Michigan

Detroit, Michigan Economic Development Incentives Attract YFS Automotive Systems

Chinese automotive supplier YFS Automotive Systems, Inc. is expanding its U.S. footprint with a new facility for designing, testing, and manufacturing automotive fuel system components in Detroit, MI.

Detroit

Detroit (photo – CAVE CANEM/flickr)

Supported by Detroit economic development tax incentives and a state grant approved by the Michigan Strategic Fund, the company plans to invest $26.9 million to acquire a 30-acre vacant industrial site in Detroit and build a 150,000 square-foot manufacturing facility.

The project is expected to create 160 new jobs in Detroit. YFS will receive assistance from the Detroit Employment Solutions Corporation as it builds up its workforce.

Governor Rick Snyder, who met with YFS executives during an economic development trip to China last year, said in a release announcing the project that YFS locating in Detroit is a reaffirmation of Michigan’s competitive business climate.

The Michigan Economic Development Corporation announced Michigan Strategic Fund approval of a $1.3 million performance-based grant through the Michigan Business Development Program for the YFS project.

MEDC Chief Executive Officer Steve Arwood said in the release that a strong collaboration between the MEDC, the Detroit Regional Chamber, the Detroit Economic Growth Corporation and City of Detroit proved to be vital in attracting a global manufacturer like YFS.

Arwood added that this company could have chosen any number of places in the U.S. to invest and grow and the fact that they chose Michigan is a testament to the state’s growing economy and outstanding workforce.

Gallatin, TN-based YFS Automotive Systems, a Tier 1 supplier of fuel tanks and urea systems for automotive OEMs, was acquired in 2014 by Chinese company Rongshi International Holding Co., Ltd. Rongshi is itself a wholly-owned subsidiary of SDIC, and serves as the Chinese state-owned SDIC’s overseas investment and financing platform.

YFS President Marius Sipos said in the release that they are very excited to expand their operations to Detroit and play a role in the revival of Detroit by providing jobs for the people of the area.

The company will be seeking Detroit economic development incentives in the form of a tax abatement for the project. Detroit Mayor Mike Duggan said in the release that this is an important step for YFS and Detroit.

Mayor Duggan added that manufacturing investments can provide good opportunities for Detroiters, and Detroit has great potential for attracting more investments and creating even more jobs in the future.

Detroit Economic Growth Corporation CEO Rodrick T. Miller likewise noted that this significant investment by a Chinese manufacturer underscores Detroit’s global advantage as a hub of automotive research, design, and assembly.

Romulus, Michigan Economic Development Incentives Secure Spirit Airlines Hangar Project

Spirit Airlines, Inc. has selected a site at Detroit Metropolitan Airport in Romulus, MI for a new maintenance hangar project.

Spirit Airlines

Spirit Airlines (photo – airlines470/flickr)

Supported by Michigan and Romulus economic development incentives and site preparation being provided by the Wayne County Airport Authority, Spirit plans to invest $31.7 million to build a 126,000-square-foot commercial airline maintenance hangar.

The project will create 84 new aircraft maintenance and repair related jobs for the City of Romulus and Wayne County.

Spirit Airlines President and CEO Ben Baldanza said in a release that Spirit Airlines has a long and proud history with Michigan and specifically Detroit Metropolitan, Wayne County Airport. Baldanza added that they’re also excited that Spirit will be bringing additional jobs to this community.

Michigan won the project over competition from another site the company was looking at near Houston, TX. One of the key deciding factors in favor of Michigan was the package of state and local incentives that Spirit has been offered as a result of more than a year and a half of negotiations.

The Michigan Economic Development Corporation announced Michigan Strategic Fund support for a $1 million performance-based grant for the project through the Michigan Business Development Program.

MEDC Chief Executive Officer Steve Arwood said in the release that it is through the efforts of the City of Romulus and the Wayne County Airport Authority that these well-paying jobs are coming to Michigan residents, and added that they are pleased to support that collaboration.

