A German auto parts maker will move its U.S. headquarters from Wisconsin to the Mississippi community of Shannon, opening a factory in this state that is expected to create up to 650 jobs.
Grammer AG announced the move Wednesday, in a ceremony with Gov. Phil Bryant near Tupelo. The company makes automotive interiors and commercial vehicle seats.
The company, based in Amberg, Germany, will invest $30 million over five years, with plans to open the first phase by the end of 2014. The company plans to hire 350 workers in the first phase and 300 in the second phase, paying an average of $12.50 an hour, or about $25,000 a year.
Grammer will occupy an 80,000 square-foot building, constructed by the Community Development Foundation to attract industry, with plans to expand by 40,000 square feet in a second phase.
Not counting some tax breaks, the state and local government would invest $22.5 million in supporting the plant.
The Mississippi Development Authority will spend $10.8 million to build out the plant, ship equipment to the site, train workers and help build the second phase. It also will loan $2.7 million to Lee County, to buy the building and make other improvements. Grammer will lease the building from the county.
The state has pledged $6.2 million to support the second phase, while Lee County has pledged $2.8 million to prepare the site for the second phase.
It’s a big boost for Lee County, where Heritage Home Group is closing the Lane Furniture plant in Saltillo, laying off 480 people. Economic development officials have been working to diversify the area’s economy away from its historic dependence on furniture manufacturing.
“Our automotive industry has seen amazing growth in recent years, and Grammer’s announcement today further positions Mississippi as a key player in the southern automotive corridor,” Bryant said in a statement.
CEO Hartmut Mueller said Grammer chose the site “after a thorough evaluation of different opportunities.”
The company has been selling its products, including seats for construction machinery, tractors and forklifts, as well as trucks, buses and trains, for 35 years in the United States. The company’s automotive unit makes headrests, armrests and other items for automakers. The company has two automotive unit plants in Mexico.
Chief Financial Officer Volker Walprecht said at Wednesday’s ceremony that the company hopes to double its sales in the United States over the next five years. It will make seats for outdoor equipment, vehicle consoles and headrests in Shannon.
Grammer opened a warehouse in Wisconsin in 2011 and started making seats there in 2005. Grammer says it operates in 17 countries, with annual revenue of more than $1.5 billion.