An Unprecedented Partnership
A partnership that was unprecedented in Saginaw’s past has
brought new opportunity for Saginaw’s future with an $88 million
investment in Saginaw Metal Casting Operations (SMCO). In
November 2002, General Motors announced that SMCO had beat
out competitors in Mexico for the new precision sand business
that will produce engine blocks for GM’s next generation of
aluminum V-8 engines. The investment has also saved 191 jobs
at the plant, since GM had previously planned to cut about
200 jobs from the plant. What’s more, additional jobs may
well be created as local suppliers prepare to meet SMCO’s
expanding needs. Saginaw Future president JoAnn Crary noted,
“The last time there was new investment ($170 million for
a lost foam aluminum line), Saginaw gained four new suppliers
and over 250 jobs.”
A Collaborative Effort
Saginaw Future played a key role in facilitating the collaborative
efforts of SMCO, the city of Saginaw and the Michigan Economic
Development Corporation to develop a strong business case
for the project. In addition, plant manager Rick Sutton credits
the efforts of the plant’s 2,400 employees who helped to save
$75 million in plant operation costs over the past three years,
even while starting up production of the lost foam aluminum
Vortec 4200 inline-6 engine block and cylinder head for the
carmaker’s popular line of SUVs.
A Winning Combination
As Rick Sutton explained, “It’s important to recognize the
strong teamwork that helped make the precision sand project
a reality for SMCO. Saginaw Future Inc., the Saginaw City
Council and the Michigan Economic Development Corporation
worked with the SMCO team to develop a very compelling business
case to address our global competitive challenges,” he said.
“Our outstanding workforce at SMCO helped us achieve our goals
in cost and quality. Through the spirit of cooperation with
our labor leaders, we have been able to put competitive work
agreements in place.” Sutton also added, “When you put all
of these factors together, you have a winning combination,
and that is what made it possible for us to be awarded the
precision sand project.” The project’s initial stages of research,
development and equipment installation began in late 2002,
with engine production scheduled to begin in 2006.
Unanimous Vote Speakes Volumes for Saginaw
The successful outcome of the Saginaw Metal Casting Operations
project was due in large part to the unanimous vote from the
Saginaw City Council to approve a 100 percent personal property
tax abatement on the plant’s new precision sand aluminum
line. This decision will save SMCO about $16 million in property
taxes over the next 20 years, but the significance of the
unanimous votes is more than financial.
According to Ed Donovan, Director of Municipal Government
Relations for General Motors, “This decision proved to
us at GM that the community of Saginaw is willing work with
us as we face an increasingly competitive environment so that
we can continue to grow our business in Saginaw. It has been
refreshing to work with a community that is receptive and
positive when it comes to business investment. Like many other
manufacturing businesses, General Motors has found that this
is not always the case. Saginaw has definitely shown itself
to be business-friendly.”
Saginaw’s Mayor Wilmer Jones Ham
added, “As elected leaders for the city of Saginaw, we saw this project
as a key opportunity to save and bring new jobs in our community.
Because of the teamwork that took place between our own city council,
business and labor leaders from SMCO and General Motors, along with
Saginaw Future and the Michigan Economic Development Corporation, we
were able to send a positive message to both GM and to our community.”
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