Economic Development Blog

Jackson National Life Insurance Company has announced plans for a $100 million expansion at its 175-acre Lansing, Michigan headquarters to add a conference center and a data imaging Center.

Jackson (photo – jackson.com)

The $100 million investment is expected to create 1,019 new jobs at the Lansing campus. The company already has 2,100 employees in Lansing.

The expansion includes construction of a connector between the existing main building and the new 260,000-square-foot complex and 80,000-square-foot data imaging center to be built on adjacent property.

Michael Wells, president and CEO of Jackson, said the project would allow them to expand the company’s financial services industry footprint nationally.

Lansing successfully competed against sites nationwide for this expansion, and was chosen because of the co-location possibilities with its headquarters, and due to proximity to several top universities and metropolitan areas that would facilitate recruitment.

Robert L. Trezise, Jr., president and CEO of the Lansing Economic Area Partnership (LEAP), said the project being secured by Lansing was the result of extraordinary regional cooperation.

The roots of the incentives offered to Jackson for this expansion go back to 2008, when Lansing Mayor Virg Bernero and Alaiedon Township Supervisor Steve Lott agreed on a revenue sharing arrangement for the Jackson operations under ACT 425 – a state law which allows two local government entities to share revenues from new business projects or expansions.

This was necessary because the property technically comes under the township, but the power, water and the sewerage system are provided through by the City of Lansing, and the company’s corporate address is stated as being located in Lansing.

Jackson got its first such 425 arrangement in 1998, and the second one was approved in 2008 for this planned expansion which was announced today. Under this 425 arrangement, the city and township together approved a $7.5 million property tax exemption for Jackson.

The company is reportedly asking for a third 425 for its proposed data imaging center. The Michigan Economic Development Corp. (MEDC) is additionally offering $6 million in grants.

Trezise said it was their privilege to be able to finalize the incentives to ensure Jackson grows in Lansing rather than outside the region or the state.

Jackson National Life Insurance Company racked up $25 billion in sales last year, and has a total of 4,300 employees, including the 2,100 existing jobs in Lansing.

The next new sharpie or paper mate you see is likely going to be designed in Kalamazoo, Michigan.

Newell Rubbermaid design center rendering (photo – michigan.gov)

Newell Rubbermaid Inc. (NYSE: NWL), whose brand portfolio includes Sharpie, Paper Mate and Rubbermaid, is planning to set up a design center in Kalamazoo where it will consolidate all its graphic and product design work for the U.S.

The company is investing $2.3 million to set up the design center and will create 100 high-paying design jobs with average annual wages in between $70,000 to $90,000.

Kalamazoo successfully competed for the design center project against competing sites in Chicago and Atlanta, where the company has its global corporate headquarters.

Chuck Jones, chief design and R&D officer for Newell Rubbermaid, thanked Michigan for its support and cited Western Michigan University’s talent pool of designers as one of the main factors in favor of Kalamazoo.

The City of Kalamazoo has offered the company $164,000 in tax abatements as local incentives. The state has approved a $2 million performance-based grant from the Michigan EDC’s Michigan Strategic Fund.

Southwest Michigan First, the privately funded economic development organization serving the Southwest Michigan area, has been working on this project for a year.

Southwest Michigan First will be putting up $4 million for construction of the Newell Rubbermaid design center building at the WMU Business Technology and Research Park. They will then lease the building to the company.

MEDC President and CEO Michael A. Finney said the Newell design center would diversify the state’s economy, and said they were happy to support this collaborative effort involving WMU, the City of Kalamazoo and Southwest Michigan First.

Ron Kitchens, CEO of Southwest Michigan First, said Newell Rubbermaid would like its new location because the region and company’s cultures are “rooted in innovation and the creation of things that change peoples’ lives.”

Atlanta, Georgia-based Newell Rubbermaid is an S&P 500 company with $5.9 billion in sales last year. The company had 19,900 employees around the world as of Dec 2012.

American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) announced today that it is investing more than $100 million in its manufacturing facility in Three Rivers, Michigan.

Ameican Axle plant in Three Rivers, MI (photo – aam.com)

The investment on new production lines, shipping capacity and administrative facilities will be completed by December 2013, and is expected to create more than 500 new jobs.

To complete the project, AAM has sourced millions of dollars of business to Michigan-based companies, and in turn, is positively impacting multiple communities in the state.

“Last fall, we announced that AAM would be bringing new business to Michigan,” said AAM president and CEO David C. Dauch. “For the past two years, we have been preparing the Three Rivers Manufacturing Facility for this new business launch. Now, we are in a growth mode and hiring hundreds of associates. This is exciting news for the State of Michigan, the City of Three Rivers and for AAM.”

AAM has been working closely with city officials in Three Rivers since the recession in 2008-09, when the workforce at the Three Rivers AAM plant was cut down from 790 to 465. In Jan 2012, the city approved a 50 percent tax abatement for 12 years on $82,884,100 being spent for machinery and building improvements.

The company undertook an improvement project of $102 million, saved 125 jobs and created 274 new jobs.

Anchored by its global headquarters in the City of Detroit, AAM operates a total of seven facilities in Michigan. AAM also has facilities in Ohio, Pennsylvania and Indiana.

The company favors this plant over its other facilities because of a union agreement that reduces the labor costs as compared to other plants. They could not get the UAW to sign off on the same agreement for their other plants. The closure of the Detroit plant pushed even more work out to Three Rivers.

AAM is now adding 20 new employees per week at Three Rivers until August 2013, at which time it expects the Three Rivers workforce to hit the 1,300 mark.

“AAM will continue to make investments in Michigan, North America and regions across the globe where we are privileged to do business,” added Dauch.

General Motors announced that it will invest $200 million into its Global Powertrain Engineering Headquarters in Pontiac, Michigan to build a new 138,000 sq.-ft. test wing.

MI Gov. Rick Snyder at GM press conference (Photo by Jeffrey Sauger for General Motors)

The expansion will enable the company to consolidate work being done at four locations remote to the Pontiac campus.

When the relocations are complete, GM will have added approximately 400 jobs to the Pontiac campus.

The consolidation of the test wing in Pontiac will help GM reduce development timing for the company’s next-generation advanced propulsion technologies. The new test wing will allow engineers to bring advanced, fuel-saving powertrains to market faster and less expensively because they take less development time.

The 450,000 sq.-ft. Powertrain Development Center is one of the largest and most technically advanced powertrain development centers in the world.

GM last completed a consolidation of seven southeastern Michigan Powertrain Engineering facilities in 2008. This latest consolidation wave will allow GM to cut another 640,000 square feet of floor space and eliminate three leased facilities in the United States.

Under the expansion plan, engineering development work currently being done at leased facilities in Wixom, Michigan; Castleton, Indiana and Torrance, California, will move to Pontiac. Also, GM R&D’s Propulsion Systems Research lab in Warren will relocate to the Pontiac campus.

GM previously announced that work being performed at its hydrogen fuel cell facility in Honeoye Falls, N.Y., would be consolidated in Pontiac in mid-2013.

“These moves will help our entire Powertrain team work more effectively across the organization to develop the powertrain technologies we need to build the world’s best vehicles for our customers around the world,” said Sam Winegarden, GM vice president of Global Engine Engineering.

This $200 million investment in Michigan is part of the $1.5 billion outlay announced by GM for its North American facilities in 2013. Coupled with their $600 million expansion plan for the Fairfax plant in Kansas, GM has already made good on more than half of their forecasted investment for this year.