Good news seems scarce in the U.S. automobile industry. The headlines amount to a litany of losses, layoffs, and plant closures. And General Motors (GM), the biggest of the big three, may soon lose its status as the world’s largest automaker. But GM remains a determined competitor, as evidenced by its decision in February 2006 to expand its transmission plant in Toledo, Ohio.
The expansion will house manufacturing of GM’s new generation of Powertrain equipment, a new six-speed, rear-wheel drive automatic transmission. GM expects the new transmissions, which provide better performance and fuel economy, to replace its older four-speed transmissions by 2011.
GM will make a total fixed asset investment at the site of 413.2 million, including $70 million for a 400,000 square foot building addition, $30.6 million in building renovation, and $412.6 million for machinery and equipment. As a result of the project and the state assistance provided, GM will retain 2,000 existing full-time jobs with an average hourly wage of $28.49.
According to local press accounts, local and state officials provided an incentive package valued at $75 million over 15 years. The largest component from the state consisted of a 75 percent Job Retention Tax Credit for seven years, valued at up to $23 million. Other state components included a Roadwork Development grant, an Economic Development Contingency Fund grant, an Ohio Training Tax Credit, and a low-interest loan from Ohio State Infrastructure Bank Program funds. The City of Toledo will provide a 100 percent, 15-year Enterprise Zone tax incentive on property purchases and infrastructure improvements associated with the project.
The Powertrain project in Toledo is part of GM’s plans to streamline its operations and guarantee its future liquidity. “The introduction of these new six-speeds marks an exciting new chapter in this plant’s 90-year history of producing efficient, reliable, smooth-shifting automatic transmissions,” said John Buttermore, GM Powertrain vice president of manufacturing.