Defense contractor scales back hiring plans
Sapa Transmission: delays in defense related contracts caused revisions
A Spanish defense industry manufacturing company has been forced to dramatically reduce the scope of its Shelby Township facility hiring plans and production levels.
Sapa Transmission now hopes to hire about 25% of a projected 223 jobs the company said it would create when the Michigan Strategic Fund awarded it a $2.7 million Michigan Business Development Program grant in 2018.
According to an MSF board briefing memo, “delays in defense related contracts has forced the company to scale back production levels and revise hiring plans.”
The MSF board on Tuesday approved an amendment to the plan that calls for the grant to be reduced to $600,000 as Sapa now says it would hire only 50 employees.
Sapa Transmission, a division of Madrid-based Sapa Placencia SL, develops combat vehicle transmissions and other parts for U.S. Army armored vehicles. The company previously said it was investing $40 million into plans to assemble and test its transmissions for tracked and wheeled vehicles in a 48,000-square-foot Shelby Township facility. Production previously took place in Spain.
Of the 50 jobs that were promised, five were created by the April 30, 2020, deadline, and the state disbursed $60,000 of the 2018 grant money.
Sapa was supposed to add another 45 positions by April 30, 2023, but the memo stated it was in default of milestones established by Michigan Business Development Program until the MSF board modified the terms of the agreement. The company is now expected to create those by an Oct. 30 deadline.
Two other milestones were eliminated and the grant term term was revised from Nov. 30, 2025 to April 30, 2025.
If the MSF board declined to the changes, the grant would be terminated.
“The company has made significant investment in the project located in Shelby Township,” MSF officials said in their memo.
The MSF said the company “fully expects to be able to fulfill the grant requirements.”
Sapa said in the February 2020 release that it picked Shelby Township “for the region’s versatile workforce and for its proximity to the U.S. Army’s Ground Vehicle Systems Center and Tank Automotive Command and major customers such as BAE Systems and General Dynamics.”
Vicky Rowinski, director of the Macomb County Department of Planning and Economic Development, once called landing Sapa “our greatest success story.”
According to its website, the company is at 51901 Shelby Parkway, in the Cherry Creek Corporate Park. A call to a company vice president was not immediately returned Tuesday.