©2016 Michigan Economic Development Corporation

Detroit Diesel $275 Million Upgrade Impacts 2,928 Jobs in Michigan

Wednesday, February 23, 2005

Michael Shore, MEDC
(517) 335-4590

Redford Plant Targeted for New 'Manufacturing Center'

Governor Jennifer M. Granholm today announced that Detroit Diesel Corporation (DDC), a subsidiary of DaimlerChrysler AG, has agreed to invest $275 million to transform its 65-year-old Redford Township plant into a "manufacturing center" to service the DaimlerChrysler Commercial Vehicle division. The Michigan Economic Development Corporation offered an incentive package to convince the company to expand its operations in Michigan. The economic impact of the upgrade is expected to create and retain a total of 2,928 jobs.

"Today's announcement is a win-win-win for the workforce, the company and the people of Michigan, demonstrating - once again - that Michigan is the vital center of the global auto industry," said Governor Granholm This is one of several announcements resulting from our investment mission to Germany and illustrates the importance of an energetic, focused economic strategy to build on our state's strengths even as we seek to diversify our economic base."

The MEDC approved a Single Business Tax credit valued at approximately $9.1 million over 10 years as well as a $143,000 Economic Development Job Training grant to convince the company to choose Michigan over a competing site in South Carolina.

The expansion of the technical capability of Detroit Diesel will accommodate the production of a new family of heavy-duty diesel engines, the assembly of Mercedes-Benz MBE 900 diesel engines, and the relocation of the Sterling Truck/Western Star Trucks corporate headquarters to the Redford campus of buildings.

"Detroit Diesel is extremely pleased to announce this major new investment in the Redford facility," DDC President and Chief Executive Officer Carsten Reinhardt said. "The decision to move ahead with a sizeable upgrade of the Redford facility shows tremendous confidence in the capabilities of our workforce and operations. We also acknowledge the leadership shown by the UAW in helping the Redford location qualify for those incentive packages."

Under the agreement, Detroit Diesel will retain and create 1,232 jobs. A University of Michigan economic analysis estimates that 1,696 indirect Michigan jobs will be created as a result of increased economic activity associated with the expansion. The project is expected to generate more than $1.47 billion in personal income for Michigan workers over the ten-year life of the tax credit.

Granholm praised the efforts by the company and the United Auto Workers as well as Redford Township officials for working with MEDC to finalize the agreement. "This project could not have occurred without enlightened and cooperative labor-management relations and state and local governments working to keep this skilled talent pool working here."

"We are thrilled that Detroit Diesel will be continuing its long-time partnership with Michigan," MEDC President and CEO Don Jakeway said. "The company's plan for further investment here is a testament to our business-friendly environment and talented workforce."

In November, Granholm, in her first overseas travel as Governor, led an investment mission to Germany to talk with industry leaders there about the value of increased investments in Michigan. The Detroit Diesel expansion is the fifth successful agreement to result from the five-day visit.

In her 2005 State of the State address, Granholm emphasized the importance of making Michigan a global economic powerhouse in the 21st century. In the past 12 months the Governor announced the creation or retention of more than 80,423 jobs as a result of targeted assistance provided by the MEDC.

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.

Detroit Diesel Corporation
Economic Analysis
Summary Estimates
(All estimates in 2005 dollars)

Revenue Foregone$9,168,000
Revenue Generated & Retained$113,349,000
Personal Income Generated Over Life of MEGA Agreement$1,473,983,000
Average Weekly Wage - Retained Jobs$930
Average Weekly Wage - New Jobs$720