©2016 Michigan Economic Development Corporation

Michigan Wins Battle to Keep More Than 1,800 Federal-Mogul Jobs in State

Tuesday, December 14, 2004

Paul Krepps, MEDC
(517) 335-4590

Company to Invest $6 Million in Greenville and St. Johns Plants

In a complete reversal of prior indications that Federal-Mogul would transfer jobs to Mexico or other locations from Greenville and St. Johns, Governor Jennifer M. Granholm today announced that the company will instead make new investments in the two plants and retain the company's 1,866 Michigan workers. Federal-Mogul's decision came as a result of the Governor's personal involvement and a new law she backed that allowed for a successful incentive offered by the Michigan Economic Development Corporation (MEDC).

The MEDC approved a Single Business Tax credit valued at more than $65 million to help convince Federal-Mogul to remain in Greenville and St. Johns. The company is expected to invest approximately $6 million in these two facilities.

"In a global market, we have to fight for jobs and make a strong business case that our companies can and will grow here," Granholm said. "What matters most, is that more than 1,800 families in Greenville, St. Johns and Federal-Mogul operations around the state will enter the holiday season knowing that their jobs are secure."

The city of Greenville will support the project with an abatement of the company's new real and personal property taxes for 12 years valued at $140,000. The city of St. Johns will also provide a local abatement valued at an estimated $186,000 over six years.

"It's always good news when our facilities-especially those in our world headquarters state-can be successful in this increasingly competitive global industry," said Richard Randazzo, senior vice president, Federal-Mogul Human Resources. "We appreciate the support we received from Governor Granholm and the State Legislature. Their assistance demonstrates the dedication to saving Michigan jobs."

A University of Michigan economic analysis estimates that 7,678 indirect Michigan jobs will be retained as a result of increased economic activity associated with the project, in addition to the 1,866 jobs retained directly by the company. The project is expected to generate more than $7 billion in personal income for Michigan workers over the life of the tax credit.

"We are heartened by Federal-Mogul's continued commitment to Michigan and its workforce," MEDC President and CEO Don Jakeway said. "The presence of this pre-eminent supplier helps to assure Michigan's continuing leadership in the global automotive industry."

The retention of Federal-Mogul is one of 10 major economic development projects the Governor announced today. In all, they are expected to create and retain a total of 9,983 Michigan jobs, including 2,229 directly by the companies and redevelopments.

Federal-Mogul is a leading global supplier offering a comprehensive portfolio of quality products, trusted brands and creative solutions to the automotive and other industries. The company's principal customers include many of the world's foremost original equipment manufacturers of vehicles and industrial products, and aftermarket retailers and wholesalers. Headquartered in Southfield, Michigan, Federal-Mogul employs more than 45,000 people in 29 countries.

In her 2004 State of the State address, Governor Granholm announced her plan to make Michigan a global economic powerhouse in the 21st century. So far this year, the Governor and the MEDC have announced the creation or retention of approximately 53,857 jobs as a result of targeted assistance provided by the MEDC.

The MEDC's ability to support Federal-Mogul's continuing growth in Michigan was made possible by a change in the Michigan Economic Growth Authority Act. The law now allows Federal-Mogul and companies in similar circumstances to apply for Single Business Tax credits if the jobs they are creating or retaining are spread among several plants at different Michigan locations.

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.

Federal-Mogul Corporation
Economic Analysis
Summary Estimates
(All estimates in 2004 dollars)

TOTAL JOBS RETAINED9,544
Direct1,866
Indirect7,678
NET POSITIVE STATE REVENUE IMPACT$479,539,000
Revenue Foregone$65,490,000
Revenue Gained$545,029,000
Average Wage$1,174/week
Personal Income Generated Over
$7,087,497,000