Automotive supplier plans to open $12M expansion by early next year
The Clarion Ledger
August 30, 2006
Tower Automotive, which is now leasing in the former Delco-Remy building in Meridian, is undergoing a massive expansion project, including a 90,000-square-foot stamping facility currently under construction. The company ultimately plans to employ 230 workers.
The flood of nearly 3,000 applications for about 230 positions at a Tower Automotive plant in Meridian could be the proof east Mississippi can support an auto plant.
Tower, a manufacturer of steel sub assemblies for cars, vans and trucks, already is operating with just about 100 employees in a revamped Meridian building.
But contractors are constructing a second, $12 million building, which the company wants to open early next year.
The near miss of landing Kia Motor Inc.'s first U.S. plant this spring is still fresh in developers' minds. And attracting auto suppliers, such as Tower, might elevate Meridian's chances should another automaker come looking.
"There's no doubt that by building a supplier base and showing that you have the work force for technical assembly, that should make us more attractive to more plants and larger plants," said Wade Jones, president of the East Mississippi Business Development Corp.
"If we were able to land an engine- or transmission-making facility, that would be great, and it would bring 1,000 jobs."
Meridian was a contender for the 2,500-position Kia plant, but in March, its parent company, Hyundai, decided on West Point, Ga. Officials from Kia said Meridian's population - which stands at 39,600 - was a concern.
An employment expo for Tower this month collected more than 925 applications for the 120 remaining jobs at the plant. Those resumes are in addition to the 1,800 collected earlier. Assembly line positions will start at about $9 an hour with maintenance mechanics and die technicians making more than $16 an hour. Jones said the plant could draw a work force from a 65- to 100-mile radius, which includes the Jackson area and western Alabama.
Despite the overwhelming acceptance in Mississippi, business elsewhere is tough for Tower.
The Michigan-based supplier went into bankruptcy in February 2005 with about $1.7 billion in debts. Although it has received six extensions from the U.S. Bankruptcy Court in Manhattan, it has not struck an agreement with its creditors or filed a reorganization plan with the court.
The company blamed changes in the timing of customer payments, high steel prices and a general slowdown of automotive production for its ills. It also has had to negotiate agreements with unions as it deals with salary expenses, retired employees and increasing health-care costs.
That's why Craig Hitt, chairman of the Lauderdale County Board of Supervisors, said he was careful to examine the company before voting on an $8 million bond issue. The money helped pay for renovation of the county-owned Delco-Remy building in the South Industrial Park.
"(The bankruptcy) was certainly a major concern for all of us. But what took it over the top for us was their construction of another building with $12 million of their own money. Once that was secured, we felt comfortable with it," he said.
Tower is leasing the 310,000-square-foot Delco-Remy building - which had stood vacant about a decade - and owns outright the adjoining 90,000-square-foot stamping facility under construction. It will repay about $4.75 million of the bond issue, and the county will pay the remainder over 20 years.
The addition will house presses from plants in Indiana and Tennessee that are closing.
The Meridian plant will stamp and partly assemble frame and lower body pieces for Nissan and Infiniti vehicles produced in Canton and Smyrna, Tenn.
"Their payscale is above average for our local jobs and they're telling us they hope to expand to 400 jobs," Hitt said. "We didn't see any citizen opposition, and the board voted unanimously."
Another $2 million for the project came from the Mississippi Development Authority, the East Mississippi Business Development Corp. and insurance money collected from damages the building sustained in Hurricane Katrina.
William Jeanes, a Mississippi-based automotive writer and former Car and Driver magazine publisher, said despite Tower's financial troubles, the company is likely to stay in Meridian.
"You'd certainly like to think that the MDA, Meridian and Lauderdale County got some good advice on it," he said. "In this day and time, $8 million isn't much to put out for a supplier."
As for grabbing economic development's brass ring of a second auto assembly plant through building a supplier base, Jeanes said it usually happens the other way around.
"But having (Tower) there is a good indicator that there's a skilled and trainable work force," he said. "The good news is what the automotive industry is doing for Mississippi. We almost can't have enough manufacturing plants."
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