American Broach promises high paying jobs in Ypsilanti as City Council approves $96,000 tax abatement
The Ypsilanti City Council approved a $96,000 tax abatement to assist a local gear manufacturer with an ongoing expansion.
American Broach is in the midst of investing $1.4 million in a 42,800-square-foot facility at 535 S. Mansfield St.
The company originally intended to build a new facility, but found it would be cheaper to purchase a neighboring building at 575 S. Mansfield Street in the Ypsilanti West Business Park.
“We’re pretty happy to be in Ypsilanti,” American Broach President Ken Nemec told the Ypsilanti City Council on Tuesday.
Nemec, who lives in Ypsilanti Township, says the expansion will help the company add 20 new jobs by the end of 2015, though he noted his personal goal is to add 50 jobs over the next five years.
American Braoch is promising to bring high paying jobs as it continues to grow.
Tom Perkins | For AnnArbor.com
According to its annual report, American Broach saw $8.4 million in revenues last year. It builds intricate cutting machines that produce gears, with the auto and defense industry making up the majority of its revenue base. The 2012 revenue is up $3 million over the previous year.
Nemec highlighted that the jobs American Broach will add pay well and the company provides excellent working conditions. Employees doing factory work average around $45,000 annually and are provided full benefits and vacation days.
“It’s not a Walmart job,” Nemec said. “These are the kind of jobs we want in Ypsilanti.”
“Our shop is representative of what a new factory is,” he added.
City Planner Teresa Gillotti said the positions meet the city's living wage ordinance and two-thirds of the jobs expected to be created between 2011 and 2015 will qualify as high-tech jobs per Michigan Economic Development Corporation guidelines.
When American Broach moved to Ypsilanti in 2008, the company had 21 employees and it now has 51, Nemec said. According to its annual report American Broach, added 13 new full-time jobs and two part-time jobs in 2011 and 2012.
Nemec said the average age of company employees was over 60 when he was hired in 2006 and that many of the employees are now under 30. Many of the older employees have retired.
But Nemec said finding skilled workers is one of the company’s challenges. The skills needed to perform jobs at American Broach disappeared from the workforce when manufacturing jobs began going oversees, Nemec said. There are very few skilled workers who can perform the work between 30- and 55-years-old in the area, he said, and added that it takes five to 10 years for the company to train new tool-makers.
“There are no skilled people available. What we do is pretty specific,” Nemec said adding that the company has also had a difficult time finding young people willing to do the work.
“You would be surprised. A lot of these kids really don’t want to do it.”
American Braoch has a history of utilizing incentives at the state and local level. It was previously approved for exemptions in 2008 and 2011 worth $450,000 and $430,000, respectively.
In 2011, the company also received a state tax credit of $527,000 over 7 years.
Among the equipment listed in the personal property list for the new building is standard office equipment like lighting, an HVAC unit and duct materials.
The company is also planning to purchase two jib cranes for $60,000; a grinder at $600,000; a lathe for $30,000 and a sharpener for $634,000.
American Broach moved in 2008 from its decades-long home on Jackson Road to a 22,580-square-foot facility on South Mansfield.
Nemec said American Broach held several million dollars in debt and was losing $500,000 annually when he was hired in 2006. He said he recommended to the company’s board of directors that they file for bankruptcy and shut down after he spent a month in the position.
The board of directors objected and ordered Nemec to find a way to make the company profitable. He said he consolidated three plants under one roof in Ypsilanti as part of that process.
“We got down to where we could afford to live, and now, over the last six years, we really built it back up,” he said. “We’ve got a lot of customers who are pounding on our doors.”
City Manager Ralph Lange said he toured American Broach’s factory and was impressed by its operation and clean conditions.
“It’s really an extraordinary place,” he said. “This isn’t a typical factory; this is the new era of manufacturing.”
Comments
Steve Pierce
Fri, Jun 21, 2013 : 3:24 p.m.
Unless those high-paying employees live in the City of Ypsilanti, this doesn't help. But hey, a tax break to support the gun industry as well as a Chinese company, never thought I would see that from City Council.
nekm1
Thu, Jun 20, 2013 : 12:50 p.m.
Paula, the discussion begins with this notion that you can't get a good job without a college degree. Skilled trades are where you will find openings to high paying and fulfilling work. O ver the past few decades, our schools and political leaders have "poo pooed" skilled trades for Bachelor's degrees, and have made substantial jobs (using one's hands) passe. Ask the millions of college grads that live with their parents, while unable to find jobs fitting a "History of European Art" degree.
deletedcomment
Thu, Jun 20, 2013 : 5:04 a.m.
How does one apply? Their website does not have a "Career" section.
Think!
Thu, Jun 20, 2013 : 2:05 a.m.
Will only Ypsilanti residents be hired for these jobs that are nearly impossible to fill? If not, how exactly is this helping the community? With the republican legislature and governor phasing out the personal property tax on businesses, machinery purchased by Broach won't even be helping Ypsilanti's bottom line. This makes no fiscal sense.
Basic Bob
Thu, Jun 20, 2013 : 5:23 a.m.
Jobs always make fiscal sense. Someone might decide to live close to work, and for what they pay, Ypsi is a nice place to live that fits the budget.
trespass
Thu, Jun 20, 2013 : 1:11 a.m.
