- By Matt Sanctis Staff Writer
A Japanese auto parts manufacturer’s decision to boost its investment in Springfield five-fold and take over an entire business park seemed to gel in a matter of weeks.
But interviews with those involved show luring the company to Springfield involved complicated negotiations and resulted from years of work to restore a long-abandoned manufacturing site in the heart of the city.
Topre America Corp. had announced plans in mid-December to invest $10 million and create 20 jobs in a 20,000-square-foot plant at the Champion City Business Park after acquiring a contract to build high-strength steel parts for Honda.
READ MORE: Honda supplier to expand in Springfield
Three months later, that deal blossomed into a $55 million investment that will create 85 jobs in a 146,000-square-foot facility, with the expectation that even more jobs might be on the way in the coming years.
The new jobs are important but the news also came at a time when Springfield needed a psychological victory, said Horton Hobbs, vice president of economic development for the Chamber of Greater Springfield.
A report from the Pew Research Center last year showed Springfield tied for the biggest decline in economic status in the U.S. since 2000. Springfield also sustained the biggest loss in median income during that span, according to the report.
“You can almost argue we’re the birthplace of truck manufacturing,” Hobbs said. “When you have that history for as long we’ve had it and it goes away, there’s almost a sense of failure. But the reality is when an announcement like this happens, it creates a sense of hope.”
Topre’s plant will go on a roughly 30-acre industrial site that once housed an International Harvester/Navistar factory until it closed in 2002. The business park was completed in 2013 after a decade of cleaning up industrial contaminants and improving infrastructure. That work was a key element of Topre’s decision to select Springfield over competitors across Ohio and in other states.
When it opened, the Champion City site was expected to attract several manufacturing firms and add jobs over a span of several years. Now Topre will take over the entire business park in anticipation of future growth.
“One of the neat parts of this story is to have people working again at that site, which was such an important symbol to Springfield when International was there,” said Warren Copeland, Springfield’s mayor.
Hobbs compared the promise of Topre’s investment to Fuyao Glass America, although on a smaller scale. In both cases manufacturing firms have pledged to bring new life to properties that had been abandoned after providing stable, middle-class manufacturing jobs for decades in their respective communities.
Fuyao, a Chinese auto glassmaker, took over a shuttered General Motors assembly site in Moraine in 2014 and has since grown into a manufacturing giant, providing jobs for more than 2,000 workers.
Topre’s plan isn’t nearly as large. The Japanese firm specializes in stamping and producing high-strength steel, which is increasingly in demand as auto makers work to produce strong, light-weight vehicles that can withstand crashes but are light enough to improve fuel efficiency.
Both projects have meaning beyond the jobs and financial figures, Hobbs said.
“When that Fuyao announcement hit the papers in Dayton, a major Chinese investor taking over the old GM plant, it was about massive employment,” Hobbs said. “But more than that it was a psychological victory for Moraine and that area. The same goes here. It was a confirmation to our community that if we work hard enough and we prepare for these opportunities, the luckier we seem to get.”
There’s likely to be strong demand for Topre’s products for the foreseeable future, said Michelle Krebs, an analyst for Autotrader.
The auto industry hit a sales record in 2015 and many experts expected a slight dip in 2016. But automakers had an unexpectedly strong December, pushing 2016 over the top. Honda met an all-time sales record last year, part of an industry-wide trend in which automakers hit a record 17.5 million vehicles sold.
Most analysts expect demand to level off somewhat this year. However because auto sales are at record highs, Krebs said even flat sales or a slight decline means there’s still plenty of demand for new vehicles.
“We are at a sales peak, but it’s a very high sales peak,” she said.
Federal legislators have discussed a border adjustment tax as part of proposed tax reforms. That proposal would tax imported products and provide a rebate for exports.
That has caused some manufacturers and suppliers to re-evaluate where they produce parts, Krebs said, in order to minimize the impact of those regulations.
Topre’s plans expanded quickly once the company made its original announcement last December, Topre America Vice President Brad Pepper said. The company quickly acquired additional work from Toyota and also will produce parts for the Toyota RAV4.
Local leaders and company executives were still working on the initial plans for the smaller project, Hobbs said, when it became clear that Topre’s corporate offices was ready to move ahead with a bigger proposal.
“It was like sausage-making,” Hobbs said. “There were a lot of phone calls and emails going on in meetings while we were talking about the 20,000 square-foot building. The next thing you know, there was a realization in the room that this was much bigger than we ever planned.”
The company expects to have about 20 workers in place as early as September to begin producing parts for the Acura MDX, Pepper said. Once the initial building is in place, the firm will begin expanding around that initial footprint.
Additional employees and managers could be in place as early as 2018 and Topre expects the site to be fully operational by the fourth quarter of 2018, Pepper said. The company’s average wage will be about $19.50 per hour, he said.
Any future expansion will depend on the company acquiring additional projects from automakers, Pepper said. But he noted a Topre facility in Tennessee grew from 12 employees to 150 workers in recent years. A $50 million expansion is now underway to build a stamping facility near that site that will employ another 100 workers.
Topre’s plan is to increase its U.S. production capacity by about 50 percent in the U.S. in the coming years, Pepper said. Judging from the company’s past experience, he expects another expansion in as little as three to five years if the company secures additional projects.
“Almost as soon as we finish constructing the building, we’re starting the next phase,” Pepper said of previous projects.
A decade of work pays off
The Champion City Business Park, near the intersection of Lagonda and Belmont avenues, has a manufacturing history dating as far back as 1882. International Harvester/Navistar’s Lagonda Assembly Plant was the longest-running manufacturing facility in the state when it closed in 2002.
The site’s future was unclear and its closure left a vacant industrial site in a key corridor of the city. Instead of abandoning the property, Navistar helped the city acquire the site and eventually redevelop it into a business park, said Copeland, Springfield’s mayor.
It cost more than more than $12 million in grants and private funding to demolish the old factory, clean up contamination and install new infrastructure on the property.
“We got amazing cooperation from Navistar,” Copeland said. “When we started we were a little concerned about how much they’d be willing to participate in this, even though they clearly had a responsibility for cleaning up their old site. But they cooperated with us at every step and they deserve some credit for us having the site available at this point.”
More than a decade later, local leaders said the property was one of the keys that led Topre to take a closer look at Clark County. Local economic development officials initially showed other sites, including the PrimeOhio II Corporate Park along I-70. Typically, companies like Topre tend to seek easy access to the highway to quickly transport finished parts to automakers like Toyota and Honda, Hobbs said.
The Champion City site isn’t located directly along a major highway. Topre also initially wanted to move into an existing building, which wasn’t available at Champion City.
In the end, one of the features that likely initially made the site useful for International for decades was also attractive to Topre. The natural bedrock at Champion City is a perfect fit for the massive stamping machinery Topre plans to use in its manufacturing processes, Copeland said.
“The Buck Creek bedrock turns out to pay a real premium for us in this project,” Copeland said. “I think without bedrock, we’d have a tough time with them.”
The Clark County Community Improvement Corp. will acquire the property and sell the site to Topre.
“The CIC, and Horton Hobbs in particular, deserve all the credit,” Copeland said. “When they started, the company wanted an already existing factory but Horton didn’t let no stop him. He kept working with them and the result is great.”
Topre has a history of expanding at its other facilities across the U.S., Hobbs said, and the firm could eventually become a major employer in Clark County.
“It’s humbling to know we’ll be on a site that’s been in manufacturing since the 1880s,” Pepper said of the former International site. “Everybody’s excited to be a part of this community and help revitalize that site.”