Sleeping Giants Awaken

The Big Three are not taking a back seat in Ann Arbor by any means. In an illustration of the give-and-take necessary to foster a knowledge-based economy, General Motors announced in early 2003 that it would donate more than $10 million in research and educational grants to the University of Michigan, including work at two labs dedicated to advanced vehicle manufacturing and engine systems.
        Certainly there have been plenty of plant closures in recent years, but some brownfield momentum is gaining traction. As redevelopment proposals for the likes of the 200-acre (82-hectare) former Buick City property in Flint are still being mulled over, others are off and running. One such project actually reverses the normal roles. A 198,700-sq.-ft. (18,459-sq.-m.) former Herman Miller chair manufacturing facility on 87 acres (35.2 hectares) in Holland has been purchased by Tier-1 supplier Challenger Manufacturing, which will open a metal stamping operation there. The area saw layoffs in 2003 from Miller, Kraft Foods and Haworth Corp.

Canada In Play DaimlerChrysler did not play favorites in doling out disappointment in 2003, as its Georgia van plant pullout was matched by its pullout from expansion plans at its Windsor, Ont., facility. Ford announced it would close its Windsor Truck Plant in 2004 as well. But the same year saw Ford complete investments in two Windsor engine plants that are making the next-generation 300-horsepower, 3-Valve, Triton V-8 engine. Ford also celebrated its 50th year of operations in Oakville in 2003 by rolling its first Ford Windstar and Mercury Monterey vehicles off the line after a $379-million investment.         Meanwhile, Toyota produced its first Lexus outside of Japan in September 2003 at its Cambridge, Ont., facility.         Canada officials have taken their share of hits for not having their heads in the incentives game, but an October 2003 study of 125 automotive plant investments over the past decade from the Michigan-based Center for Automotive Research intimated that the high incentive packages being doled out by the South were for the most part going toward infrastructure that the U.S. North and Canada already possess.         The atmosphere was helped by an agreement reached in May 2003 by CAW members and Navistar International, enabling the company to keep its truck plant in Chatham, Ont., open at least until 2007.         Another province is also rearing its head in the sector: In early 2003, Québec cemented a plan with GM Canada, the Québec government and Société Generale de Financement du Québec (SGF) to grow the Quebecois supplier base. Concentrating on lighweight materials, GM is pledging $400 million in contracts over the next five years, as well as $10 million towards university-based R&D programs. SGF is working with suppliers and their prospective financiers to establish and expand their base on a par with GM quality. GM Canada is based in Oshawa, Ont., where its two plants were rated No. 2 and No. 3 in efficiency by the 2003 Harbour Report.

        In late November 2003, Michigan Gov. Jennifer Granholm, unsupported by company spokespeople, said there was a distinct possibility that Ford would invest some $583 million in two plants located in Wayne. MEDC was offering a 20-year, $48.8-million tax break, backed by a possible 12-year, $41.5-million tax break from the City of Wayne.
        The very next day, Ford did an-nounce imminent investment of some $325 million, but in two other plants, with $170 million slated for its transmission plant in Livonia, Mich., and $155 million for another transmission plant in Sharonville, Ohio. But a week later, Jim Padilla, Ford executive vice president, came through for the governor, announcing that the Wayne Stamping and Assembly Plant would receive a $240-million investment, with further investment "anticipated."
        These investments come at the same time the company is closing parts plants in those two states, as part of an overall cutback of some 4,600 jobs over the next four years. Ford Land's 2003 real estate portfolio consisted of some 132 million sq. ft. (12.3 million sq. m.) of office, manufacturing and retail space.
        Still rolling in Missouri are Ford assembly lines at the Kansas City Assembly Plant in Claycomo, where the company will produce the hybrid version of the Ford Escape SUV, and at the St. Louis Assembly Plant in Hazelwood. At press time, Ford had promised an unspecified investment in the K.C. facility, which employs 6,000, and an incentive package that included job training assistance was still to be worked out. (Meanwhile, Gov. Bob Holden's office was holding out $1.2 million in training funds to DaimlerChrysler to help spur a potential investment of some $27 million in that company's two St. Louis plants.)
        The St. Louis save will not affect Ford's decision to invest $550 million in the upgrade of Ford's two Louisville, Ky., plants. The move was prompted in part by a new Kentucky law granting tax credits for investments over $100 million in an existing operation, resulting in a total incentive package of some $50 million. Missouri had offered $17 million if the company would launch a new model in St. Louis, but the automaker is expected to only need one plant for Explorer production.
        During the same few days, Georgia, fighting to save Ford's presence in the Atlanta metro as its Hapeville plant ages, withdrew its option to purchase a large parcel, signaling that Ford's immediate plans are indeed elsewhere. The state's pullout came on the heels of the DaimlerChrysler pullout from its planned $800-million utility van plant in Pooler, Ga.
        Meanwhile, Ford is investing $192 million in upgrading its Romeo, Mich., engine plant, adding a production system for three-valve cylinder heads for the 4.6-liter V-8 engine. The facility will then have equal capabilities to its sister plant in Windsor, Ont., where the 2004 F-150 pickup is the first vehicle produced by Ford on the continent to have the engine.
        Looks like the high-stakes incentives battle is alive and well.