The City of Romulus is offering economic development tax incentives to Spirit in the form of a 10-year tax abatement for the project. Romulus Mayor LeRoy D. Burcroff noted that the incentives they are offering will bring more jobs and investment to not only Romulus, but all southeast Michigan.

The Spirit Airlines hangar project site at Detroit Metropolitan Airport is part of a unique two-airport zone served by the VantagePort (formerly Aerotropolis) economic development public-private partnership. Detroit Metropolitan Airport and Willow Run Airport, located 10 miles apart along I-94, offer a wealth of undeveloped land and excess runway space.

The Wayne County Airport Authority is supporting the Spirit Airlines hangar project through investment in site preparation to facilitate development of the Spirit Airlines hangar site as well as surrounding sites.

WCAA CEO Thomas Naughton said it is very gratifying to see the hard work of their team, and the support of their local and state partners, come together to accomplish new development and job growth at the airport.

Michigan Economic Development Survey Shows Improvement in Perception

A new survey of business customers in Michigan shows a marked improvement in perception about the state’s regulatory and business climates.

MEDC RPM survey

MEDC RPM survey (photo – michigan.gov)

The Michigan Economic Development Corp. survey, conducted by ForeSee, shows a 19 percent (10 point) increase in business customers willing to recommend Michigan as a place to start a business to a friend or colleague.

A similar 19 percent improvement was seen in business customers’ positive perception of the business climate in Michigan. Positive perception of the regulatory climate in Michigan likewise showed a 23 percent jump.

Michigan began these surveys in 2013 as a way to gauge business customers’ perception of the state’s regulatory climate, identify bureaucratic red tape, and make improvements such as reducing processing times and getting rid of unnecessary paperwork.

The first survey established a baseline to measure the state’s regulatory environment, and subsequent surveys have since been able to record responses to changes and improvements in the regulatory systems.

Based on survey feedback, the state identified processes in need of improvement and formed teams of employees under Reinventing Performance in Michigan (RPM), an Office of Good Government initiative. These teams seek comments from businesses to improve key processes and eliminate mandated procedures that impact the business community.

This year’s MEDC RPM survey, for instance, shows a 30 percent (13 point) increase in respondents’ trust in the State of Michigan’s regulatory agencies.

ForeSee research experts see these improvements over the course of two years as substantial, given the range of business customers surveyed. The increases in positive perceptions are attributed to the changes and improvement in the departments.

For example, the Michigan Department of Licensing and Regulatory Affairs (LARA) cut a lot of bureaucratic red tape by eliminating more than 1,400 needless forms. This reduced the total amount of forms in the department by a huge 62 percent. LARA also cut 37 key processing times by an average of 77 percent, which led to a marked improvement in customer service response timeliness.

Michigan Lt. Governor Brian Calley said in a release that they will continue to improve the state’s regulatory systems to support business growth and job creation, while providing the critical health and safety benefits of regulatory oversight.

Rob Fowler, president and CEO of the Small Business Association of Michigan, said in the release that entrepreneurs across the state have told them that they have clearly seen a reduction in the number of burdensome regulations that impact the survival of small businesses. This, said Fowler, has helped lead to a substantial improvement in Michigan’s entrepreneurial climate.

See the full results of the MEDC RPM Survey here.

GM Announces $245M Michigan Investment at Orion Assembly Plant Near Detroit

General Motors announced plans for another $245 million investment in Michigan at the Orion Assembly Plant in Orion Township, MI.

GM Orion Assembly Plant, MI

GM Orion Assembly Plant, MI (press photo – © General Motors)

The investment is for an unnamed vehicle assembly program which GM only labeled as a “all-new vehicle program.”

The company said the $245 million investment and 300 new jobs that would be created under this vehicle program this would in addition to the $160 million investment announced earlier this year for production of the new Chevrolet Bolt EV (electric vehicle) at the Orion Assembly Plant.

This latest $245 million announcement is part of a $5.4 billion investment plan GM has initiated for its U.S. facilities over the next three years. They have already announced about $3.1 billion of this, and a major part of it will be flowing into GM facilities in Michigan.

