Benteler Automotive received approval for a tax phase-in from the City Council connected to plans to invest up to $26 million into its Goshen facility. Joseph Weiser | The Goshen News
Benteler Automotive received approval for a tax phase-in from the City Council connected to plans to invest up to $26 million into its Goshen facility. Joseph Weiser | The Goshen News

GOSHEN — Plans by international auto parts maker Benteler Automotive to invest up to $26 million into its Goshen facility advanced Tuesday during a meeting of the Goshen City Council.

At the meeting, council members narrowly approved a resolution confirming the requested designation of an economic revitalization area for the Goshen plant, located at 910 Eisenhower Drive South. The moved followed a similar, resolution approved by the council Jan. 7.

According to Mark Brinson, community development director for the city, Benteler plans on adding new equipment to the plant this year, upgrades which the company says are needed due to the recent securing of a number of big, long-term parts contracts with major companies, including Ford and Honda.

However, as part of that $26 million investment, Brinson said Benteler is seeking assistance from the city in the form of a five-year tax phase-in, which is a partial or temporary exemption of a company from having to pay property taxes with the express purpose of stimulating economic development.

According to Brinson, Tuesday’s resolution is a necessary step in Benteler’s securing of that tax phase-in, as such revitalization areas must be established by the council first before it can move forward with considering a tax phase-in.

THE PROJECT

“The proposed project will result in the addition of a new hot line into the Goshen facility. This production technology is used to produce high strength automotive components that are more lightweight. This results in vehicle components that are safer and also help reduce emissions,” Brinson said of the plan, noting that the Goshen facility is the only hot line that Benteler operates in the United States. “The hot line manufacturing process is highly automated and requires a significant capital investment.”

In addition, Brinson noted that the proposed project will also require the installation of new press equipment, lasers, weld cells and other related equipment, for a total estimated investment of $26,064,506.

According to the petition, that planned investment will ultimately allow the company to increase its annual sales from about $65 million today to around $118 million by 2022.

And while the company’s current investment plan does not include the hiring of any additional workers at the site, the plan does include investing about $200,000 to provide additional training for many of the approximately 270 employees at the plant.

Brinson also noted that the median wage for the 160 production workers at Benteler is currently $21.15 per hour, which is significantly higher than Elkhart County’s median wage of $17.33 per hour.

In outlining the reasoning behind his support for the requested tax phase-in, Brinson offered the following:

• The project serves the automotive sector and therefore brings diversification to Goshen’s manufacturing base, which is heavily dependent on the recreational vehicle industry. The RV industry has a reputation for more pronounced swings in production compared to the automotive industry.

• The jobs that are retained pay wages that are significantly higher than the current median wage in Elkhart County.

• The project will result in a significant increase to the property tax base.

OPINIONS MIXED

Among those to speak in favor of the request Tuesday was Goshen resident Glenn Null, who said he felt it would be in the city’s best interest to throw its support behind a business that is not RV-related.

“I’m in favor of it, even though it might cost me some tax dollars,” Null said. “It’s time that we realize that the 70, 80, 90 years or so of RV that had built this community, and this county, isn’t going to be here forever. Sooner or later, you get to the top of the mountain, and then it’s downhill from there. I think this is a good opportunity for us to invest in something other than RV. And that’s what it is, an investment for the community.”

Also speaking in favor of the request was Nick Kieffer, president of the Goshen Chamber of Commerce.

“This is a good project for Goshen, it’s a good project for the employees that are at Benteler in Goshen, and I think it’s a good thing for our community,” Kieffer told the council. “I just want to appreciate Benteler and their investment in our community, and their continued investment, and I urge you to support this resolution.”

Council member Doug Nisley, R-District 2, agreed.

“I would be more than happy to look at any tax phase-in if that same company pays their employees like this company pays theirs,” Nisley said of Benteler, noting how impressed he was with the company following a recent tour of its Goshen facility. “They’re very well paid, and they do a very good job.”

For his part, former Goshen City Council member Daniel Grimes said he doesn’t feel the Benteler request fits the intended purpose of what tax phase-ins were originally created to do, and urged the council to oppose the request.

“I think it does set a dangerous precedent,” he said. “Tax phase-ins were supposed to be done for economic development, for areas that were hard-pressed to develop, for companies that were expanding jobs at certain rates and things of that nature, and I think this just sets the bar very low.”

Grimes also said he is philosophically opposed to granting tax breaks for the wealthy.

“When we look at the economics in this country as a whole, the disparity between the haves and the have nots is only growing, the amount of tax breaks that corporations receive is only expanding. This is a multinational company,” he said of Benteler. “I would ask council members, before you give this tax break, what kind of salaries are the top executives at this particular company making? Do they really need tax breaks from the citizens of Goshen in order for this plan to go forward?”

Council member Julia King, D-At-Large, offered a similar sentiment, noting that while she supports Benteler’s continued investment in the Goshen community and praised the quality of its products, she feels a company as large as Benteler should be able to proceed with it’s planned upgrade without the need for tax benefits from Goshen.

“It’s a multi-billion dollar company,” she said. “I wish you all the best, genuinely.”

Council member Gilberto Perez Jr., D-District 5, also expressed concern with the request, particularly when it comes to the growing trend of increased automation and robots in manufacturing at the expense of workers.

“I’ve actually been to three manufacturing plants here recently, including Benteler, and part of the common denominator that I see in all three of these plants is the less people that are in those spaces, and more robotics, and more high-end technology,” he said. “There is a set of people within these institutions that are obtaining adequate training. I think my concern is the people that are coming behind them, that there will be less jobs in this community. We are headed into a situation where there will be less opportunities for residents in this community.

“As I have reflected on that, it behooves the council and the mayor to think about how do we collectively think about automation in our county, and who sits at the table to think about that more closely, and have a broader conversation on the potential impact of automation,” he added. “I think we need to start today.”

Acknowledging that the use of robotics does lessen the amount of available jobs in a community, Goshen Mayor Jeremy Stutsman, a supporter of the Benteler request, noted that he feels the city needs more advanced manufacturing in order to diversify, and feels the Benteler project is a step in the right direction.

“This is job loss. Robotics does lessen jobs,” he said. “But last year, early on, we were looking at 9,500 open jobs that couldn’t be filled in our area. Right now we are very fortunate in Elkhart County to have the jobs we need, and we’re trying to figure out how to attract people and where to house them. This is another piece that helps pick away at that issue. I don’t want to reduce jobs so much that people in our area can’t find a job, but I think there’s a healthy balance.”

In the end, a majority of the council’s members agreed, and a motion to establish Benteler’s economic revitalization area was approved in a vote of 4-3 in favor of passage.

Voting for the request were council members Nisley, Jim McKee, R-District 1, Matt Schrock, R-District 3, and Brett Weddell, R-At-Large.

Voting against passage were council members King, Perez Jr. and Megan Eichorn, D-District 4.

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