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AutoAlliance to Add New Products and New Jobs in Flat Rock

Tuesday, August 13, 2002

Susan Shafer
(517) 335-6397

Up to 9,673 jobs secured for Michigan workers

Governor John Engler announced today that assistance from the Michigan Economic Development Corporation (MEDC) has helped convince AutoAlliance International, Inc. expand in Flat Rock, securing new automotive products and up to 9,673 jobs for Michigan workers.

AutoAlliance International (AAI), a joint venture between Ford Motor Company and Mazda Motor Corporation, plans to invest approximately $644 million in new machinery and equipment to prepare its existing Flat Rock manufacturing facility for new vehicle production.

“The Flat Rock community would have suffered a major loss if production at the AutoAlliance facility had been moved elsewhere,” Engler said.“The state’s assistance in this case not only helps secure the jobs at AutoAlliance’s Flat Rock facility, but will also result in the creation of many other good paying jobs in the community.”

AutoAlliance had considered locating the new vehicle programs and jobs in another North American location.The MEDC today awarded AutoAlliance a Single Business Tax credit worth up to approximately $94.9 million over a 20-year period to encourage the company’s decision for Flat Rock. In addition, the city of Flat Rock approved a local tax abatement worth up to $31 million over 12 years.

The project will retain up to 1,961 jobs currently at the Flat Rock facility, and add between 1,200 and 1,400 new jobs in coming years, if demand for the vehicles requires it. According to an economic analysis conducted by the University of Michigan, it is estimated that AutoAlliance’s expansion in Flat Rock will create an additional 6,323 jobs in the state indirectly. The company’s operations will result in total net state revenue increases of more than $758 million during the life of the tax credit.

AutoAlliance President Phil Spender expressed appreciation to the Michigan Economic Development Corporation, Wayne County and the city of Flat Rock for working with the company to create a strong business case for the plant’s continued viability.

“We are excited about the new Mazda6 sports sedan that we will launch at AutoAlliance this fall and what that vehicle means for the future of our Flat Rock facility,” Spender said. “The substantial investment we are making will provide an economic stimulus to the local economy and bolster AutoAlliance’s partnership with the city and state.”

Ford Motor Company and Mazda Motor Corporation entered into a joint venture and created AutoAlliance International, Inc. in 1992.Past vehicle models produced at the facility include the Ford Probe and Mazda MX-6.The facility is currently producing the Mercury Cougar and Mazda 626.In June 1999, AutoAlliance celebrated production of its 2,000,000th vehicle at the Flat Rock facility.

The Michigan Economic Development Corporation, a partnership between the state and local communities, promotes smart economic growth by developing strategies and providing services to create and retain good jobs and a high quality of life.

AutoAlliance International, Inc.
Economic Analysis
Summary Estimates
(All estimates in 2002 dollars)

TOTAL JOBS CREATED/RETAINED

9,673
Direct3,350
Indirect6,323
NET POSITIVE STATE REVENUE IMPACT$758,834,000
Revenue Foregone$94,990,000
Revenue Gain$853,824,000
Average Wage$1,030/week

Personal Income Generated Over
Life of the Tax Credit Agreement

$10,672,800,000

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