American Machine & Broach is a subsidiary of a Chinese company. There manufacturing facilities are primarily in China. The local R&D center keeps them close to American centers of innovation. Should we be subsidizing a Chinese company?
trespass
Wed, Jun 19, 2013 : 8:57 p.m.
American Broach sounds like an American Company but it has a Chinese address Company: American Broach & Machine China Address: No. 22 Jiangtan Road, Baoji, ShaanXi, Shaanxi 721009,China 60% of the company was bought by Quinchuan Machine Tool Group, a Chinese company, and many of the machine tools and technology was shipped back to China. Most of the companies manufacturing is in China and the Ypsilanti R&D facility give them access to more American technology, which will benefit its Chinese parent company. The technology has military uses in the rifleing of the barrels of guns and artillery pieces (rifleing is the process of cutting spiral grooves in the barrel to cause the projectile to spin and increase its accuracy). Thus both MEDC and Ypsilanti are subsidizing the transfer of manufacturing and military technology to China. Read more at www.china-threat.com
JMA2Y
Wed, Jun 19, 2013 : 7:48 p.m.
Since when do they pay around $21 an hour? Ten or so years ago they were barely paying some $10. I had a friend who worked there making under $10 as an experienced tool and die. And without full benefits.
drewk
Wed, Jun 19, 2013 : 9:25 p.m.
Your friend was obviously lying to you or you are mistaken. Any "good" tool & die maker makes well over twenty bucks an hour.
Judy
Wed, Jun 19, 2013 : 6:15 p.m.
Make my words after they are given the tax abatement Ypsilanti will see 20 new jobs let alone 50. They will have an excuse of some kind while laughing all the way to the bank. Manufacturing business is doing it everywhere.
TK2013
Wed, Jun 19, 2013 : 7:56 p.m.
I'm with you, Judy, except that I believe your prediction of 20 new jobs is way too optimistic. This isn't about job creation…it's about corporate welfare entitlements.
Tesla
Wed, Jun 19, 2013 : 4:27 p.m.
Do they still own the building on Jackson? It's been vacant since they moved out and is for sale.
Eep
Wed, Jun 19, 2013 : 5:33 p.m.
Are you sure the building is vacant? The last time I drove by the sign in front had been changed to RealizeWebsites.com, which appears to be a going business operating out of that building. Unless I'm thinking about a different building?
djacks24
Wed, Jun 19, 2013 : 4:13 p.m.
"There are very few skilled workers who can perform the work between 30- and 55-years-old in the area, he said, and added that it takes five to 10 years for the company to train new tool-makers. " This whole thing sounds like a good deal if it pans out. The people he is looking for he expects to already be trained (as does any other employer looking for skilled labor these days). It's likely he is leaning on this excuse when he gets the tax abatement and he is unable to find workers ready to hit the ground running. These type of skills were learned on the job mostly, so why is he hesitant to train workers. I just would've thrown a clause into the agreement that specified he be willing to train workers. Too bad our local community college can only serve as a funnel into a four year degree program.
talker
Wed, Jun 19, 2013 : 9:14 p.m.
If they are looking for skilled workers between 30 and 55, does it mean they don't want 28 year old, 58 year old or 65 year old skilled workers?
Paula Gardner
Wed, Jun 19, 2013 : 2:22 p.m.
The difficulty this company has finding skilled workers is interesting. I'd heard this from another source recently, too. We're looking into this for a subsequent story.
talker
Wed, Jun 19, 2013 : 9:12 p.m.
I'd like to hear from some of the retired workers to see if they were interested in continuing to work, but were told they couldn't stay beyond a certain age? Maybe they all retired voluntarily, but I'd like the retirement claim confirmed by those who retired whether it was mandatory.
TK2013
Wed, Jun 19, 2013 : 7:50 p.m.
The phrase 'difficulty finding skilled workers' is laughable corporate code for 'we have no intention of fulfilling our promises of job creation now that the city has committed to our welfare entitlement.'
Basic Bob
Wed, Jun 19, 2013 : 3:56 p.m.
it's true. there is a chronic shortage of skilled tradesmen, technicians, and engineers in southeast michigan. many former workers have retired and there have been few new hires in the last decade or two. it's honest work, pay is decent, and working conditions are safer than ever. and you don't need a masters degree to qualify.
TK2013
Wed, Jun 19, 2013 : 1:43 p.m.
Corporate welfare is alive and well in the City of Ypsilanti!
Reverend Bubba X
Wed, Jun 19, 2013 : 9:01 p.m.
Good to see American Broach has turned things around and is growing. But , Basic Bob, corporate welfare is welfare for the relatively wealthy, nothing more. It's a false dichotomy to assume that a company in a similar situation won't create more jobs without the corporate welfare, aka special favors from government.
TK2013
Wed, Jun 19, 2013 : 7:44 p.m.
The theory that tax abatements, incentives, etc., for corporations will translate into job creation is a complete fallacy unsupported by empirical data. While this fallacy continues to be promoted as fact by certain fair and balanced media outlets, the truth of the matter is that it creates one thing only…a fatter bottom line for the 1%.
Basic Bob
Wed, Jun 19, 2013 : 3:57 p.m.
it beats regular welfare the moment it creates a single job.
Ignatz
Wed, Jun 19, 2013 : 1:42 p.m.
I they can come anywhere near fulfilling that promise, this would seem to be a good deal. I hope they can find enough qualified workers from the community.