Mississippi’s state auditor says that Viking Range’s former and current owners have paid over the past nine years $2.5 million in penalties to the state for failing to live up to job-creation promises.
The details of those penalties against the Greenwood-based manufacturer of high-end kitchen appliances were outlined in a performance audit released Thursday by State Auditor Stacey Pickering.
In July 2005, according to the report, the Mississippi Development Authority and Viking signed a memo of understanding granting $3 million to the company to assist in constructing a dishwasher manufacturing facility.
In exchange for the grant, Viking agreed to make a $10 million capital investment and create and maintain 250 jobs for five years in addition to the approximately 1,150 employees Viking employed at the time.
Viking ended up investing more than $15 million, fulfilling that part of the agreement, but was unable to create the additional 250 jobs required by the state.
Viking paid a $312,000 penalty in January 2009.
The memo of understanding was amended twice, first in 2009 then again in 2012, giving Viking more time to live up to the job requirement. When the company failed in 2011 to meet the requirement, it paid $396,000 to the state in quarterly installments.
In late 2012, Viking was purchased by the Middleby Corp., its current owner, and subsequently suffered several additional rounds of layoffs.
By 2015, according to the audit report, whatever jobs had been initially created by the project had been eliminated. Middleby paid a penalty of $600,000 for the 2015 default.
Then, last June, MDA sent another letter of default to Middleby, saying the company failed again to meet the job-creation requirement in 2016 and 2017. Viking paid $1.2 million for those defaults.
The $3 million grant is not subject to any additional penalties, the auditor’s report said.
Last August, however, Middleby was required to pay a default penalty of $13,300 on a separate incentive package.
The company has received $2.3 million for equipment upgrades through a $5 million bond issue approved by the Legislature in 2015.
Initially, the grant required Middleby to make a $20 million capital investment in its Mississippi operation, but a change in state statute in 2016 lowered that obligation to $5 million. The agreement still required the company to maintain at least 400 employees in Mississippi.
As of numbers reported in 2017, Viking’s total employment in Mississippi had dropped to 391 –— with 366 at its manufacturing facilities and the other 35 in its hospitality sidelines.
Middleby remains currently in default on this grant and will remain subject to additional penalties, according to Logan Reeves, a spokesman for the state auditor.
Viking President Kevin Brown could not be immediately reached for comment.
The audit report recommended that “MDA closely monitor the situation to ensure Middleby is adhering to its original memo of understanding, to minimize or eliminate future defaults.”
•Contact Kathryn Eastburn at 581-7235 or keastburn@gwcommonwealth.com.
Viking performance audit
