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The Allen County Council on Thursday unanimously approved a tax abatement for General Motors Corp. in what is likely the first of several incentives that local and state governments will provide to retain jobs at the local truck assembly plant.
With the tax break, GM could save $600,000 over the course of 10 years. But the Detroit-based automaker will pay an extra $338,000 in property taxes during that time, said Ashley Steenman, of the county’s economic development office.
GM is among the county’s largest payers of property taxes, paying $4.4 million last year despite several current abatements.
Plant officials hope to persuade GM to make a $46 million investment at the plant. GM asked to abate the taxes on $27 million of that investment. New equipment would be installed so the plant could produce a mix of light-duty and heavy-duty pickup trucks. The investment would retain 50 workers with a payroll of about $2.8 million.
The plant currently has 2,600 workers with a total payroll of $141 million, Steenman said.
Plant controller Mary Tonne told the council that the project would enhance the plant’s competitiveness and allow it to meet customer demands by producing a mix of trucks. That will provide job security, and the workers could continue contributing to the local tax base, Tonne said.
Local GM spokeswoman Alicia Kocher said corporate officials appreciate the council’s support for the proposal but the vote was just one of many steps needed before the new equipment would be installed.
“I hope next month we’ll find out whether or not we’ve been given the go-ahead,” Kocher said.
The plant could have competition from other GM factories.
A plant in Flint, Mich., already makes heavy-duty trucks and is interested in producing more.
Heavy-duty pickups were made at GM’s plant in Oshawa, Ontario, that closed last month. The heavy-duty pickups were also made at a Pontiac, Mich., assembly plant, which is slated to close in October.
State and county officials are working to provide additional incentives, but the details haven’t been finalized. Fort Wayne leaders also might get involved because so many GM workers live in the city, said County Councilman Darren Vogt, R-3rd.
Officials are considering a lease-buyback arrangement on the equipment, similar to a deal approved for Woodburn’s BFGoodrich tire plant in 2002. The council could consider such a deal at its meeting in July, Vogt said.
“We need to keep them here,” he said of GM.
Commissioner Nelson Peters said the decision to allow the abatement and retain jobs at the plant was a no-brainer.
In comparison, other cities are struggling to reopen closed plants, he said.
