The supplier plant will be built in three buildings next to DaimlerChrysler’s three-year-old assembly plant, which manufactures Jeep Wrangler and Liberty vehicles.
The $900 million plant will employ about 800 workers, mostly Jeep workers who are now laid off. It will also bring the production of two more vehicles to the assembly plant.
The expansion will keep jobs from going overseas, while allowing DaimlerChrysler to invest more money in new product designs.
The new plant, together with the existing plant, will keep 3,800 workers in Toledo.
“What we’re doing in Toledo is not outsourcing,” said Tom LaSorda, chief operating officer of the Chrysler Group. “It’s what we call insourcing.”
Supplier investment will save the automaker $300 million, which is enough to pay for one new vehicle at the plant, LaSorda said.
Three suppliers will own and operate the new plant: the Kuka Group, a Germany-based company, will operate the body shop; Durr Industries, a Plymouth, Mich.,-based company, will run the paint shop; and Hyundai Mobis, a South Korea-based company, will produce the chassis assembly.
Combined, these companies will invest $260 million for building, machinery and equipment, and tooling.
DaimlerChrysler will invest $275 million for the building, machinery and equipment, and stamping to accommodate the expansion of products associated with the paint, chassis and body shops.
While the concept of a supplier-run plant sharing the same site with an assembly factory has been used overseas, it’s new to the United States, the company said.
A collaborative effort between the state of Ohio, the city of Toledo and the Toledo-Lucas County Port Authority will help support the project. The support includes tax incentives, abatements, land, traffic-related infrastructure changes and training funds.
Construction is expected to start by the end of the year and production is expected to begin in 2006.
Medical Lab Expands
Months after acquiring a competitor, LabOne Inc. has decided that it will expand its medical laboratory testing operations in Cincinnati. The $21 million expansion project is expected to create 400 jobs and retain more than 560 positions.
Earlier this year, LabOne purchased Cincinnati-based Health Alliance Laboratory, creating LabAlliance Inc., a wholly owned subsidiary of the Lenexa, Kan.,-based company. Since that time, Ohio and Kentucky have vied for the expansion project.
Construction of a new facility is expected to begin by the end of the year, and the expansion of jobs is expected to take place during a three-year period ending in 2008.
The Ohio Department of Development put together an incentive package that helped LabOne decide to site the project in Ohio.
The package includes a 75 percent Job Creation Tax Credit for 10 years, valued at up to $3.3 million; a $400,000 training grant; a Business Development Grant of $500,000; and financing of up to $9.4 million through the Direct Loan and Enterprise Zone Bond programs.
Not only does the state of Ohio help big cities like Cincinnati, it doesn’t forget about its smaller communities.
The state announced that the city of Wauseon will receive a $500,000 grant to provide infrastructure improvements to assist Lear Corp.’s Automotive Systems Inc. with its planned expansion project. The $12 million project is expected to create 184 jobs.
The grant was awarded through the Ohio Small Cities Community Development Block Grant (CDBG) Economic Development Program.
Lear manufactures automotive interior trim products and door panels by using an injection plastic molding process.
The CDBG funds will be used to extend 4,400 linear feet of a 138KV power transmission line and for the construction of an electric substation. This will enable the company to expand its current facility by 65,000 square feet.
Cabinet Manufacturer Builds on Success
The consumer demand for custom- made kitchen cabinets is spurring expansion of a Northeast Ohio cabinet manufacturer. KraftMaid Cabinetry Inc. has embarked on a $25 million expansion project that will increase manufacturing space at its three plants by 150,000 square feet.
The company will hire 200 workers by the end of the year at the plants, located east of Cleveland, and an additional 500 to 700 other workers will be hired during the next three to five years.
The 900 jobs would increase the number of employees at the plants by about 25 percent.
A 60,000 square foot expansion is being built at one KraftMaid plant in Middlefield, which mills, assembles and ships cabinets, and which houses the company’s executive office. The expansion was expected to be completed this month.
At another Middlefield plant, where cabinet frames are built, the company expects to complete a 10,600 square foot addition by the end of the year.
A 79,000 square foot expansion at its finishing plant in Orwell is also to be finished by the end of the year.
KraftMaid is spending $4.2 million to expand the Orwell plant. Ashtabula County approved a 60 percent, 10-year tax abatement on real and personal property taxes on the development.
During the past seven years, KraftMaid has seen its employment more than double to about 3,650 workers.
Ken Krizner is managing editor of Expansion Management. He can be reached at kkrizner@penton.com.
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