Economic Development, Human Resources, and Manufacturing

Challenge Manufacturing plans 180 auto jobs, $10M expansion

March 27, 2013
| By Pete Daly |
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Wyoming auto supplier plans $26-million expansion, 150 jobs
The Right Place. Image via fb.com

Two economic development agencies — The Right Place in Grand Rapids and Lakeshore Advantage in Zeeland, in collaboration with The Michigan Economic Development Corp., the city of Holland and the city of Walker — have announced the approval of a $1 million Michigan Business Development Program performance-based grant for Walker-based Challenge Manufacturing Co.

The grant will be used to support an upcoming expansion at the company’s Holland and Walker factories and is contingent on the creation of 180 new jobs at Challenge Manufacturing.

The company, which received a tax abatement from the city of Walker in 2011 worth $1.4 million, plans to invest $10 million to expand its metal stamping and modular assembly operations in West Michigan, due to its increased customer orders from the automotive industry.

According to a joint announcement from The Right Place and Lakeshore Advantage, the new jobs at Challenge will be full-time and will include benefits. The positions will range from technical to skilled and unskilled production opportunities, with the majority of the jobs being in production.

“As a proud West Michigan-based manufacturer, we are very pleased that this latest expansion of our business will happen at home,” said Boyd Vor Broker, one of the owners of privately-held firm. “The support of state and local economic development made expanding in West Michigan much more economically feasible.”

The news media was advised that Challenge officials would not comment further on the grant.

The Right Place and Lakeshore Advantage said that automakers are continuing to put increased pressure on supply chain manufacturers to locate production facilities within close proximity of final assembly plants. The announcement adds that with its increasing customer orders, Challenge continues to face pressure to expand in the Southern U.S. and abroad, but with the economic support from state and local resources, Challenge was able to invest in West Michigan.

“This project exemplifies the comprehensive teamwork required to support growing West Michigan businesses,” said Birgit Klohs, President and CEO of The Right Place. “Two economic development organizations working together with state and local support were able to assemble a business package that ensured 180 new jobs and $10 million in capital investment stayed in West Michigan.”

Challenge Manufacturing reportedly employs more than 1,000 at its four plants in West Michigan, including three in Walker and one in Holland.

“With three expansions in the past three years, Challenge Manufacturing is among the fastest growing companies throughout West Michigan,” said Randy Thelen, president of Lakeshore Advantage. “By working quickly and efficiently with our economic development partners, we were able to successfully capture additional jobs and investment in our region, which is what economic development is all about.”

Walker and Holland have both offered local tax abatements in support of this project.

Challenge, an auto industry supplier in Walker since 1981, invested more than $16 million in 2011 for an expansion that would increase employment by 90 people in mid-2012. In return for the new jobs, Walker granted it a 12-year property tax abatement worth $1.4 million.

Signed into law by Gov. Rick Snyder in December, the Michigan Business Development Program provides grants, loans and other economic assistance to qualified businesses that make investments or create jobs in Michigan, with preference given to businesses that need additional assistance for deal-closing and for second stage gap financing.

The MSF will consider a number of factors in making these awards, including: out-of-state competition, private investment in the project, business diversification opportunities, near-term job creation, wage and benefit levels of the new jobs, and net-positive return to the state. Business retention and retail projects are not eligible for consideration of these incentives.

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