Van maker repays state grant after Pittsylvania layoffs

Morgan Olson has paid back a $500,000 Virginia Port Authority grant after the Michigan-based manufacturer of walk-in step vans failed to employ an agreed-upon number of workers at its facility at the Cane Creek Centre Industrial Park in Pittsylvania County.

It’s not the jubilant future economic developers had envisioned when celebrating the company’s October 2019 announcement of plans to invest $57.8 million to bring its operations to a former Ikea facility at the park located outside Danville. At that time, the company, which is a business unit of Texas-based JB Poindexter & Co., expected to create 703 jobs.

By summer 2020, Morgan Olson had its 925,000-square-foot automotive manufacturing facility operating in Pittsylvania.

Two years later, the Port of Virginia awarded Morgan Olson a $500,000 Port of Virginia Economic and Infrastructure Development Grant, an incentive designed to encourage businesses to locate maritime-related employment centers in the commonwealth or to expand existing facilities. At that time, the company was well on its way to building its promised workforce in Virginia. The Pittsylvania facility employed 612 workers in October 2022, according to a news report.

But circumstances change. Morgan Olson laid off 435 employees at Cane Creek Centre in 2023 and an additional 130 this August, according to the Virginia Economic Development Partnership. Currently, there’s only “limited staff there in the facility,” according to Matt Rowe, director of economic development for Pittsylvania County.

On Sept. 25, Stephen Edwards, CEO and executive director of the Virginia Port Authority, which runs the Port of Virginia, sent a letter to Greg Pairitz, vice president and chief financial officer of Morgan Olson, asking for the state grant to be repaid due to failure to comply with “one of more” obligations agreed to in a memorandum of understanding.

“The VPA has determined that Morgan Olson has failed to maintain at least 25 new, permanent full-time positions prior to the performance date of June, 30, 2025,” the letter states.

Edwards gave Morgan Olson 60 days to repay the money. The company repaid the funds on Nov. 20, according to Joe Harris, a spokesperson for the VPA.

A request for comment to a spokesperson for Morgan Olson was not immediately returned.

Rowe on Tuesday remained optimistic about the situation.

“I think the fact that Morgan Olson just came and immediately paid back the $500,000 to Virginia is a very strong testament to them as a company,” he said. “I think it also speaks very strongly to their financial well-being and [to] their commitment to Virginia.”

Rowe speculated that the Morgan Olson facility could have a second chapter. “There’s certain contracts that can’t be publicly discussed that Morgan Olson is negotiating,” he says.

If the Cane Creek facility isn’t occupied by the van maker, Rowe suggested JB Poindexter & Co. could find another use for it.

“The value proposition to the parent company is just too strong for them to not utilize that space,” he says.

In regular talks with Morgan Olson leaders, Rowe said, “they have stressed over and over again that they’re committed to this community, to this facility.”

Rowe speculated that the layoffs were due to Morgan Olson losing a key client. The popularity of electric vehicles and high interest rates, he thinks, could also have impacted customer demand for the company’s custom commercial step vans.

“When the interest rates are high, you tend to make do with what you have, or repair what you have, instead of going and buying something,” he says.

A 2019 announcement about the facility noted Morgan Olson was eligible for several state and local grants, including a $7 million custom performance grant from the General Assembly’s Major Employment and Investment Project Approval Commission and $1.195 million from the Tobacco Region Opportunity Fund.

Jordan Butler, public relations director for the Virginia Tobacco Region Revitalization Commission, said on Wednesday that the commission paid $770,775 of those funds to Morgan Olson in May 2024 for creating 561 jobs. Company leaders could have requested the remainder of the funds at the end of September, he noted, if they had created 703 jobs at the Pittsylvania County facility. 

The commission changed grant agreements several years ago, Butler added, to require that the created jobs are maintained throughout the performance period and are only dispersed once at the end of the performance period. “So good news is that that this situation couldn’t occur again,” he said.

A spokesperson for VEDP did not immediately respond to a request for comment Tuesday.

Editor’s note: This story has been updated to include information about the Tobacco Regional Opportunity Fund.