GM began the spending spree with a $783.5 million investment announcement for Michigan facilities in Warren, Pontiac and Lansing. This was followed by a $1 billion investment plan announcement for the Warren Technical Center in Warren, MI, and then a $175 million investment for the new Chevrolet Camaro at the Lansing Grand River Plant.

Cathy Clegg, GM North America vice president of Manufacturing and Labor Relations, said in a release announcing the new vehicle project that Orion Assembly is a breeding ground for manufacturing innovation, and added that the plant is up to the challenge of building this brand-new product, something it’s never seen before.

The Orion Assembly Plant, located 30 miles north of Detroit, opened in 1983 and has since become a driving force for Orion Township and Metro Detroit economic development. It now provides employment to 1,764 workers, generating $133.8 million in wages and $22.7 million in taxes.

The Orion Assembly Plant was idled by GM in 2010. Following the company’s agreement with the UAW and reopening of the plant, the investment at Orion now stands at $962 million.

This includes $12 million for a landfill gas co-generation powerhouse that annually reduces 6,300 tons of CO2 emissions. The plant also houses a 350-kilowatt solar array. Throw in production of the Bolt EV, and this makes the Orion Assembly Plant one of GM’s more environment-friendly facilities.

UAW Vice President Cindy Estrada, who leads the union’s GM Department, said in the release that “Orion is an example of what we can achieve when we work together.” Estrada added that only through innovative problem solving were they going to see this plant succeed, and this new investment is proof of that.

Herbruck’s Expansion Lays the Ground for West Michigan Regional Economic Development

Herbruck’s Poultry Ranch, the largest egg producer in Michigan, is once again expanding operations in Ionia County to add egg-laying and pullet growing capacity.

Herbruck's

Herbruck’s Poultry Ranch (photo – herbrucks.com)

Supported by the Ionia County Economic Alliance, The Right Place and the Michigan Economic Development Corporation, Herbruck’s Poultry Ranch, Inc. will be investing $43 million to significantly expand their organic and cage-free production facilities.

Herbruck Poultry Ranch Executive Vice President Herb Herbruck said in a release announcing the new expansion plans that they are very proud of their Ionia heritage and look forward to continued growth and investment in the community.

Herbruck’s is a family-owned and operated business founded in Saranac, MI in 1958, and is currently being run by the third and fourth generation of the family. In the interim, the company has grown the 3,000 laying hens it had in the 1950s into millions that have made it the largest egg producer in Michigan.

Herbruck’s Poultry Ranch already has a team of 400 employees. This latest expansion is expected to create another 50 new jobs, and builds on a $33 million expansion announced last year. As part of that expansion, the company is investing $1.5 million for constructing a public main sewer line tied directly to the Lakewood system.

Upon completion, the company will donate the sewer line to the community, which will facilitate further economic growth in the region by allowing others along the route to make use of the new sewer line.

Furthermore, the Lakewood Waste Water Authority in Lake Odessa, MI is operating near capacity and must make improvements to support any further expansions by companies in Ionia County. Herbruck’s is helping with this too, and is working with the Waste Water Authority and Lake Odessa on the upgrade plans.

The Ionia County Economic Alliance is supporting the company’s expansion plans, working together with The Right Place and the Michigan Economic Development Corporation. The Right Place, Inc. is the regional economic development organization serving West Michigan.

The Right Place Business Development Manager Jen Wangler said in a release that Herbruck’s growth and resulting impact on the area’s waste water system is indicative of the critical role infrastructure plays in the region’s ability to continue growing, expanding and creating jobs in Ionia County.

For its part, the MEDC is supporting Herbruck’s expansion by modifying a state grant that had been approved for the company’s expansion announced last year. That performance-based grant under the Michigan Business Development Program has been hiked from $500,000 to $750,000. The modified grant now supports a total of $76 million in investments by Herbruck’s, along with the creation of 100 new jobs.

Ford-Michigan Economic Development Agreement Clears the Way for $3.1B Investment

Governor Rick Snyder announced that the Michigan Strategic Fund approved a revised agreement with Ford Motor Company that will enable Ford to double its investment in the state from $3.1 billion to $6.2 billion.

