Print Edition - 2017-11-22 | MONEY
Indian automaker’s plant is latest sign of Detroit comeback
- market shift
Nov 22, 2017-It has been years since Detroit, birthplace of the American auto industry, was a steady producer of the manufacturing jobs that defined it as the Motor City. But its comeback is entering a new phase.
The latest milestone came Monday, with the announcement of the area’s first new vehicle assembly plant in 25 years.
And the automaker making it happen is from, of all places, India.
The company, the Mumbai-based Mahindra Group, said it would begin producing off-road recreational and work vehicles at the plant, in Auburn Hills, early next year.
And it indicated that this might be just a first step in its ambitions for the American market.
“None of us really know where this journey will take us,” said Rick Haas, chief executive of Mahindra’s North American auto group. “But we are here to expand Mahindra’s auto business in the US”
Moreover, the company’s chairman, Anand G. Mahindra, is taking a cue from another automotive entrepreneur, Elon Musk. Citing the success of Mr. Musk’s electric-car start-up, Tesla, he said the traditional barriers to automotive success had been obliterated.
“How many people told Elon Musk, ‘You don’t have any hope of getting into the car business’?” he said.
Mahindra is a major producer of cars and trucks in India and South Korea, but until now it was mainly known in the United States as the world’s leading maker of tractors. Mr. Mahindra said Detroit was a focal point for growth for the company’s American businesses, which also include manufacturing electric bikes and scooters.
“We have a responsibility to contribute to the resurgence of Detroit,” Mr. Mahindra said at the plant’s opening ceremony. “That means jobs, and that means investment.”
While the planned production volume pales in comparison with the output of large, mainstream auto plants, the factory underscores that the Detroit area is again attracting automotive investment.
The region is still a prime source of engineering talent and manufacturing know-how, as well as a technology incubator for electric cars and self-driving systems. Mahindra already has a design and engineering center in Troy, half an hour north of Detroit, that turns out prototypes of future vehicles.
Other foreign companies have also made big investments in the Detroit area and throughout the upper Midwest. Chinese firms have bought a former General Motors steering-gear division in Saginaw, Michigan, and an automotive glass plant in Moraine, Ohio.
One of the largest auto suppliers in Detroit is the Indian firm Sakthi Automotive, which is expanding its operations into a long-shuttered high school on the city’s hardscrabble southwest side.
Detroit’s mayor, Mike Duggan, has made rebuilding the city’s depressed industrial base a priority, and last year lured the auto-parts supplier Flex-N-Gate—owned by a Pakistani native, Shahid Khan—to construct a $95 million factory near downtown.
“It’s the kind of development that Detroit has not been able to compete for in recent
years,” Mr. Duggan said at the plant’s groundbreaking last year. “But we are starting to compete now.”
Mahindra’s footprint in the Detroit area is small so far, with $230 million invested in the plant, the technical center and two related operations that employ about 270 people combined.
The Auburn Hills site where the company is building its factory, in Detroit’s northern suburbs, had been empty for years after housing an engineering firm.
The company expects to build about 5,000 off-road vehicles in the plant’s first year, then add capacity to more than double the volume.
—©2017 THE NEW YORK TIMES
Published: 22-11-2017 08:23