Ford requests two tax abatements for facilities
The State Tax Commission will have the last word whether or not to approve two tax abatement requests from Ford Motor Co.
After two public hearings were held Nov. 26 on the requests, the City Council approved both requests, both of which are for 50 percent for new equipment at the Dearborn Truck Plant and the Dearborn Diversified Stamping Plant.
Both are for 12 years, plus two years for construction.
The automaker, which is the biggest taxpayer in the city, will begin the work this month and is expected to complete it by the end of 2009.
According to a Ford Web site, Dearborn Diversified employs about 1,300 workers. It produces frames, suspension parts, tire and wheel and truck axels.
It is about 27 acres and encompasses 850,000 square feet. Ford is estimating it will cost $15 million to complete the project.
That facility will be installing robotics, welding and racks to “refresh” the F-Series truck line. The robotics equipment is being moved from Canada, according to the city.
The Truck plant employs about 3,000 workers. It manufactures the F-150, the Harley-Davidson F-150 and the Lincoln Mark LT.
It’s about 1,100 acres and 2.5 million square feet.
Estimated project costs at the plant are $77.5 million, according to Ford.
At that facility, the abatement is for new machinery and equipment for the new 2009 P415 truck. The equipment is for the body and paint shops, final assembly and manufacturing aids, according to documents from the city.
Mayor Jack O’Reilly said that while the concept of tax abatements have become “institutionalized,” they serve a purpose.
“Some say we know they’re going to do (the work and we know they’re not going to move,” he said. “It’s a risk … We look at it as will it create or retain jobs and will it deal with obsolete property.”
Sometimes, what’s going on among managers inside a company can have a huge effect on the direction it takes.
O’Reilly said at one point, when Ford was asking for tax abatements at its Rouge facility, that then-CEO and President Jack Nassar was considering moving those operations overseas.
Current president William Ford wanted to keep the operation here and build on his great-grandfather’s Rouge Plant legacy.
The upshot of the struggle is that the abatements were approved, Nassar left the company and Ford and Dearborn kept the plant.
“If Dearborn had taken that hard line, why should a company stay?” he said.
O’Reilly added that it’s not that a company is paying less in taxes; the tax relief comes on the new investment the company is making in upgrading its facilities or equipment.