Ford Motor Co

Ford Motor Co (photo – Evoflash/flickr)

The new Ford-Michigan economic development agreement combines two previous MEGA agreements while limiting potential tax credit claims by Ford over the next ten years to 40,200 retained jobs.

In order to receive the maximum amount available in terms of tax credits, Ford will have to invest another $3.1 billion in Michigan, doubling its investment plans in the state since 2009 to $6.2 billion.

The agreement provides Ford and the State clarity about the state’s overall commitment. Ford’s tax credits are valued at $2.3 billion, and the agreement now caps the state’s obligations while requiring Ford to provide periodic forecasts of its estimated tax credits to assist the MSF and state of Michigan in budget planning.

This will be helpful in getting past the intense debate about the huge liability caused by the MEGA tax credit program. These are tax credits offered to companies planning expanded operations in Michigan involving creation or retention of jobs. With nearly $17 billion in new investments pouring into Michigan’s automotive industry since 2009, the state is already on the hook for $9.38 billion in tax credits through to 2032.

Gov. Snyder said in a release that the agreement with Ford will help them to better manage state budgets for the next 10 years, giving a clearer indication of the resources available for important services for Michigan residents. “Ford is to be commended for being the first company to assist us in addressing the liability issues associated with the MEGA program,” said Gov. Snyder.

Steve Arwood, CEO of the Michigan Economic Development Corporation, added that this action brings a certainty that has been missing from the process under the MEGA program. Arwood added that Ford’s investments in Michigan have been important to the state’s economic rebound, and the agreement assures they will see continued employment for tens of thousands of people in well-paying jobs in the state.

Joe Hinrichs, President of The Americas, Ford Motor Company, said in the release that in a globally competitive environment, the modified MEGA agreement provides an additional reason for Ford to continue considering further investment in Michigan.

One of the things the revised 10-year agreement is likely to facilitate is Ford’s plan for modernization and expansion of its Research and Engineering Center (REC) in Dearborn, MI.

Ford has already put out an RFP for a redevelopment plan for an expanded Research and Engineering Center campus in Dearborn that will be able to consolidate employees currently spread across buildings sprawled all over the Dearborn area. The redeveloped and expanded REC is expected to be a $1 billion project that will be implemented over a 10-year period.

TerryBerry Expansion in Grand Rapids Gets Michigan Economic Development Grant

TerryBerry, a global provider of employee recognition and award programs, announced a renovation and expansion plan for its design and manufacturing facility in Grand Rapids, MI.

TerryBerry

TerryBerry (photo – terryberry.com)

Supported by the Michigan Economic Development Corporation, The Right Place Inc. and the City of Grand Rapids, the company is investing $2.6 million to add 6,000 square feet to its existing 47,000 square feet at the facility.

The new space includes more office space, an employee commons and new machinery, among other things. TerryBerry expects to be able to create 53 new jobs as a result of the expansion, including positions for skilled designers, IT developers, sales jobs, and custom jewelry craftsmen.

It’s a prestigious economic development win for Grand Rapids, considering the historic nature of the company and its dominance of the employee recognition programs sector. TerryBerry is a nearly hundred-year old business now, having been founded in 1918 in Grand Rapids by H. R. Terryberry to produce class rings.

It’s a fourth-generation family-owned business now, with more than 25,000 clients across the world as their clients. The company is still headquartered in Grand Rapids, and has 200 existing employees, most of whom are located in Grand Rapids. They also have 30 sales offices across North America and one in London.

Mike Byam, fourth-generation managing partner of Terryberry, said in a release that they are thrilled to be able to bring about a positive economic impact in their community by creating more than 50 new jobs.

Byam added that they are grateful for the collaborative effort with The Right Place and the Michigan Economic Development Corporation to help them train a skilled workforce.

The Right Place, Inc., the regional economic organization serving West Michigan, worked with the MEDC to provide the company the support it needs as it creates jobs and makes an investment for the expansion in Grand Rapids.

