By the BF Staff
From the May/June 2016 Issue
Auto supplier Flex-N-Gate Corp. plans to invest $95 million in a new plant in the I-94 Industrial Park in Detroit that will create 650 and possibly up to 750 new jobs in the city.
The Michigan Strategic Fund approved a $3.5 million grant for the project to help the company with brownfield development costs such as demolition, site preparation and power infrastructure costs.
The state, in a memo from the Michigan Economic Development Corp., said the expansion is necessary because the supplier of parts such as vehicle front ends, headlamps, fascia, trim components and bumpers has been awarded a contract to increase the supply of parts to Ford Motor Co. The supplier does not have room for the work in any of its plants in Michigan, Indiana, Ohio or Canada, according to MEDC.
Flex-N-Gate plans to build a 500,000-square-foot production and sequencing facility on a 30-acre site in the industrial park near I-94, east of I-75. The company plans to buy the land from the city, the state says.
A memo from the Detroit Economic Development Corp., which approved the land sale to Flex-N-Gate, says the building would be about 350,000 square feet, and the company would invest $100 million and create up to 650 jobs within three years.
Flex-N-Gate will buy the land for about $1.34 million, though the company will receive a credit of nearly $1.09 million for site prep work at closing, lowering the city’s actual realized gain on the sale to about $257,000, according to the Detroit Economic Development Corp.
The company must complete construction within two years once building starts and the company will be encouraged to hire Detroit residents, according to the Detroit Economic Development Corp. The MEDC and city of Detroit are recommending Renaissance Zone approval for the company on the site in the future and the auto supplier may be offered a tax abatement from the city.
The 186-acre industrial park has two tenants: Exel, a logistics company, and Linc, a Universal Truckload Services company that opened a new logistics center in the park. That facility was developed by Warren-based Crown Enterprises, which is owned by the Moroun family that also owns the Ambassador Bridge and Michigan Central Depot.
GREY POUPON MOVES TO MICHIGAN
Kraft Heinz is bringing its premium mustard production to Holland, MI by making all of its well-known Grey Poupon mustard in the state. The project expects to generate $17.2 million in private investment and create 50 jobs in Holland. In return, the company is getting a $500,000 Michigan Business Development Program performance-based grant and a 12-year property tax abatement from the City of Holland.
“Heinz has a long history in the Holland community, providing jobs, supporting local agriculture and industrial businesses, and playing a vital role in west Michigan,” Michigan Economic Development Corp. CEO Steve Arwood said in a statement. “The decision by Kraft Heinz to expand further will mean even more jobs for area residents for years to come.”
Any incentive of $1 million or less does not need to be approved by the full MEDC board, officials said. Those projects are approved by Arwood, who acts as a delegate of the board.
Kraft Heinz came about when Kraft Foods Group merged with HJ Heinz in July 2015. The company is now the world’s fifth-largest food and beverage company and the third largest in the U.S.
Grey Poupon achieved pop culture status in the 1980s with its iconic commercials featuring a pair of Rolls Royce passengers in which one passenger asks the other, “Pardon me, but would you have any Grey Poupon?” The response? “But of course.”
The company now plans to expand operations at the Heinz manufacturing plant in Holland by consolidating 100 percent of the production of Grey Poupon mustard and insourcing the majority of Heinz Yellow Mustard to Michigan.
According to an internal April 28 MEDC briefing memo, Kraft Heinz has been moving toward global consolidation of its operations to increase profitability and eliminated redundancy. To support additional Grey Poupon production, the company would need to upgrade its own water treatment facility in Holland, a move not required by a move to a competing Illinois facility, according to the memo.
The state incentive grant, according to the MEDC, would help the company justify the move to Michigan over Illinois. State economic officials did not say what kind of jobs from the project may be available and the expected wages offered. People interested in jobs with Kraft Heinz should visit here or visit the company in Holland to apply in person.
“Back in 1897, Henry John Heinz had the vision to expand his operations into Holland, Michigan, driven by the area’s rich agriculture and eager workforce,” Kraft Heinz Factory Manager Brian Baculik said in a statement. “The community embraced the opportunity. Nearly 120 years later, the Heinz facility remains Holland’s oldest employer.”
Company spokesman Michael Mullen said the move to MI will result in the company exiting its Lehigh Valley facility in Pennsylvania this summer.
Michigan’s food-processing businesses generate nearly $25 billion in economic activity and employ more than 130,000 residents, according to state officials. Western Michigan is also home to Mead Johnson Nutrition, Butterball Farms, Coles, Kellogg’s, Country Fresh, Hudsonville and Gerber.