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October 05, 2021 12:27 PM

How Detroit woos auto suppliers to build in the city

Kurt Nagl
Crain's Detroit Business
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    DugganLear_i.jpg
    City of Detroit Flickr
    Frank Orsini, executive vice president and president of seating for Lear Corp., speaks alongside Detroit Mayor Mike Duggan for a ceremonial groundbreaking for a new Lear facility in the city.

    Automotive seating supplier Lear Corp. said it plans to open its new plant at the site of the former Cadillac Stamping Plant in Detroit by mid-2022 and create 450 new jobs.

    At a ceremonial groundbreaking event Oct. 4, the Southfield, Mich.-based Lear provided more details about its previously reported just-in-time seating plant to supply General Motors Co.'s parts for electric vehicles being built at Factory Zero in Hamtramck.

    The supplier will occupy two-thirds of a new 684,000-square-foot industrial building being developed by Riverside, Mo.-based NorthPoint Development LLC at a cost of $48 million, according to a news release from the city.

    A second phase of the project will provide room for another tenant and hundreds more jobs, the city said.

    Detroit Mayor Mike Duggan said during the event that he met with NorthPoint executives three or four years ago and convinced them to redevelop the site. He said that when GM committed to manufacturing EVs in nearby Hamtramck, CEO Mary Barra and President Mark Reuss promised him they would think of Detroit first for potential supplier sites.

    "They made Nicole [Sherard-Freeman] and me a promise," Duggan said. "Every time they picked a parts supplier, they would call us first. Most of the time, I know who the parts supplier is before the parts supplier does, so we can get a chance to pitch them on a site."

    Sherard-Freeman, who heads up the city's workforce and job training initiatives, said having a site ready for development helped attract Lear to the city.

    Site preparedness has become a central economic development issue since Michigan lost out on massive EV investments announced by Ford Motor Co. in late September.

    "Lear didn't have to choose Detroit, but they did," Sherard-Freeman said. "We sold Lear on having the land and the facility ready on the timeline that they asked for. We sold Lear on making it easy to do business in and with the city of Detroit, and we sold them on being inclusive and being inventive and on doing business the right way."

    It was not clear how much the jobs pay or whether they will be union jobs. Frank Orsini, executive vice president and president of seating for Lear, said the jobs will be salaried and a mix of direct and indirect hires.

    "We have a long standing relationship with the unions we work with," a Lear spokesperson said in an email. "We are not to the point of discussions and we cannot comment any further."

    Detroit residents will be given preference for the jobs, and Detroit at Work will handle recruiting ahead of the plant's launch.

    The project is being supported by an $18.4 million Brownfield tax increment financing plan recently approved by the city and an approximately $4 million Industrial Facilities Exemption tax incentive. Also, a $1 million grant for environmental cleanup and on-site storm water detention will come from the Michigan Department of Environment, Great Lakes and Energy via Wayne County.

    Lear declined to say how much it is investing in the plant.

    The project is not subject to the community benefits threshold because it is less than $75 million in value, city spokesman John Roach said. At least 51 percent of workers constructing the building must be Detroit residents.

    Lear said the plant will be among the most energy-efficient of its footprint.

    "As one of Michigan's largest employers, Lear is excited to be opening a new state-of-the-art facility in the City of Detroit where we have had a manufacturing presence for many years," Ray Scott, Lear president and CEO, said in the release.

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