BY ADAM ATKINSON
North Country This Week

POTSDAM — Recent news that LC Drives is furloughing staff and that its proposed expansion to a factory on Route 56 is now in limbo came as a surprise to employees and local government officials.

However, the stall in production and the layoff will not affect the town’s plans or vision for a newly approved water and sewer districts on Route 56 where LC Drives had proposed a major manufacturing plant to produce its new innovative electric motors.

A source close to the company who declined to be identified told North Country This Week that a verbal announcement of the furlough was given to employees Monday at its space in the Shipley Center for Innovation, a business incubator run in downtown Potsdam by Clarkson University. A written announcement followed soon after.

Apparently the start-up company was nearing completion of negotiations for its series B funding round when the announcement was made. Koch Engineering Solutions provided the company $15 million in 2019 for its series A round.

LC Drives was working on developing a production line for its innovative electric motors, and the furlough announcement came as a surprise to the employees, the source said. The workers were told the furlough would give the company a chance to work out its long term financing.

Employees were told the furlough would last 1 to 2 weeks, but those working for the company are unsure if the situation will resolve in that time.

More than 100 people at all levels are employed by LC Drives with the majority working in Potsdam at Shipley and some based in Ballston Spa. All employees working for the firm have been furloughed, the source told North Country This Week.

Several requests for confirmation and comment on the furloughs and LC Drives' future plans from Devon Sutton, the company’s director of strategic operations, have been unanswered.

Town Supervisor Ann Carvill told North Country This Week Thursday (Sept. 2) that the town’s plans for the multi-million dollar districts on Route 56 have been under development for years and through several changes of leadership on the town board.

While LC Drives’ proposal to construct the factory in the district were discussed over the last year of hashing out details for the districts, the town never received a firm commitment from the company prior to approval of the districts this past year. Therefore plans were developed which did not account for the new plant in the final workup.

“LC Drives was by no means the driving force to move ahead to get the public approval of the water and sewer districts there,” Carvill said.

“It’s going to have no effect on us,” the supervisor said of the news the company was furloughing much of its workforce.

“The news (of the furloughs) was a surprise to me,” said Carvill. She added that she had no advance indication that the company would make the move to layoff its work staff.

Carvill said even though the company’s plans may be in a state of limbo currently, that the the districts will still benefit future development of the corridor to the north of the village.

“I think it will be an economic driver for us,” she said.

“Start-up ventures are very dynamic and adding COVID-19 over the last 20 months certainly has given all businesses a new set of challenges ranging from new safety protocols and supply chain issues, to talent hiring and client relations to name just a few,” said Melissa Lindell, director of media relations at Clarkson University which runs the Shipley Center for Innovation where LC Drives operates.

“The Shipley Center for Innovation’s role as part of the economic development community network is to help companies navigate commercializing their products and connecting with potential investors as well as outreach to broader community members. Each company and their directors and management team members make their own independent decisions to accept investor terms, run their operations and meet future growth objectives,” Lindell said. “We respect LC Drives right to manage their firm and make the decisions they feel are best for the long-run right now based on their own independent assessments.”