BIG PLANS FOR KAUTH
New plant, 350 jobs coming
German auto parts company Kauth plans to build a 300,000-squarefoot manufacturing facility in Windsor starting next year with plans to start production in 2020 and employ 350, the company’s managing director said Thursday. At a celebratory official opening of its North American headquarters on land that’s part of Windsor International Airport, Steffen May said that after 18 months of meetings: “I know Kauth and Windsor will be a Canadian- German success story.”
The company has already hired a couple of staff, as it ramps up a warehouse and distribution operation on a building built three years ago but never occupied — part of the $17-million cargo hub on airport land that also houses the Fed Ex shipment centre and the Institute of Border Logistics and Security.
The warehouse operation will employ 25, May said. A new manufacturing facility, also on leased land, will be built beside it on 10 acres of leased land.
The city is providing a total of $2.1 million in incentives from its Economic Revitalization Community Improvement Plan, in the form of rebates over 10 years representing the difference between the current municipal taxes on the property and the enlarged tax bill once a building is constructed. Kauth’s investment is worth $15 million, according to May. He said that after many meetings, Kauth decided Windsor had the “best package for us.” “Windsor is a very interesting city, it’s nearby to the U.S. and there are skilled workers. This is something very important for our technology, because we need skilled workers and we can find them here.”
The company ’s main business is stamping and forming auto parts, the kind of parts that are crucial to safety, he said, such as the parts that fasten seats, engines and axles. It has a unique technology involving integrated extruded holes that make the parts stronger, according to May. Kauth’s biggest customer in Germany is Mercedes. It runs six plants, employing more than 900 in Germany, with customers that also include BMW, Audi, Chevrolet and Magna. The Windsor plant will become Kauth’s biggest. Kauth is a privately held company, founded by Paul Kauth in Denkingen, Germany, in 1928 and still owned by the Kauth family. May said there were many suitors for the North American headquarters, including the southern states of Alabama and Georgia and five Ontario cities. He said a deciding factor was a visit made to Germany earlier this year by Windsor Mayor Drew Dilkens.
“He was the only (mayor) to do this, and this was something for the Kauth family that impressed us, and was a big point for us,” he said. “We are a family-owned company and the feeling is something that’s very important for us. It’s not always the money, it’s also the feeling.”
He said when he’s in Windsor he feels like he’s at home. Dilkens, who said he was “super excited” about the announcement Thursday and the promise of 350 jobs, said: “It was important for me to go over and show we were serious.”
He said the city’s CIP tax rebate was crucial to landing the plant. “Frankly, with the competition that we had, we know we were competing with Alabama (the location of a Mercedes assembly plant), we know we were competing with other cities in Ontario, we had to put together a package that was attractive. And thank God, we had the tools in our tool chest, the CIP, to make us competitive.” The tip that Kauth was looking for a North American headquarters site came from the Canadian Embassy in Berlin. Then staff at the WindsorEssex Economic Development Corporation spent more than a year developing a relationship with Kauth officials. Corporation CEO Stephen MacKenzie said it was very satisfying to beat out the competition from southern states. During 17 years working in economic development in the Northeastern U.S., it “never ceased to amaze us the free things southern states could put into a deal,” including cash and land, he said. He added some costs were higher compared to the southern states, while some were lower.
“It’s the total package,” he said. “And when everything was factored in here, those cost factors, along with the quality-of-life factors — the fact it’s comfortable, it’s stable here — and we’re close to the U.S., it’s tremendously rewarding.” Kauth North America’s new building is virtually brand new. The firm was able to move in after a few months of preparation, according to Dilkens, who said the company’s presence in the cargo hub fulfils the vision the city had for the airport land. The $17-million cargo hub development was funded mostly by the federal government.
“It just took longer than we hoped (to fill the third building),” he said. “Thank God for the building because that helped us seal the deal as well.”