TerryBerry will receive a $250,000 Michigan Strategic Fund grant to help them offset the training costs associated with the new hires. This is a performance-based grant tied to their job creation plans. The company will also receive City of Grand Rapids economic development incentives in the form of a tax abatement for the project that will save them about $221,000.

Tim Mroz, vice president, marketing and communications for The Right Place, Inc., said in the release that this economic development project underlines the importance of working with their partners at the MEDC toward continued business growth in West Michigan.

Mroz added that they are pleased that they could play a crucial role in helping the company continue to grow, innovate, and reinvest in Grand Rapids.

Lansing Economic Development Gets One More GM Boost With $175M Investment and 500 Jobs

Lansing, MI is once again a beneficiary of the ongoing series of investment announcements by General Motors.

GM Lansing Camaro investment

GM Lansing Camaro investment (press photo – © General Motors)

GM announced a $175 million investment for new tooling and equipment to produce the sixth-generation Chevrolet Camaro at the Lansing Grand River Plant.

This follows an announcement less than a month ago of a $520 million investment at its Lansing Delta Township assembly plant that will help retain 1,900 jobs.

All told, GM already has some 3,500 at the Lansing Delta Township assembly plant, another 1,500 at the Lansing Grand River Plant, and 300 at the Lansing stamping facility. This has a considerable economic impact on the Lansing regional economy, including $394.8 million in wages and $75.3 million in payroll taxes.

The good news for Lansing economic development this time is that this latest $175 million investment announcement at the LGR plant also includes 500 jobs that are coming back to Lansing. GM plans to resume a second shift which had been cut earlier to facilitate reduction in production of Cadillac models.

Lansing Mayor Virg Bernero said in a release announcing GM’s investment and the 500 jobs that “I may be the luckiest mayor in America today.”

Mayor Bernero added that gearing up for full-scale production of the legendary Chevy Camaro is a new high point in the more than two decades of extraordinary partnership between the City, GM and the UAW.

It is indeed noteworthy because the Camaro, America’s best-selling performance car in the last five years, hasn’t been made in the U.S. since the 1990s. GM announced in 2012 that it was moving assembly of the next-generation Chevrolet Camaro from the Oshawa Assembly plant in Ontario, Canada to the LGR plant in Lansing.

Last month, GM said it was cutting 1,000 jobs at the Oshawa Assembly plant. At the same time, GM kicked its $5.4 billion investment plan for its U.S. plants. The investment announcements made by GM in less than a month are as follows:

- $783.5 million investment at Michigan facilities in Warren, Pontiac and Lansing;

- $1 billion investment plan for the Warren Technical Center in Warren, MI;

- $439 million investment at the Bowling Green Corvette Assembly Plant in Bowling Green, KY; and

- $1.1 billion investment for full-size pickup trucks at the Fort Wayne Assembly plant in Fort Wayne, IN

This latest $175 million investment in the LGR plant in Lansing includes facility improvements such as robotic framers, and Camaro-specific upgrades such as new paint systems.

These announcements over the last four weeks account for nearly $2.8 billion in investments at GM operations in Michigan, Kentucky and Indiana.

The LGR plant, which opened in 2001, is one of GM’s newest plants in North America, and is home to the Cadillac CTS, the all-new Cadillac ATS, and now the Chevy Camaro.

GM North American Manufacturing Manager Scott Whybrew said in the release that with this investment in tooling and equipment, they will continue to do their part to build on the high-quality reputation of this iconic car.

Michigan House Committee Hearing on Bills to Divert Economic Development Funding for Roads

A new Michigan House Committee on Roads and Economic Development is scheduled to hold a hearing and hear testimony on some high-profile bills that are opposed by economic development and business groups in the state.

Pure Michigan

Pure Michigan (photo – PunkToad/flickr)

The bills (HB 4607 and HB 4608) seek to divert $135 million in funding that is currently allocated to the 21st Century Jobs Fund and the Michigan Economic Development Corporation.

The MI House Committee on Roads and Economic Development was created earlier this month as part of an effort to assist a 12-bill road funding plan introduced by Speaker of the House Kevin Cotter.

