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Jeep plant expansion moves forward with tax credit

by David Zatz on

According to the Toledo Blade, Ohio will provide tax credits for Chrysler’s third-of-a-billion-dollar expansion of its Toledo North plant. Chrysler did not, however, say exactly when it would make a final decision on the expansion.

The tax credit provides for 75% of the additional taxes Chrysler would pay over 15 years, around $10 million. In return, Chrysler would restore around 1,100 jobs with a second shift at the plant, which currently makes the Jeep Liberty. The upgrades would cost $8 million for a larger physical area, and $357 million in equipment. Sources say that the money would convert the plant for production of any compact or midsized car or crossover based on the CUSW platform or D-sized equivalent platform. Some have speculated that it could include the facility to build the completely unrelated Jeep Wrangler at Toledo North as well as its current home in Toledo South.

The new jobs would pay $14.65 per hour (around $29,000 per year) while 55 management jobs would be created at over $90,000 per year.

Ohio’s authority also approved a separate tax credit for the next ten years to preserve 640 jobs at Toledo Machining, for 50% of the state taxes paid by the plant, to offset investments of $72 million on new steering columns (due in October) and torque converters (due in 2013). There will also be $850,000 in grants for job training and new tooling.

Local incentives reported by the Blade are 50% property tax cuts for 15 years for the plant, by both of the towns it is located in. That is worth nearly $100,000 per year. The city of Toledo is also expected to cut taxes for the plant.

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