November 11, 2022
Crain’s Detroit Business
Oct. 25, 2022
Kurt Nagl
Automotive supplier Magna International Inc. is planning to expand operations in Highland Park, Shelby Township and St. Clair while creating 1,569 jobs to support new business from automakers.
The Canadian company, whose U.S. base is in metro Detroit, plans to invest around $530 million into new and existing plants to build seat frames as well as EV battery frames, enclosures and components.
The projects are being backed by state and local incentives totaling around $50 million, according to the Michigan Economic Development Corp., which approved the projects Tuesday.
Magna intends to quadruple the footprint of its EV parts plant announced early last year. The plant produces battery enclosures for the 2022 BT1XX platform, which includes the GMC Hummer EV.
The company will increase its investment from $70.1 million to $497 million and boost job creation from 304 to 1,224.
The expansion, which would add 740,000 square feet for more than 1 million square feet in St. Clair, is the result of landing a new program over the next eight years from a “major OEM” that was not identified in the memo.
Crain’s contacted Magna for more information about the projects.
“This new program will grow new business to support electrification strategy which is a key growing priority for the Company to increase its leadership position in the battery frame market,” the memo said.
Photo courtesy of CoStar Group Inc.
Wages for the newly created positions range from $17 per hour to $48 per hour, with an average of $27 per hour.
The project is being backed by $44 million in state and local incentives.
“We are grateful to have earned this … but we have to continue to earn future investment,” MEDC CEO Quentin Messer said Tuesday during a media call with reporters. “Obviously, anytime that you can add on your footprint, it makes it more difficult for them to leave. Magna is a very coveted company.”
To support the latest expansion, the MEDC increased the value of its Michigan Business Development Program from $1.5 million to $7.5 million, approved a 100 percent SESA tax exemption worth $6.3 million and authorized a State Education Tax abatement.
Other support includes $3.6 million from the Economic Development Alliance of St. Clair County for infrastructure improvement. The project would require construction of a new water tower for $7.4 million, plus $8.2 million in water plant upgrades.
“The City of St. Clair is very excited to have won this significant project,” St. Clair Mayor Bill Cedar said in a news release. “I’m extremely proud of our city council, county officials and economic development partners for aggressively competing to win the Magna project.”
Magna Powertrain of America Inc. said it will invest $96.2 million into a leased 200,000-square-foot plant, according to the memo, which did not disclose the project address.
The company would manufacture internal components for EV battery trays at the plant with a production capacity of 13 million units by 2023 and nearly 74 million by 2030.
Magna expects to employ 159 workers at an average wage of $2,500 per week plus benefits.
The MEDC approved a $1.3 million grant for the project and a 50 percent SESA tax exemption for up to five years totaling $370,000 in value. Additionally, Shelby Township anticipates approving a local tax abatement for the plant.
Magna Seating of America Inc. plans to invest $3.8 million to build out a leased 114,000-square-foot plant at 12240 Oakland Parkway, according to an MEDC briefing memo.
The seating, foam and trim assembly plant would employ 490 jobs paying an average of $700 per week plus benefits.
The project is being supported by a $2.9 million performance-based grant by the MEDC, which said the incentives were necessary to keep the company from expanding outside the state.
“While Magna remains committed to Michigan, incentive assistance is necessary to make the expansion in Michigan a competitive decision,” the MEDC said.
Magna has 341 manufacturing plants and 89 product development, engineering and sales centers in 28 countries with more than 161,000 employees worldwide. Michigan is home to 35 of those facilities and more than 10,000 employees.
Jeremy Webb, interim managing director of the MEDC, said the state has claw-back provisions in place to protect the taxpayer incentives being given to Magna.
“We do have performance metrics that they have to make, so they have to create the jobs in order to get any of the funding, and if they were to remove those jobs within the term of the agreement, there would be claw back provisions in pace to work with the company on repayment,” Webb said on Tuesday’s call with reporters.
