Despite concerns about the state’s plan to eliminate personal property tax, Saline City Council unanimously approved Faurecia’s request for a 12-year tax abatement on an $86 million project.
The application was for $3.4 million in building and land improvements and $81.6 million in new machinery and equipment. Faurecia is retooling to make components for the 2015 F-150 pickup, 2016 Ford Mustang and 2014 Transit van.
Council member Dean Girbach said he had concerns about moving forward with the tax abatement with so many unknowns relating to the state’s repealing of the personal property tax.
“(The personal property tax law) got ramrodded through. I’m all for giving whatever we can to support this project, but I’m concerned about screwing the city over. We already know of bills that have been changed as a result of the legislature’s failure to think things through,” Girbach said. “I want to do what’s best for Saline.”
Council member Linda TerHaar pointed out a provision that would allow the city to cancel the abatement, which allayed Girbach’s concerns.
Council member Brian Marl moved the motion to adopt a resolution in support of the tax break and to authorize Mayor Gretchen Driskell and Clerk Dianne Hill to execute the agreement.
“I understand concerns articulated during public comment and by my friend and colleague Mr. Girbach. But as of December 2012, we have the ability to abate personal property taxes, and that’s what we should do. The investment Faurecia is making is significant and important, and it’s important to Saline’s well being,” Marl said.
Girbach had discussed the possibility of postponing the vote until the city learned more about the plans to replace the personal property tax.
But Clerk Hill pointed out the abatement must be approved within 60 days of the application. City council’s next meeting is Jan. 7, exactly 60 days after Faurecia applied for the abatement, and Hill was not certain if the date Faurecia applied for the abatement counted as one of the 60 days.
During a public hearing Ray Boufford, VP of strategic transformation for Faurecia, Luke Bonner, of Ann Arbor SPARK and Mary Hess, city resident and member of the city’s Special Projects Committee, spoke to city council.
Bonner told city council that Saline is fortunate that the giant automotive facility is being repurposed. Bonnner said that of 112 America automotive plants closed between 2004-10, about half are being used productively. He noted that of the 16 ACH facilities, one is still in operation, six have been sold, three have transferred back to Ford and six have closed.
“SPARK is very much in favor of city council responding favorably to this request,” Bonner said.
Boufford explained the transition from of the Faurecia plant will be complete by 2014. Faurecia plans to use 750,000 square feet of the 1.2 million-square-foot facility still owned by ACH. Faurecia typically likes to work in smaller plants that are about 450,000 square feet in size.
He explained the transition in staffing. Currently, there are 2,300 employees at Faurecia, including 1,950 hourly employees.
The “blue” group of employees – who hired into Ford before it spun off to Visteon and who made $28 an hour to assemble – were given the option of transferring to another plant, staying at Faurecia or taking a buyout. The “orange” group of employees, who hired in at second tier-wages with either Visteon or ACH, were given the chance to stay at Faurecia and were put on a list to get re-hired by Ford. The “green” group of employees are those who were hired by Faurecia. Assemblers begin at $11 an hour. Boufford emphasized that that no workers were swept out the door and that workers were not being transferred to the Detroit Manufacturing Systems facility in Detroit. Detroit Manufacturing Systems, a company formed by Faurecia and Rush Trucking, will do much of the assembly work currently being done at the Saline plant.
“We’re proud of the work that Ford, the UAW and ourselves did to make sure that every employee had options,” Boufford said.
He said Faurecia wants to make the Saline facility a state-of-the-art operation that will focus more on technology than assembly. While the facility currently makes parts for Ford vehicles, the goal is to achieve 15-20 percent of its business outside of Ford.
Mayor Gretchen Driskell thanked Boufford for explaining the company’s plan for its Saline facility.