The Ohio Tax Credit Authority voted unanimously Tuesday to grant a 15-year tax credit worth up to nearly $10 million to Fuyao, the China-based auto glass manufacturer that plans to open its first North American manufacturing plant at the former General Motors facility in Moraine.
The 75-percent state tax credit is worth up to $9.69 million if Fuyao Glass America Inc. lives up to its promises: hire 800 employees and generate an annual payroll of $32.5 million by the end of 2019 and stay at the Moraine facility for at least 18 years, according to the Ohio Development Services Agency.
The state tax credits are in addition to a $700,000 grant from Montgomery County for infrastructure improvements and a $1 million, five-year forgivable loan from the city of Moraine. The city loan is contingent on Fuyao hitting certain benchmarks.
“The package that the state of Ohio, Montgomery County and the city of Moraine put together for Fuyao was extremely important in order to attract this investment in Moraine,” said Kristi Tanner, JobsOhio managing director for automotive. “We believe that it was a responsible package and yet also very competitive.”
Fuyao, which is based in China, bought a little more than 1-million square feet of the former GM plant and is planning to invest $230 million in fixed assets, JobsOhio project manager Ryan Wilson told the tax credit authority. Fuyao did not send a company representative to the meeting.
“Moraine is, I think in their words, freakin’ excited about it. It’s a very big deal. When General Motors left that community and the Dayton region in general, my hometown, it was a pretty big blow. So this is certainly a good win not just for the city but for the region and for the state,” Wilson said.
The building will undergo renovations and hiring for manufacturing positions will begin at the end of 2014. “It’s really going to be the whole gamut of employees you’d need for a large manufacturing center,” Wilson told the tax credit authority members.
Wilson said Fuyao will install large, long furnaces with conveyor belts that will heat flat glass pieces to precise temperatures so that it can be bent and molded into auto glass. Fuyao has already ordered molding machines from Toledo-based Glasstech Inc., he said.
Fuyao, which has 18,000 employees worldwide, is the largest auto glass supplier in China and controls 18 percent of the global market. Its customers include GM, Chrysler, Honda, Hyundai and Kia.
Dave Burrows of the Dayton Development Coalition said Ohio was competing against Michigan and Indiana for the Fuyao project. Burrows told a group at the Dayton Area Chamber of Commerce meeting Columbus that local government incentive packages can nudge company officials in the right direction. “It doesn’t make the decision but it helps get the decision over the top,” said Burrows, who worked on the Fuyao project with JobsOhio.
Burrows said Fuyao will need qualified suppliers, general contractors, industrial suppliers and tool suppliers in the coming months and years, which will help spur more jobs in the region.
Wilson noted that Fuyao Chairman Cao Dewang has committed to paying employees at the Moraine plant “above market rates.”
“This is a really big deal because this is a good company that takes care of people, is creating jobs that people can live off of and buy a car off of and raise a family off of. We’re really excited about this. Hopefully this is going to really help Moraine, help the city of Dayton,” Wilson said. “Definitely a nice story behind it, going into the former General Motors building.”
The Tax Credit Authority also approved a 15-year, 85 percent tax credit for General Electric Co. for its plan to build a shared service site in the Cincinnati area. If GE lives up to the terms of the agreement, the credit is worth up to $51 million over 15 years.
GE plans to consolidate services such as human resources, information technology and other back office operations into one place. The project is expected to create 1,400 new jobs with $111 million in additional payroll by the end of 2017. Roughly 326 GE workers in Ohio will be relocated to the new, leased facility. GE wants to start using the tax credit in 2015.
“They’re going to be hiring people hand over fist,” said Clif Morehead, GE’s regional manager for government affairs and policy. GE picked the Cincinnati area because of its workforce pool and attractive amenities, he said. The specific site has not yet been selected.
Morehead said the hiring will be a mix of new college graduates and mid-career professionals.
Fuyao by the numbers
$10 million: Value of a 75%, 15-year tax credit the state is giving the company.
800: Number of employees the plant is expected to have.
$32.5 million: Annual payroll expected from the plan by the end of 2019