Precor is expanding amid the worst economic crisis in recent memory — but not anywhere near its Woodinville headquarters.

Share story

Precor is expanding amid the worst economic crisis in recent memory — but not anywhere near its Woodinville headquarters.

The fitness-equipment maker will build a manufacturing plant in Greensboro, N.C., creating 142 jobs over the next three years.

The move is part of a long-running southeastward ho among major West Coast manufacturers eager to tap lucrative markets east of the Rockies and a more docile labor pool. Precor, which will continue manufacturing equipment in Woodinville, will close a California plant after it builds the Greensboro facility. It will be cheaper to ship its goods along the East Coast and to Europe from there.

“We need to be closer,” spokesman Jim Zahniser said. “We’re shipping a lot of steel.”

Other local companies have been down the same path.

In 2007 Paccar picked Columbus, Miss., for a $400 million engine plant. The Bellevue-based truck manufacturer will shut down highway-truck production at its Renton plant in January, cutting 430 jobs, but will continue the same type of manufacturing in Ohio and Canada. A union official was told by the company that it is cheaper to operate there.

Boeing, the biggest manufacturer in the region, also selected partners for its 787 program that built plants in the South, even though it assembles its planes here.

“In general, the driver behind this relocation is unionized labor and minimum wage,” said Ali Tarhouni, an economics lecturer at the University of Washington.

That said, the Seattle area is a magnet for highly specialized and-well paid labor — of the sort that creates video games and advanced biotechnology drugs.

“It’s still an attractive place,” Tarhouni said. “It’s a question of what type of industry.”

Precor says Greensboro is an ideal location for its new plant because it is closer to its Eastern U.S. and European markets. It’s in the Interstate 85 corridor, which connects Northern Virginia to southern hubs such as Atlanta.

The region has a strong manufacturing presence, and in the past two years attracted companies like Lenovo and HondaJet, meaning there’s a pool of skilled workers for Precor to draw from.

Greensboro is the center of major national distribution networks. FedEx Ground plans to build a facility there, and auto-parts dealer O’Reilly Automotive will in 2011 open its East Coast distribution center there as well.

“There are some really big distribution networks that have been built up in what seem to be unlikely places — like Atlanta,” said Cynthia Kroll, an economist with the Fisher Center of Real Estate and Urban Economics at the University of California, Berkeley.

North Carolina really wanted Precor’s business. The state and local governments are providing the company with about $1.2 million in benefits, including grants and tax credits, over a three-year period, Zahniser said.

That incentive package is typical of southern states that Kroll says are hungrier for manufacturing jobs than their cousins up north.

The phenomenon began in the 1970s and ’80s, as textile mills and small-appliances manufacturers began heading south. It was not always a positive development for the communities — as in some cases they give up significant tax income only to see the companies leave for Asia or other cheap destinations.

But lucrative new jobs are hard to pass up. In the past two years, Greensboro has attracted more than $470 million in investments, resulting in 2,400 new jobs.

“We’re extremely competitive,” said Dan Lynch, president of the Greensboro Economic Development Alliance.

Ángel González: 206-515-5644 or agonzalez@seattletimes.com