Global MFG - Aug 29, 2019
A Tale Of Two Cities: Great Michigan Manufacturing News From Opposite Corners Of The StateJim Vinoski | Forbes
Recent announcements about new industrial facilities in two very different towns have bolstered the lauded strength of the manufacturing sector in Michigan.
Detroit – the state’s industrial epicenter, and the worldwide home of the legacy auto industry – won the competition in the U.S. for the site of a new electric commercial vehicle battery plant. German company AKASOL AG (see more about them here), which produces high performance lithium-ion battery systems for a variety of different EV applications, had launched the search for the best location for their first American factory last year. On June 26 they announced that metro Detroit had won out. The new plant, to be located in Hazel Park, is expected to begin production next year, and will create over 200 new jobs over the next five years. The State of Michigan provided support for the plant by awarding AKASOL a $2.24 million Michigan Business Development Grant for the construction of the facility.
AKASOL was founded as a non-profit in 1990 at the Technical University of Darmstadt focused on solar car racing. The company branched out into EV components, and eventually spun off as a for-profit battery systems firm in 2008. They completed an IPO last year, and have a current market capitalization of nearly €239 million.MORE FOR YOU
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The new facility continues the Detroit area’s diversification, in which they continue to capitalize on their enormous base of automotive capital and talent, while branching out into new areas involving transportation and related businesses.
Jeff Mason, the President and CEO of the Michigan Economic Development Corporation (MEDC), was pleased with the opportunity the company is bringing to the state. “AKASOL is a great addition for Michigan,” he said. “We’re really bullish about the EV and mobility markets.”
As far away from Detroit as you can go and still be in Michigan is the small Upper Peninsula (UP) town of Ironwood, right on the Wisconsin border and just 18 miles from Lake Superior. A mining and logging boom town in the early and middle 1900s, Ironwood has endured multiple doses of bad business news. The mines all shut down decades ago, and late last year the Michigan Department of Corrections closed the Ojibway Correctional Facility in nearby Marenisco, with a loss of over 200 jobs. So the grand opening on July 8 of the new Ironwood facility for Waupaca Foundry, Inc., was a welcome reversal of fortunes for this town of 5,000.
Waupaca Foundry, owned by Japan’s Hitachi Metals, Ltd., is a producer of gray and ductile iron components based in Waupaca, Wisconsin. The Pioneer Foundry, its earliest predecessor, dates back to 1871, and Waupaca Foundry was established in 1955. They make iron castings for industrial applications, and they also offer post-production finishing and complex supply chain solutions. But recently they ran into trouble.
“We were faced with workforce availability challenges in the Waupaca area,” said John Wiesbrock, the company’s Executive VP of Sales, Marketing and Supply Chain Management. “We began a search in Wisconsin and our neighboring states for areas with higher unemployment, and we learned of the Ojibway closure.” With the help of the MEDC, Waupaca Foundry held job fairs in Marenisco and had great success identifying potential candidates.” They made the decision to open a new casting cleaning and finishing facility in that part of the UP.
When the company then went looking for available buildings in the area, officials in Ironwood pointed them to suitable facilities in their industrial park. “We found buildings we could renovate and make attractive, to retain the talented workforce,” Wiesbrock said. “And we found the same jobs need.”
Waupaca Foundry was awarded a $1.2 million Michigan Business Development Program performance-based grant from the Michigan Strategic Fund in December of last year, and quickly set to work. Wiesbrock praised the local contractors who renovated the building for the company. “They did a great job for us,” he said. “And they pulled off the job ahead of schedule.” He had praise for other players as well. “Between the State of Michigan, the MEDC, and the local government, we just had great support.”
While the site was being prepared, the company moved forward with hiring workers they needed initially, and didn’t wait around to start training them. “We hired the first group in December 2018,” Wiesbrock said. “We contracted a bus service to bring them to Waupaca to train. They’d come down on Monday and go home on Friday, so already the money they were making came back to the local area. Every week we had a full bus, from December until the July grand opening.” Waupaca Foundry now employs 42 people at the Ironwood facility, with plans to grow that workforce to 61 in the near future.
Wiesbrock sees great potential for the new facility. “It’s really great to do something for the UP,” he said. “I told them at the grand opening, ‘Watch us grow!’ We don’t have anything firm right now, but I definitely foresee the need for additional finishing services there in the future.”
Waupaca Foundry makes up about $2 billion of the total sales of $9 billion in worldwide sales at Hitachi Metals. Their diverse product mix – they have customers in transportation, agriculture, oil and gas, infrastructure and rail – allows them to weather economic storms well. “If one sector is down, others will be up,” Wiesbrock explained.
The MEDC’s Mason thinks the new Michigan workforce will help with that future potential. “Manufacturing is in our DNA,” he said. “It goes to the long manufacturing history of our state, but also to our workers – we know how to make things.”
That focus on the people is a piece Wiesbrock agrees with. “We believe – here at Waupaca, and at Hitachi as well – that our #1 asset is our employees.” And he feels the respect is mutual. “It’s great to be in a community that welcomes manufacturing jobs, and that welcomes Waupaca Foundry.”