Michelin Development Fund cushions blow of job loss in northern Nova Scotia
Job-starting program forecast to create another 147 jobs over the next five years
Michelin Tire says a small-business loan fund it created to cushion the blow caused by a large lay off at one its Nova Scotia plants has created 74 jobs with another 147 expected over the next five years.
Michelin Development Fund president John Tully said the goal is to make up for the jobs lost in northern Nova Scotia when the French tire giant closed a tire line at its plant at Granton, Pictou County.
"We knew the communities surrounding that plant would be impacted by that decision, so we are trying to create jobs to put back in those communities," Tully said from the company's North American headquarters in Greenville, South Carolina.
"We are certainly well on our way to doing that over the five-year period."
Michelin isn't there yet. The company said it would eliminate 500 jobs when it announced the closure of its small tire line in March 2014.
Truro phone repair business dials in
One of the newly created jobs is in Truro, N.S., where Stephen Payne has gone from selling phones to repairing them at his company, Colchester Phone Repair. He opened in October, one of 15 businesses funded since June.
Payne received a low-interest loan (prime plus two per cent) of $40,000 based on a business plan to create two or three jobs over the next five years.
"Without the Michelin Development Fund and the CBDC, it's questionable whether we would be standing here talking right now. They helped me with my idea and helped me run with it," the married father of three said.
He knew from his days in retail there was a demand to repair cracked screens and replace batteries in the ubiquitous devices, but no bank was interested. The Michelin Fund requires applicants to first try to get a loan from a commercial bank.
"They were very polite about it, but it wasn't a venture they were looking for," Payne said.
How it works
The Michelin Development Fund is a partnership with Bergengren Credit Union of Antigonish and non-profit community development corporations in northern Nova Scotia. Each have committed $2 million to the fund.
Michelin says the partnership has enabled this to be the largest of four community development programs it runs in North America.
"The terms are really good for a start up. It's a dream," said Chantale Hache of Pictou County's Northern Opportunities For Business, a government business development corporation.
In addition to the low-interest loan, the first six months of repayments are interest-only.
Hache says businesses also receive training, access to consultants and on-going support on a variety of fronts like marketing or human resources.
"They provided a bunch of help in all the areas I needed," said Payne. "Developing a business plan, financial projections — things that I wouldn't have a lot of background in, they were right there to step up and help with."
Since November 2014, the Michelin Fund has handed out $1.8 million in 33 loans.
It'll lend up to $300,000 and only to existing small-businesses and start-ups in Pictou, Antigonish, Colchester and Guysborough counties.
When Tully set up the fund, he ran a postal code search on where Michelin Granton plant employees come form.
"So we know that when we are creating jobs and helping small businesses, we are impacting communities where our employees came from. And that's how we arrived at the four county geography that we are using in Nova Scotia," Tully said.