Chinese owned Nexteer Automotive Corp.It will receive $25.5 million in COVID-19 relief funds and $2.3 million in tax benefits to maintain 1,100 jobs near Saginaw, Michigan.
The funding was approved Tuesday by the Michigan Economic Development Corporation’s Michigan Strategic Fund. According to a MEDC briefing memo, the incentive will allow Auburn Hills-based auto suppliers to invest up to $312 million over the next 10 years toward the production of electric vehicles while maintaining their gas engine business. The purpose is to prepare the factory for
Formerly part of Delphi Corp., Nexteer was acquired in 2010. Pacific Century Motors, a venture managed by the city of Beijing and a Chinese aerospace giant.of company board of directors Mainly Chinese.
Community Development Block Grants Coronavirus Aid, Relief, and Economic Security Fund will help sustain at least 1,100 jobs and drive $51 million in investment by June 2024, according to the memo The State Essential Services Assessment waiver will secure an additional investment of $261 million over the next 10 years.
“Due to the competitive nature of the project,” the state is waiving SESA’s requirement to invest within three years, the memo said.
Officials say incentives are a “key factor” to discourage auto suppliers from moving their sole domestic manufacturing plant in Saginaw to lower-cost areas.
“The company is evaluating several scenarios related to its global operating and investment plans that may involve investing in or outsourcing to more cost-effective locations in North America,” the memo said. “With the current workforce coming from 166 cities and 34 counties within Michigan, the losses will be extensive.”
Use of the COVID-19 relief fund is justified because auto suppliers have been hit economically by the pandemic, according to the state.
“Given the impact of COVID-19 on the company and the operational, financial, and workforce disruptions and challenges caused by the pandemic, the company’s management has decided to develop future investment and workforce strategies with the goal of optimizing reduce costs while remaining competitive in the automotive and e-mobility sectors,” said the memo.
Nexteer, which supplies power steering and driveline systems to automakers, employed 12,100 full-time workers at 26 plants as of June, according to a 2022 interim report.
In the first half of 2022, the company said revenue increased 3.3% to $1.8 billion, while adjusted earnings before specified charges fell 26% to $158 million. Interim report.
Nexteer is ranked 58th in the ranking. car news List of the top 100 global suppliers with global sales to automakers of $3.3 billion in 2021.
Automotive News contributed to this report.
https://www.autonews.com/manufacturing/michigan-gives-chinas-nexteer-255m-pandemic-relief Michigan Offers China’s Nexteer $25.5 Million Pandemic Relief