At that time, Speaker Cotter said in a release that “Finding a long-term plan for Michigan’s crumbling roads is one of our top priorities, and it is time the committee makeup of the Legislature reflected that.”

Speaker Cotter added that creating this committee allows them to come together and work quickly on a solution that fixes roads, sets the stage for continued economic growth and gets Michigan moving again.

But the two aforementioned bills divert funding from vitally important economic development programs like the Jobs for Michigan Investment Fund, brownfield and historic preservation tax credits, business accelerators, incubators, and the Pure Michigan campaign, whose funding would be entirely eliminated.

HB 4607, sponsored by State Rep. Phil Pettalia, would amend the Michigan Trust Fund Act to allocate $75 million from tobacco settlement revenue to the Michigan Transportation Fund. Since FY 2011-12, this $75 million has been typically distributed among three programs, as detailed below:

- Business Attraction and Community Revitalization (FY 2014-15 appropriation – $28.8 million);

- Entrepreneurship Eco-System (FY 2014-15 appropriation – $17.2 million); and

- Pure Michigan (FY 2014-15 appropriation – $29.0 million);

Note that this doesn’t necessarily mean that Michigan will have to eliminate these programs. But the MEDC and other organizations that run these programs may have to find other means of funding to pay for it.

HB 4608, sponsored by State Rep. Lee Chatfield, would amend the Michigan Strategic Fund Act to divert $60 million, mainly from Indian Gaming revenues, into the Michigan Transportation Fund.

These revenues currently flow directly from the casinos to the MEDC under various Gaming Compacts. The casino revenues are the source for the Jobs for Michigan Investment Fund, and it’s not subject to the legislative appropriations process.

Steve Arwood, director of the new Michigan Department of Talent and Economic Development, which houses both the MEDC and the Pure Michigan campaign, is one of those who will be providing testimony at the House Committee on Roads and Economic Development hearing.

GM Announces $1B Investment in Warren Technical Center Campus

General Motors announced plans to invest $1 billion for a multi-year construction, expansion and modernization project at its Warren Technical Center campus in Warren, MI.

GM Warren Tech Center

GM Warren Tech Center (press photo – ©General Motors)

The project, which includes new construction on the campus, along with renovations of existing buildings and expansions of some operations, will create 2,600 new salaried GM jobs at the Warren Technical Center.

The GM Tech Center in Warren, a National Historic Landmark listed on the National Register of Historic Places, is already home to more than 19,000 employees.

It opened in 1956 as the culmination of one of the most outstanding architectural and business consolidation projects of its era, enabling the company to bring its vehicle engineering operations at 14 locations in Southeast Michigan into a single campus.

GM now plans to add new design studios, rebuild and renovate R&D facilities, add a new multi-story IT building next to its recently opened IT Innovation Center, and add new testing areas at the Advanced Energy Center. The project, which will continue through to 2018, will also include construction of new parking decks and extensive office upgrades in most of its operations in the Warren Tech Center.

Mark Reuss, GM executive vice president, Global Product Development and Purchasing and Supply Chain, said in a release announcing the investment that they plan to transform the campus into a collaborative workplace of choice for their current team and future talent.

This $1 billion expansion plan is in addition to the $139.5 million investment that GM announced a couple of week ago for body shop and stamping facility upgrades of its Warren pre-production operations.

State and local officials touted GM’s huge investment plans in Warren as great news which has already led to other Warren economic development projects.

Governor Rick Snyder said in the release that this is great news for Warren, the region and the state. The Governor said it soundly demonstrates GM’s commitment to Michigan and the state’s talented workforce, providing key jobs and career opportunities for today and tomorrow.

Warren Mayor Jim Fouts said he is very excited about GM’s investment in the Tech Center, which he said has already resulted in proposals for new investments in Warren’s downtown, which is located directly across the street from the Tech Center.

The Warren City Council is authorizing economic development incentives for the proposed GM expansion in the form of a 50 percent real and personal property tax abatement for 12 years, and two additional years for the construction.

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