By LINDSAY VANHULLE - Crain's Detroit Business
September 22, 2015
LANSING — Belleville auto supplier Neapco Drivelines LLC plans a $57.7 million expansion of its Michigan operations with the help of a state incentive that will keep the company from moving some work to Mexico.
The company, a subsidiary of Neapco Holdings LLC, today won a $1.5 million performance-based grant from the Michigan Strategic Fund, a division of the Michigan Economic Development Corp.
Neapco plans to use the grant to hire at least 167 new employees — with more than half expected in manufacturing — by 2019 and expand its headquarters and technical center, said Ken Hopkins, the company's president and CEO.
The 167 jobs are expected to be on top of the 439 Neapco already employs in Michigan. Some of the new hires will be in engineering, marketing and research and development positions, Hopkins said.
The supplier has about 7,000 square feet of dedicated technical space, with plans to boost that to roughly 22,000 square feet, Hopkins said. That would allow Neapco to study improvements to fuel efficiency, lightweight materials, strength and packaging, he said.
"We’re pretty serious about looking at technology and our customers are requesting it from us," Hopkins said.
The technical center could open by 2016 or 2017, he said.
Hopkins and Neapco executives are scouting other locations in Wayne and Oakland counties for its expanded headquarters and tech center if the plans don't fit within the company's existing 300,000-square-foot Belleville facility.
The Belleville site will remain a manufacturing facility, Hopkins said. The company doesn't plan to add on to that building as part of the project.
The MEDC, in a memo to the Michigan Strategic Fund, said the company planned to expand into Novi. Hopkins said Neapco leaders have not made a final decision on a location.
The supplier in 2006 opened a plant in Saltillo, Mexico, to supply what was then Auburn Hills-based automaker DaimlerChrysler AG, the state said. With the grant, Neapco will keep some projects in Michigan rather than move them to Mexico, where labor and logistics costs are lower.
Neapco also plans to build a new 324,000-square-foot plant in Saltillo, Hopkins said.
“We were always committed to Michigan," he said. "It was just whether the new growth was going to go down to Mexico or stay in Michigan.”
Neapco received a seven-year tax credit in 2009 under the now-defunct Michigan Economic Growth Authority (MEGA) program, the MEDC said. The credit expires after the 2015 tax year. The state said Nepaco has created 355 jobs with its MEGA credit, exceeding initial plans for 285 positions.
Van Buren Township will expedite the issuance of permits, the MEDC said. Neapco also will receive a Foundation Level membership to Troy-based technology business accelerator Automation Alley, worth $17,500 annually.
Neapco primarily served as an aftermarket supplier of tractor equipment until it was bought out by four senior executives and the U.S. division of Chinese automotive supplier Wanxiang Group Corp. Since then, Neapco has purchased Dearborn automaker Ford Motor Co.’s ACH driveshaft business, as well as expanded into Europe and China.
Neapco Holdings ranked 33rd on Crain’s 2014 “Fast 50” list with $570 million in revenue in 2013. It counts Ford, General Motors Co. and FCA US LLC among its customers.