MEDC Chief Courts German Auto Executives

June 5, 2002
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LANSING — Despite a bearish national economy, the state’s top economic development officer feels German manufacturers are still bullish on Michigan.

Michigan Economic Development Corp. President and CEO Doug Rothwell recently returned from a 10-day, five-city swing of the western European nation and cleared Customs with an optimistic sense that a handful of German-owned firms will either build or expand in the state.

“The thing that I was really struck by is how bullish the German automakers are about the North American auto industry,” he said.

“These are medium-to-large sized manufacturers, well-established firms, many of which have brand names that would be recognized and are very much in the financial position to expand.”

Rothwell said he visited about a dozen companies, accompanied by executives from Fiat and DaimlerChrysler. Of the officials he met with, Rothwell said he came away with half-a-dozen leads that may create 1,500 to 2,000 new jobs across the state, including some for West Michigan.

“There were a couple of projects on the west side that were talked about,” he said. “On the west side, it was more manufacturing. On the east side, it was probably more oriented toward engineering centers.

“But still, good projects with good quality jobs — some of which, I think, is reasonable to say may happen this year.”

Although he said it’s too early to identify any of the firms yet, Rothwell described these as tier-one auto suppliers that make either major component systems or specialized parts. He added that each expressed an interest in being closer to the automotive core.

“I also think that they see Michigan as the geographic center of the auto industry, even though there are an increasing number of manufacturing facilities in the south. If you look at the distribution of manufacturing facilities, between Canada and the southeastern part of the U.S., Michigan is really at the center and is the brain center of the auto industry,” he said.

“So for the engineering and R&D centers, particularly, they realize that Michigan is the place to be.”

Two new German companies in the state provide proof that backs Rothwell’s statement.

Goertz & Schiele, a firm that makes powertrain components, recently revealed that it will build a new manufacturing plant in Auburn Hills.

The company had considered going to Kansas or North Carolina, but an executive said he chose Michigan because of the state’s automotive heritage and proximity to the major players.

Closer to home, paragon AG wants to relocated at 1655 Michigan NE so it can produce electronic circuit boards for the auto industry. Paragon AG also makes the world’s smallest air quality sensors, and was enticed to come here by The Right Place Program.

But location isn’t the only reason why these firms come to Michigan. One reason, Rothwell said, is that the state promises to deliver personalized customer service after these firms set up shop here. Another is financial incentives, like tax abatements and Renaissance Zones. Together, both are seen as giving Michigan a battle-tested edge in the fiercely fought recruitment wars.

“We realize how competitive this world is because all of them talk about incentives. They are very accustomed to doing that now,” said Rothwell of the German executives. “So they expect it and they also, I think, have reason to expect it since many of these projects are really within a stone’s throw of the border and could go over state lines without too much of a problem.”  

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