Saginaw Basks In $365 Million In Manufacturing Investments

Friday was a good day to be Saginaw, Michigan.

The frequently struggling manufacturing center had one of its best days ever, with announcements by General Motors that it will invest $215 million in Saginaw Metal Casting Operations resulting in addition or retention of about 275 jobs, followed by news from Nexteer Automotive it will invest $150 million in its Saginaw County operations, retaining more than 1,000 jobs.

As reported by the Saginaw News, Gov. Rick Snyder told the crowd at Saginaw Metal Casting Operations: "We are going to come back and be the best again, thanks to places like this. We need to reinvent Michigan and you are one of the role models to show how reinvention can really work."

The Nexteer investment will include expansion and upgrade of testing and validation capabilities, including an overhaul of the Nexteer Vehicle Evaluation Center. Chinese state-owned parts manufacturer AVIC Automobile Industry Holding Co. in March acquired a 51 percent stakes in Nexteer's owner, Pacific Century Motors. General Motors Co. sold the global automotive steering maker in 2010 to Pacific Century, whose majority owner is Beijing E-Town International, an arm of the Beijing municipal government.

The GM work will be for production of future engine block and head castings.

"We look forward to continuing our long and proud heritage of in-house casting for key components," said Diana Tremblay, GM's global chief manufacturing officer. "We believe these operations really enhance our ability to provide more fuel-efficient engines to our customers around the globe."

The plant, which currently has about 630 employees on two shifts, builds a variety of aluminum engine blocks and cylinder heads for some of GM's hottest products, including the Buick LaCrosse and Chevy Malibu. It opened in 1919.

"This announcement is another example of a very positive trend that is occurring at GM," said Joe Ashton, UAW vice president representing the GM Department. "Saginaw is like so many communities in the Midwest that have suffered the loss of their manufacturing jobs to other countries around the globe. I want to congratulate the members of UAW Local 668 for their hard work and helping brighten the future for Saginaw and the surrounding communities."

As for Nexteer, a developer of fuel-efficient electronic power steering technology, the investment is the result of long-term customer contracts retained through 2018.

"This significant investment is a reflection of Nexteer's ongoing commitment to the Great Lakes Bay Region and the state of Michigan and recognition of the work being done here by our highly skilled technical and UAW-represented production teams," said Robert J. Remenar, Nexteer president and CEO. "New, long-term customer contracts through 2018, including General Motor's next generation full-size pickup, will add revenue that benefits all product lines, allowing us to upgrade and expand our testing, manufacturing and innovation capabilities."

Added Gov. Snyder in a statement: "Nexteer is a showcase of Michigan's world-class technology and manufacturing capabilities. "Today's announcement offers proof positive that foreign direct investment can combine with our own valuable industrial assets for new economic vitality for Michigan. This is the message I took to Asia: serious investors know Michigan's technology leadership and work force advantages offer very real growth opportunities for all of us."

A major focus of the investment will be related to expanding and upgrading Nexteer's testing and validation capabilities. Nexteer is the only steering supplier with R&D, testing and validation capabilities entirely in-house. This complete integration provides a real benefit to global customers in terms of responsiveness and service. The company's Vehicle Evaluation Center, which is part of Nexteer's Saginaw operations, will undergo an expansion to allow for additional real-world simulations.

Nexteer's oldest plant, which currently produces pumps, will receive major upgrades with the addition of new high-tech EPS lines. Of note, approximately 45 percent of the sourcing for the EPS investment will be to Michigan based businesses. EPS is a key technology in assisting OEMs push to increase fuel economy and reduce emissions. Nexteer has EPS systems on a full range of vehicle segments, sizes and classes, from compact cars to full-size trucks. In 2010, the company produced the world's first 12-volt EPS system for the full-size truck market.

"Nexteer is experiencing significant growth and demand for its EPS systems globally," said Mike Richardson, Nexteer senior vice president, engineering and global steering business line. "Less than 10 years ago EPS represented four percent of our annual sales, last year it was nearly 30 percent and by 2015 we are anticipating that well over half of Nexteer sales will be attributed to EPS."

Nexteer is the second largest employer in Saginaw County and currently employs 3,780 individuals. Technical staff and production employment at Nexteer's Saginaw operations has grown by 20 percent since Pacific Century Motors acquired Nexteer in July of 2010.

"Nexteer has been on an aggressive global expansion and investment path for the past couple of years," added Remenar. "In addition to Saginaw, Nexteer has continued to expand its operations in India, Brazil, Poland, China and Mexico."

More at www.nexteer.com.