As published in Toledo Business Journal - November 1, 2015
Borgers USA's Norwalk manufacturing plant
In mid-October, Borgers USA Corporation (Borgers) celebrated the opening of its new $60 million manufacturing plant in Norwalk that sits on a 27-acre site in Finelands Industrial Park. This large construction project took close to a year to complete after the German-based company broke ground on the facility in August 2014. When the project was announced, plans were disclosed that the company would be hiring approximately 230 employees who will help the company meet the growing demand for its products in this country. In early June, the plant began initial manufacturing trials and is working to ramp up production. There are currently 47 employees with another 40 employees that will be added by the end of the year as the plant continues to step up production.
“Borgers’ decision to choose Ohio for its new manufacturing facility not only brings a high number of good jobs to Norwalk, it demonstrates the strength of auto manufacturing in the state,” stated John Minor, president and chief investment officer, JobsOhio when the project was first announced. “This is a fifth generation company with a worldwide reputation for high-quality manufacturing as well as being an involved partner in the communities where it invests. We are delighted that Borgers now has a presence in Ohio.”
Borgers USA Corporation is the US subsidiary of Borgers AG, an automotive supplier that manufactures acoustically efficient interior and exterior components. Products include trim, carpeting, and insulation for both passenger cars and commercial vehicles. The company will celebrate its 150th anniversary in 2016. It has been manufacturing products for the automobile industry for 130 years.
The Norwalk facility will supply the company’s Midwest customers. According to Werner Borgers, president and CEO, the company was approached by General Motors (GM) to become a supplier at a meeting in Detroit. Borgers had a very short period of time to find a facility and set up operations to support its new US customer. GM’s Lordstown plant, close to Youngstown, is one of the facilities that it will supply.
After Borgers was selected to supply components to General Motors, the company wanted to find a location that was in proximity to GM plants in the Midwest.
Initially, Borgers began its site selection search seeking an existing building that would enable the company to begin operations sooner. Borgers considered 60 locations with close to 120 sites in four states. These states included Michigan, Indiana, and Kentucky along with Ohio. The list was reduced to 20 and then further reduced to 10 sites in January 2014. According to Andreas Schalk, Borgers USA president, Norwalk was not included in the initial 120 sites that were reviewed. However, a number of additional criteria involving workforce quality were added to the site selection process and at this point a greenfield site in Norfolk was added. Following additional reviews, the list was taken down to 4 locations and then to two finalists. One of the finalists was in Indiana and the other in Ohio. Borgers’ management credits the extra efforts of local officials in Norwalk as an important factor in their decision to select the greenfield site in this location.
Consultants to the project advised the company that it was not possible to construct a new facility in the timeframe that was needed. However, Borgers retained a general contractor, Janotta & Herner in Monroeville, Ohio, which completed the construction project in the tight timeframe needed. The company shipped over 100 containers of equipment from Germany that had to be installed during the facility’s construction.
Borgers has operations in 24 locations in Europe, China, and the US. It has 6,000 employees worldwide. The Norwalk plant will be the company’s second location in this country, along with a manufacturing facility in Vance, Alabama that supplies the Mercedes-Benz plant in Tuscaloosa.
A number of major factors impacted the company’s decision to locate in northwest Ohio. Norwalk’s location and its logistics benefits for both customers and suppliers was a critical factor in Borgers’ decision. In addition, the skill and work ethic of the labor force in Norwalk and northwest Ohio played an important factor in the selection of the site for this new manufacturing facility.
“Norwalk is a great location regarding logistics as it relates to our Midwest customers and the labor force is exceptional and highly motivated. In addition to that, we feel that there is a great emotional fit between the people in Norwalk and the values and characteristics of our family business. We are very excited about becoming part of the Norwalk community,” stated Werner Borgers.
In order to encourage the company to select an Ohio site, the Ohio Tax Credit Authority approved a 60%, 9-year tax credit to Borgers for the creation of $8,309,808 in new annual payroll as a result of the company’s new location project in the City of Norwalk, Huron County. As part of the tax credit agreement, the Authority requires the company to maintain operations at the project location for at least twelve years.
Borgers expects that the 230 full-time equivalent employees will generate the over $8 million in additional annual payroll by the end of 2019 at the Norwalk facility. In addition, the company will claim the tax credit on income tax revenue generated in excess of the company’s baseline income tax revenue at the Norwalk plant.