John B. Marek is a writer, farmer, outdoorsman and recovering economic developer. You can find his books at johnbmarek.com.
It’s Halloween, 1990. “Ice, Ice Baby” is the No. 1 song in the country, “Rosanne” is the most popular show on television, the Cincinnati Reds have just completed an unlikely World Series win over the Oakland A’s and northwest Ohio has announced one of its most significant economic development wins in decades. An Australian truck manufacturer has committed $250 million to build a 750,000-square-foot factory in the Toledo suburb of Northwood to make a pickup truck called a Kelpie Kargo. That’s the equivalent of a $600 million project today.
Although I was still years away from my career as a local economic developer, I followed the Kelpie project closely. I was the sales manager for an auto parts supplier, so I viewed them as a potential customer, and if the Kargo was a success, who knows, there might be a job opportunity for me down the road.
Northwood, as its name suggests, is in the northern part of Wood County, across the Maumee River from downtown Toledo. Bowling Green, where I lived then, was the county seat, so although the project location was touted as “Toledo,” the economic development perspective was more nuanced.
As details about Kelpie and the Kargo truck began circulating after the announcement, some of the initial excitement began to wane. Kelpie did not actually build a pickup truck. In their native Australia, they purchased stock Dodge Dakota pickups and retrofitted them with a “drop-bed” that could be hydraulically lowered to ground level for loading and unloading. This involved extensive modifications to the drivetrain and frame.
The Northwood factory, on the other hand, would get a partially assembled Dakota from the Chrysler plant in Warren, Mich., about two hours away. This would significantly decrease the cost of modifying the vehicle and allow the U.S. version to sell for around $18,000. A new Dodge Dakota sold for about $14,000 at the time. Kelpie projected annual sales of around 50,000 units per year.
The idea of a consumer pickup truck with a drop bed wasn’t necessarily bad – you can see how it might have been useful for small businesses and sportsmen – but the devil, as they say, is in the details. The design required the removal of the rear axle, making the Kargo essentially a front-wheel drive pickup truck, which is not ideal, to say the least. The modifications to the frame also meant that the rear end flexed far more than a regular vehicle, necessitating the addition of a roll bar. These compromises would likely have limited the market for the vehicle.
Of course, we never found out because no Kelpie Kargo was ever built in Northwood. The factory, the investment and the 1,700 jobs never materialized. The project lost momentum, fizzled and eventually dissipated into the mist. The official death knell came in 1992 when the SEC (the regulatory body, not the football conference) shot down Kelpie’s financing scheme, but the writing was on the wall long before that.
As a general rule, local economic development in the early ’90s was not as sophisticated or professional as it is today. Many communities did not employ a dedicated economic developer and those that did often recruited them from the ranks of planning or administration. Few local developers had any formal training or certification. In that environment, communities often took the word of the prospect on factors such as jobs and investment. When you actually break down the Kelpie numbers, they don’t make much sense.
All that aside, it would have been interesting to see how the Kargo was received in the U.S. market and how a project of that scale would have impacted the economy of rural northwest Ohio.