Alien Technology confirms Fargo plant closing
FARGO - The lights have gone out on what was once considered a beacon for economic development in Fargo.
Alien Technology, the California-based "smart tag" manufacturer, confirmed plans Thursday to close its Fargo inlay manufacturing plant in the North Dakota Sate University Research and Technology Park by early June.
The closure is due to an inconsistent economy and lower demand, said Victor Vega, Alien Technology's marketing director. The company expects to decide whether the closure will be permanent in the next few months, he said.
Alien broke ground on its 50,000-square-foot plant in October 2005. It was backed with millions in taxpayer dollars and private funds.
Smart tags are radio-frequency identification tags - or microchips the size of pepper flakes - used in industries such as retail, manufacturing, defense and pharmaceuticals. The tags are embedded in packaging and can track everything from a product's expiration date to where it was made.
Alien Technology's goal was to revolutionize the retail sector by replacing bar codes with RFID tags. The Fargo plant was expected to produce more than 10 billion tags per year at full capacity, which it never reached.
"The adoption of their technology has been at issue, too, even before the overall slowdown of the global economy," said Brian Walters, president of the Greater Fargo Moorhead Economic Development Corp.
As NDSU and city leaders worked to lure Alien to Fargo, they stressed the possibility of high-paying jobs that would help keep youths in North Dakota. They also touted the opportunities Alien would bring for other high-tech plants to locate here.
"There were higher expectations on the front end five, six years ago where we thought RFID would be," said Tony Grindberg, executive director of the NDSU Research and Technology Park. "It's still an emerging technology."
"What was reported early on as far as job count was all based on the rate of adoption of RFID across the globe," Grindberg said.
Predictions in 2003 that the plant would produce 1,100 jobs and a $55 million payroll by the end of the decade never panned out.
In 2006, Alien Technology had 44 Fargo employees. There were 38 in 2007. In the past year, the number of employees fell to about 22, Walters said. Alien recently terminated six employees. The rest will be let go when the company closes in early June, Vega said.
Despite Alien's failure to reach its full potential, local officials say it was not a mistake to entice the company to locate here.
"Companies come and go every day," Grindberg said. "This doesn't say anything negative or set us back."
Walters agreed, saying Alien helped push forward the visibility of the community.
When Alien was attracted to Fargo, "it signified the start of a new era in terms of private, state, institutional and government partnerships," said NDSU President Joseph Chapman.
"We're determined to develop a vibrant, high-tech sector," he said. "When you do these things, you're going to have starts and stops and ups and downs, and that's just part of the high-tech start-up business."
The original intent in bringing Alien to Fargo was to attract high-tech research, new jobs and new industry, said Sen. Byron Dorgan, D-N.D.
"It never met the promise or the expectations," he said. "That particular company and its product were very much tied to the national economy."
Officials do not think Alien's closure will affect their ability to attract new businesses to the technology park.
"The Red River Valley Research Corridor has spawned a larger number of new and high-tech businesses during the past decade," Dorgan said. "There will be some inevitable failures, but many, many other new companies are healthy and growing and creating new jobs."
Alien shutdown at a glance
* Number of actual jobs being lost: About 20
* Annual property tax exemption value: $82,500
* Building square footage: 36,238
* Total incentive package to attract Alien: $36 million