Toledo Blade...
Ohio OKs $16M for Chrysler
By Jim Provance  
September 1, 2011 

COLUMBUS -- Ohio Monday dangled about $16 million in incentives in front of Chrysler Group LLC in hopes of persuading the automaker to follow through with proposals to invest $437 million in plants in Toledo and Perrysburg Township. 

The five-member Ohio Tax Credit Authority unanimously sanctioned $10 million in job-creation tax credits for Chrysler’s proposed $365 million expansion and upgrade of its factory that makes the Jeep Liberty and Dodge Nitro vehicles at the Toledo Assembly complex. The project involves the restoration of a second shift and the addition of 1,105 jobs. 

It also approved $3.3 million in job-retention credits for the $72 million upgrade at Chrysler’s Toledo Machining plant in Perrysburg Township that would preserve 640 jobs. 

In addition, Gov. John Kasich announced nearly $3 million in grants for job training, machinery, and equipment for the two projects. 

The credits against Chrysler’s commercial activity tax liability is one a series of ducks the automaker is putting in a row as it prepares to produce yet-to-be-determined new models in its Toledo Assembly complex. 

Christine Estereicher, senior manager of state relations and legislation for Chrysler, said Ohio is in competition with “other states” for the project. She declined to reveal who Toledo’s competitors may be. 

The answer from the company to some of the questions from the authority as to the timing of its decisions on the Toledo Assembly complex and its production line was “TBD” -- to be determined. 

“We’re looking at the business case for making the investment in Toledo,’’ Ms. Estereicher said. “We’re making the business case for the plant. Is the plant competitive and are the state of Ohio and Toledo competitive?” 

When pressed for details by members of the authority, she said, “Right now we do not know the specifics of the [next generation of] vehicle. We don’t know the make. Is it a car? Is it a truck? That’s what we’re considering.” 

The authority approved a $10 million tax credit, equal to 75 percent of the company’s payroll tax withholdings over 15 years, for the creation of new jobs at Toledo Assembly. The agreement assumes $35.9 million a year in new payroll as well as the preservation of some 1,700 existing jobs at the complex. 

The automaker is considering an $8 million expansion in the physical plant plus $357 million in machinery and equipment upgrades in anticipation of the next generation of vehicles to roll off the assembly lines. 

“Fantastic,” said Rodney Crider of Wooster, an authority member. “We don’t hear of many 1,100 automotive manufacturing jobs.’’ 

The proposed new jobs include 1,050 production positions, paying $14.65 an hour, and 55 management jobs paying about $90,500 a year. 

The state also has offered $1.5 million in outright grants for machinery and equipment as well as $550,000 in work-force training related to this project. 

“Chrysler is a major asset to Toledo and Ohio, and we’re doing everything we can to make the case that Ohio is the right place for the company to continue to invest and grow,” Mr. Kasich said. “I’m hopeful that we’re making progress and that Chrysler and other major manufacturers will see that Ohio is the place to be.” 

The state is keeping its fingers crossed that these projects are just the first in a line of new investments the automaker will make in the region as it attempts to roar back from bankruptcy and a federal government bailout, and gears up for new sales aimed at foreign markets. 

In a March feasibility study that Chrysler submitted to both the city and state, the automaker suggested it also was considering a new stamping plant at Toledo Assembly, with an investment of $75 million and the creation of 135 jobs. 

Such a plant was not part of the company’s more recent request for government assistance on its expansion project. Also in that March presentation, Chrysler asked for a number of transportation-related items, including construction of a new bridge over rail tracks at Matzinger Road, reduced Ohio Turnpike tolls, permission to run longer and heavier trailers for part shipments and vehicle delivery, I-75 beautification, and a billboard. 

The state carrots are the latest in a package also sweetened by local incentives. 

Toledo City Schools approved a 15-year, 50 percent property tax abatement worth $45,000 a year for 60 percent of the Toledo Assembly complex expansion located within the district. Washington Local School District, where the remaining 40 percent of the plant would be, approved a similar abatement worth $23,000 a year. 

The city is expected to consider its own incentives soon, according to Brad Peebles, Toledo’s commissioner of development. 

As for the Toledo Machining tax credit, $3.3 million was approved that is the equivalent of 50 percent of payroll tax withholdings over 10 years at the suburban Toledo plant. 

The company plans lto invest $72 million in the plant in anticipation of producing improved torque converters and steering columns at the plant for the next generation of front-wheel and rear-wheel-drive vehicles. Chrysler hopes to begin work at the plant in October, starting with the steering column, and then, beginning in 2013, with the torque converter. 

The state is also offering a $350,000 grant for equipment and machinery and $500,000 for job training for the Perrysburg Township project. 

“Obviously, with a company of that caliber and with Chrysler being very ingrained in Ohio’s economy, it’s always exciting not only to have retention but also an opportunity to get this [job] creation in the Toledo Assembly facility,” said Kristina Clause, tax-credit authority chairman. “We have a large supply network for automotive companies, so it’s important for Ohio to have Chrysler making those investments here.” 

Read it at the Toledo Blade