Kokomo — Delphi officials are moving ahead on a new electric vehicle component manufacturing facility in Kokomo, in part thanks to a $50 million local tax abatement passed Monday.
Delphi officials at Monday’s Kokomo Common Council meeting said the new facility on Morgan Street will operate like a new business startup, rather than as a new division of the worldwide components manufacturer.
“This is a new product and a new technology. It’s like starting up a new company,” said Kevin Clancy, general director of human resources.
In the short term, that will mean keeping production costs low.
Engineers at the electric vehicle component operation will “be a mix, like we’ve always done,” Clancy said, referring to the blend of in-house and outsourced engineering staff at the Delphi Electronics and Safety headquarters.
The “techs,” those who will build the newly designed components, will be hired through Trialon, a human resources outsourcing firm. Techs will make between $10 and $12 an hour, with benefits through Trialon, Clancy said.
Work is already under way at the former WIS Sheet Metal building, 1501 E. 200 South (Morgan Street), according to Lisa Hardwick, plant manager.
“We’re in debugging mode right now. We’re debugging all of the machinery as it’s brought in, and we have vendors in retrofitting the building,” she said.
Operations should start in the third quarter, she said, with full production volume arriving in 2013 or 2014.
According to a statement of benefits submitted to the city of Kokomo, Delphi plans to add 118 new jobs and retain 72 jobs through the new operation, which will also utilize space at the current Delphi location on Lincoln Road.
In return, the city council agreed to a five-year personal property tax abatement on up to $50 million in new machinery needed for the operation.
Last year, Delphi received an $89.3 million U.S. Department of Energy grant to produce electric-hybrid technology in Kokomo.
Delphi is matching the grant — up to $178.6 million — representing a three-year investment to advance the development of low-cost manufacturing of electric-drive vehicles in the U.S.
Last year, when President Barack Obama announced the grant, he specifically said the money would be spent on operations in Kokomo. City officials, however, said Monday the location of the project was in doubt for some time.
Monday, Clancy acknowledged previous concerns the facility might not locate in Kokomo.
“When we found out about being selected for the award last August, Delphi expected to own the plant on Lincoln Road,” Clancy said. “Under the Delphi bankruptcy agreement, GM acquired that site, so therefore Delphi needed to find another manufacturing site.”
Clancy credited state and city officials for the final location of the facility.
“The quick response by the Indiana Economic Development Corp. and the city of Kokomo was a critical reason why Kokomo was chosen for the site,” he said.