

    Flanders has awarded a multi-million dollar (8 to 10) purchase agreement to the Blue Goose (Pronamic).

    Pronamic claims to have designed several machines in it's short history (4 months) and is working on getting patents. So, does that mean the equipment exists and is stored at Flanders? If not, how long will it take to get this equipment operational?

    And in the meantime, who is footing the bill?

    (source: documents filed with Dept. of Commerce)

    The Truth Squad

    • Know who you are dealing with

    March 15, 2013 | 07:33 AM

    The same people who run Flanders run these companies. Flanders is cutting back and laying off. There are no "new" jobs here. Check it out. This jobs thingy is a shell game.

    Know too much

    • Flanders. BlueGoose. Subsidy Sump

    March 15, 2013 | 07:40 AM

    The rumored explanation most favorable to this grant is that in the distant past Flanders did, at one time, produce the inputs that it will now be buying from Blue Goose. However, at some point Flanders ceased producing these items internally and began to purchase them from a handful of outside manufacturers. Over time these outside suppliers closed down and Flanders was confronted with rising procurement prices due to less competition existing among its sources of supply.

    In order to resolve this problem of limited suppliers and rising input prices Flanders has entered a five year contract with Blue Goose to produce these goods at the industrial park.

    In effect, under this scenario, these jobs were going to be created either through Flanders reopening its own internal manufacturing division or by reaching an arrangement with a nearby satellite supplier.

    By choosing to create an arrangement with Blue Goose, Flanders has been able to find a free standing source of supply which takes advantage of the cost benefits of acquiring the price depressed, otherwise unsellable Quick Start II building and the low cost capital and financing provided by the government subsidy that was made available by virtue of the acquisition of property at the industrial park.

    In short, the jobs being created were inevitable and would have been created by the business requirements of Flander's own market driven strategies to meet procurement needs. However, the existence of the subsidy sump at the industrial park allowed these jobs and expansion in facility to be undertaken more advantageously through the use of subsidies.

    The Economic Development Commission has set in place damaging long term problems for Beaufort County taxpayers. The industrial parks are no more than failing schemes that encourage further expansion of needless subsidies.

    Warren Smith

    •  I agree with Warren Smith

    March 15, 2013 | 08:44 AM

    This deal sucks. Sure they need to get rid of the Blue Goose but Flanders/Blue Goose etc. would have "created" these jobs anyway. Furthermore, these commish's are always picking losers. But who do you think is attracted to gubmint welfare if it is not the businesses that can't make an honest living in the real world. Harry Smith should be ashamed of himself. No need for the commish's to be ashamed. I have enough to cover them all.

    Walter

    •   Flanders mafia

    June 24, 2014 | 09:53 AM

    Both of these companies were built by Boyd and Smith to siphon money off of the parent company Into their own pockets. Oakridge metal works charges almost 3x the going rate for its services to Flanders. Pronamic provides what I would consider the worst quality media in the industry and Flanders is forced to buy it. I work for Flanders and can honestly say through all my years of manufacturing I have never see such and obvious conflict of interest nor a more appalling corruption. Absolutely sickening. Shame on you Harry Smith and Kevin Boyd.

    Name withheld

    Editor's note: We have made repeated attempts to offer Mr. Boyd and Mr. Smith an opportunity to answer questions about issues surrounding Flanders and other entities with which they are associated. They have never returned our calls. It is our policy that if we make three attempts and get no response we will then proceed without their input. Considering the number of contacts we have had it is obvious to use this is a matter of public interest. Given the number of similar contacts we have received for current and former employees we have decided to begin publishing them but we will offer Mr. Boyd and Mr. Smith equal space to respond. We encourage them to do so.

    •   Anonymous has it right

    June 27, 2014 | 04:56 PM

    The siphon off of the Pronamics, Oak Ridge, Flanders, to the WalPat, Double B, and whatever other LLC/Corps that have not been discovered is unreal. To know that Flanders has been put on cash status by so many local businesses because they don't pay their bills on time (6 months late) but to know they can cut a check for a new car, truck, boat, tractor, etc with one day notice is sad. They move equipment, completely change manufacturing set ups, and fire employees without the slightest thought to how it will effect the remainder of its business plan(s).

    This is not a "good deal" for the county. This is a waste of money. Pronamics won't be in business 5 years from now. They just put indoor plumbing in that building within the last 2-3 months. So how long were the employees (illegals or not) using the bathroom in the woods or the one port a potty?

    Anonymous is also correct. Oak Ridge was created, in part, to break Flanders. By charging more for its labor and eliminating the metal shop at Flanders, Oak Ridge has hit the jack pot. Now we have Pronamics who is selling media to Flanders (made by illegeals) at an inflated price.

    Can't anyone besides the middle class working people connect the dots? Or did no one in Beaufort County care?

    AnonymousJr.

    You can review the memo to Flanders Employees from the Board of Directors by clicking here.

    Commentary

    We sincerely regret this news. Flanders is one of the most important employers left in Beaufort County in the manufacturing business. We have, in addition to the comments posted above, received numerous tips from current and former employees (most of whom were recently laid off) and from suppliers and vendors who sell to Flanders. Many of those suppliers say Flanders carries high accounts receivables on their books (what they are owed by Flanders) and some have cut Flanders back to a cash on delivery basis we are told. So the ripple effects of Flanders' "problems" run throughout Beaufort County.

    We especially regret this situation for the families of the Flanders et. al. employees and well as Flanders' supporters in the community. They deserve better treatment, at least in being dealt with forthrightly.

    But what has alarmed us about this is the way Flanders management has handled it. We have reached out to them on more than a half dozen occasions with questions and request for interviews. Not once has anyone from Flanders called us back much less agreed to answer our questions and provide information we feel Flanders has a public trust to provide the community.

    We are suspicious that the reason for the lack of transparency from Flanders is that they knew we would ask questions about the relationships between some of the principals of Flanders, Pronamics and Oak Ridge. Inherent in these interlocking relationships was the fact that some or all of them received tax payer subsidies for "job creation." We understand there has been no new net jobs created but rather a net decrease in total jobs. Given that the principals of these companies took taxpayer subsidies, we believe they have a moral and ethical duty to be transparent with the community. Flanders has not been, in our experience in trying to deal with them.

    We hope that Mr. Jones will provide more enlightened leadership of Flanders as a community citizen. And we sincerely wish him well. We wish Flanders much success.