Ohio's tax credit authority on Monday will hear a request from Ford Motor Co. for tax breaks to support retooling at its Avon Lake plant. Ford plans to convert the plant to build commercial trucks instead of vans by 2014.
Ford will ask Ohio for incentives to retool the automaker's Ohio Assembly Plant in Avon Lake, pictured in this 2009 file photo, on Monday.CLEVELAND, Ohio -- Ford Motor Co. will ask the state for an incentive package Monday to help pay for the company's plans to convert its Avon Lake van plant into a commercial truck plant.
"This is an important step for Avon Lake, Sheffield Lake, Sheffield Village and all of Northeast Ohio," Avon Lake Mayor Karl Zuber said Friday.
The agenda of Monday's meeting of the Ohio Tax Credit Authority lists no details on what kinds of incentives Ford will seek, and a Ohio Department of Development spokeswoman said she couldn't release any details until the request comes before the board.
Ford's plans to convert the Avon Lake plant emerged in October when the automaker agreed to a new four-year contract with the United Auto Workers. That contract calls for Ford to invest at least $128 million in Lorain County.
Ford officials did not return calls Friday, but in October they said any expansion projects at Avon Lake were contingent on getting state incentives.
Zuber said Ford was seeking job-retention credits. Converting Avon Lake from vans to trucks won't add any new jobs to the facility, but it should protect the futures of the 1,900 people who work there.
Zuber and Don Romancak, director of community development for Lorain County, declined to speculate on exactly how much Ford could receive in state tax breaks. But a look at the state's recent support of Chrysler in Toledo could provide a hint.
Last month, Chrysler announced it would invest $500 million to retool its Jeep complex in Toledo, a move that should create 1,000 jobs. The state offered $10 million in job-creation tax credits and another $2 million in grants for job training and machinery.
The proposed Ford expansion will be significantly smaller and it will not create new jobs. Still, the state's job-retention tax credits can be sizeable. The state agreed to $75 million in retention credits over 15 years to American Greetings earlier this year when the company announced plans to move to Westlake from Brooklyn.
Romancak said Lorain County probably won't offer any tax breaks to Ford to fund the expansion, but it will help coordinate the efforts of the Avon Lake, Sheffield Lake and Sheffield Village, all of which provide services to Ford.
"The communities are well versed in cooperating with each other because it was required for them to do that just to get the plant to be there in the first place," Romancak said. "It's an approach that's not uncommon to us over here."
Ford's plans to retool Avon Lake were critical to keeping the plant open because the company plans to phase out the aging Econoline van series built there in favor of the more fuel-efficient Transit van line that it sells in Europe. The automaker plans to make the Transit vans in Kansas City.
Ford hasn't said when it will start making commercial trucks in Ohio, but analysts and union officials said they expect the transition to occur in 2014.
Ford now gets its medium-duty trucks, the kind of vehicles used as dump trucks and cement trucks, from Mexico where it is the junior partner of a joint venture with Navistar. Ford said it plans to drop out of the Blue Diamond joint venture and resume building its own commercial vehicles.
Also on the agenda for Monday's tax credit authority meeting is the Timken Co. in Canton. Company officials did not return calls late Friday about any potential plant expansions there, but Timken has been in talks for months about a potential $225 million expansion of its Faircrest Steel Plant.
The company has said the expansion is contingent on state incentives and a new contract with steelworkers at the plant. Negotiations on a new labor contract have been going on for about two months.
Several other Northeast Ohio projects will also come before the board, including a project in Cleveland from New York insurance company AmTrust Financial Services. In August, an affiliate of AmTrust paid nearly $7.5 million for the 23-story KeyBank Center office building at 800 Superior Ave.