©2016 Michigan Economic Development Corporation

General Dynamics Expansion in Macomb County Supports Armored Vehicle Production, 1,149 Jobs

Tuesday, February 19, 2008

Bridget Beckman, MEDC
(517) 335-4590Beckmanb1@michigan.org

Michigan bests Virginia, Florida and Ontario for $10 Million Expansion

Governor Jennifer M. Granholm today announced Sterling Heights-based General Dynamics Land Systems (GDLS) will invest $10 million to expand its operations in Sterling Heights and Shelby Township. The project is expected to create 500 new jobs at the company and an additional 649 spin-off jobs over the next 12 years. Assistance provided by Michigan Economic Development Corp. helped convince the company to choose Michigan for the expansion over competing sites in Virginia, Florida and Ontario. 

"The decision of GDLS, the world's largest supplier of armored military vehicles, to grow in Michigan reinforces our position as a leader in defense-related research and manufacturing and the best place in North America for global companies to invest and grow new jobs," Granholm said.

Based on the MEDC's recommendation, the Michigan Economic Growth Authority board today approved a state tax credit valued at $19.7 million over 12 years to secure the military contractor's investment. To support the project, the city of Sterling Heights has proposed a nine-year abatement worth $185,000. Shelby Township is considering a five-year abatement worth $70,000.

"This project validates Granholm's decision to create a Defense Contract Coordinating Center (DC3), the first in the state's history, to connect manufacturers of all sizes with military supply contracting opportunities and draw more Pentagon business our way," MEDC President and CEO James C. Epolito said. "We appreciate the support and cooperation of Sterling Heights and Shelby Township in helping to make a strong business case for a top military contractor to keep the business here."

An economic analysis conducted by the MEDC estimates that increased economic activity created by the expansion will generate an additional 649 indirect Michigan jobs, in addition to the 500 created directly by the company. The project is expected to generate more than $825 million in personal income for Michigan workers over the life of the tax credit.

"Almost four years ago General Dynamics Land Systems established a 325-person engineering development center for the Army's Future Combat System after receiving Michigan Economic Development assistance," General Dynamics Land Systems President David K. Heebner said. "The project announced today will result in the immediate creation of new jobs and laboratory facilities and the possibility exists for continued growth.  After comparing Michigan's state tax credit both nationally and internationally, it made the most business sense for General Dynamics to continue our commitment in Michigan."

GDLS, formed in 1982 when Falls Church, Va.-based parent General Dynamics Corp. acquired Chrysler Corp.'s defense operations, has 8,000 employees in 12 states. General Dynamics (NYSE:GD) employs 83,500 worldwide and reported 2007 revenues of $27.2 billion. It is a leader in production of land and amphibious combat systems, mission-critical information systems and technologies, shipbuilding and marine systems and business aviation. 

"General Dynamics not only plays a key role in providing quality careers for residents of our community, it also is a valued contributor to our community's quality of life with long-standing commitments to the Community Foundation, Memorial Day Parade, Sterlingfest Art & Jazz Fair and various Parks and Recreation programming," Sterling Heights Mayor Richard Notte said. "We are pleased and grateful for its expansion and dedication to this city."

The General Dynamics expansion is one of seven economic development projects the governor announced today. In all, they are expected to create a total of 2,225 Michigan jobs.

"General Dynamics has distinguished itself in the community of manufacturing and R&D corporations with global operations," Shelby Township Supervisor Ralph Maccarone said. "By taking advantage of the competitive edge these incentive programs offer to expand their footprint in Michigan, the company has made a commitment to Shelby Township that we are proud to have been a part of."

In her 2008 State of the State address, Granholm emphasized the importance of creating opportunity in the changing world of the 21st century. Since January 2005, the governor and the MEDC have announced the creation or retention of more than 220,000 jobs as a result of targeted assistance provided by the MEDC.

The Michigan Economic Development Corp., 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. For more information on MEDC initiatives and programs, visit the Web site at www.MichiganBusiness.org.

General Dynamics Land Systems Inc.
Economic Analysis
Summary Estimates
(All estimates in 2008 dollars)
 Direct   500
 Indirect    649
  Revenue Foregone   $ 19,781,000
  Revenue Gain    $63,539,000
 Average Weekly Wage   $ 1,461
Personal Income Generated Over
Life of the 12-Year Tax Credit Agreement  $ 826,207,000

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