Manufacturing Buildup

July 21, 2006
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GRAND RAPIDS — Grand Rapids Spring and Stamping recently spent $1.2 million to buy a new press, and city commissioners granted the company an industrial tax abatement for its investment.

But the city’s most noted maker of spring and wire forms and stampings isn’t the only manufacturer investing. Four others either have or plan to spend $3.1 million on equipment and plant renovations, and they, too, have either received a city-approved abatement or are in the process of getting one.

In roughly a month’s time, these five manufacturers have told the city they intend to invest a total of $4.3 million in their businesses. And for GR Spring and Stamping, its investment resulted in the purchase of a 1,000-ton Verson press — the largest the company has ever owned.

“Our largest press used to be 600 tons, so this gives us more tonnage and a bigger bed press so we can do bigger things,” said Jim Zawacki, president of GR Spring and Stamping.

“We make bumper fascias for Nissan. We have some big tools that we’ve built for Nissan that we couldn’t try out if we didn’t have the larger bed. We’re the only tool shop in North America making tools for Nissan; otherwise they get them out of Asia,” he added.

The new press has been installed and is running in the plant at 706 Bond St. NW and also allows his firm to make parts for Steelcase Inc. Zawacki said another Verson press will likely be coming to the company and this one may be even bigger.

“We have another large press on order. We haven’t made a commitment yet, but we’re looking for up to 1,200 tons,” he said.

GR Spring and Stamping has customers in the auto, furniture, telecom and appliance industries, but the automotive work the company does likely accounts for a majority of its orders. Zawacki said he felt fortunate that his firm does business with Nissan, Toyota and Honda: Asian companies that a few analysts have projected to be the next Big Three.

“Their business hasn’t been bad, other than it has been slow for July because they shut down for a week. Business has not been good, but it’s not been bad, other than steel. The pricing of steel has killed us. It’s still high, as high as it was in 2004,” he said.

Nissan has been a GR Spring and Stamping customer for the last four years and is now the company’s largest client. So Zawacki is interested in what might develop from the talks between Carlos Ghosn, chief executive of Nissan Motor Co. and Renault SA, and General Motors Corp. CEO Rick Wagoner.

“It could mean some potential business for us because I think Nissan likes us. I think Carlos Ghosn pulled off the turnaround of the century last year with Nissan, and now he is chairman of Nissan and Renault. I don’t know how much one man can do, but I think if somebody can do it, he could do it,” he said.

Zawacki told the Business Journal that he was still considering moving some production to the former Lear plant at 2150 Alpine Ave. NW in Walker. Blue Bridge Ventures LLC CEO Jack Buchanan owns the large facility and has space available that is nearly tax-free.

“That’s not dead. When he got the Renaissance Zone, it became more interesting. We probably won’t expand in Grand Rapids. The next big press won’t go in Grand Rapids,” he said.

First Ward Commissioner Roy Schmidt described GR Spring and Stamping as a “good employer” and noted that the company will add up to 10 new jobs due to its purchase of the press. The abatement will save the firm $55,000 over 12 years on its estimated tax bill of $138,000.

Obie Manufacturing Inc., which produces metal products and assemblies, is buying new equipment that will expand its production capabilities to bring outsourced work in-house. The company at 701 Evergreen St. SE is spending $150,000 on the equipment and will save $9,000 on its new $23,000 tax bill through the 12-year abatement it recently received. Obie Manufacturing has seven employees and will add another worker from the project.

Advance Plating & Finishing Inc. is halfway through the six-step abatement process. The company is spending $920,000 to move from 1529 S. Division Ave. to 840 Cottage Grove Ave. SE, a building the company is remodeling. Advance Plating also plans to buy new electronic plating and office equipment as part of its investment. Advance has 18 employees and will add two more positions after the company completes its project. Advance plates products for the auto, furniture and entertainment industries. The company will save $38,000 of a $96,000 tax bill over a dozen years from the abatement.

International Tooling Solutions LLC also is at the halfway mark in the process and plans to invest $150,000 into a building renovation and equipment purchase. The company at 731 Broadway Ave. NW makes metal stamping dies, and the renovation will expand its design department. International Tooling has 88 employees and will hire two more from the project. If the exemption is granted, the firm will save $13,000 over 12 years on a new tax bill of $33,000.

City commissioners set tomorrow as a public hearing date for an abatement request from Paragon Firstronic of N.A. Corp., an electronic contract manufacturer for the auto, security, medical, communications and manufacturing industries at 1655 Michigan St. NE. Paragon will expand its facility by 11,400 square feet at a cost of $1.3 million. The firm will also buy $700,000 worth of new production and testing equipment to bring its total investment in the project to $2 million. Paragon recently purchased a vacant gas station at 1615 Michigan St. NE and will use that property as a parking lot and water retention site. The company currently has 51 employees and expects to create 50 new jobs from the project. An abatement would save the firm $170,000 on taxes totaling $420,000 over 12 years. The hearing is the company’s first step in the process.

If all the industrial abatements are approved, the city’s Economic Development office has figured the city will lose $63,100 in real and personal property revenue over 12 years. But the department has also concluded that the city will gain $224,000 in income tax receipts over that same period from the new jobs the five companies said would emerge from their investments.

“In a time when we see a lot of problems in the state of Michigan, we have a lot of job creation going on here,” said 2nd Ward Commissioner Rick Tormala. “We are creating jobs and receiving more money in income tax than we’re giving out in property tax.”    

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