GREENFIELD — Plans for expansion at one of Hancock County’s largest manufacturers are moving forward thanks to an incentive package from local officials that will strengthen the company’s ties to Greenfield.
Greenfield City Council on Wednesday approved a 10-year tax abatement on $15 million in personal property investment for Indiana Automotive Fasteners.
In exchange for a tax break of nearly $900,000 over 10 years, the auto parts manufacturer will invest in new equipment and add 25 jobs over the next three years, according to company spokespersons.
“We have enjoyed expanding for the past 15 years,” said Chikage Castle, IAF accounting manager. “This time we are going to add $15 million in machinery and equipment.”
The expansion is just another in IAF’s relatively short history. The company established its headquarters here in 1996. When it opened in 1997, IAF employed just 50 people. Through a series of planned additions, the company has grown to employ more than 375 workers today.
Chris Crafton, the plant’s general manager, was just the sixth employee hired. He said when the plant started it was shipping 2,000 containers a day. Now it ships more than 13,000.
“I never thought we’d make that many,” he said.
Company officials are quick to recognize the city’s role in its success. IAF has had a long-standing relationship with the city council; this abatement is its fifth.
“I was on the (city) council when they came here,” said Mayor Dick Pasco. “I’m very proud of that.”
IAF’s original abatement request came in November 1995 and called for $9 million to $11 million in real estate improvements and $12 million to $14 million in new manufacturing equipment. The approval came with the promise of 200 new jobs.
A second abatement request was approved in 2001, calling for the hiring of 15 to 25 additional employees with the investment of about $1 million in real estate and $9 million to $13 million in personal property.
A year later, IAF expanded again, adding 106,000 square feet to its Greenfield facility. A third abatement was granted on that investment of about $3 million in real estate improvements, tied to the addition of 50 more employees.
Each was a standard, 10-year tax abatement and has since expired.
A fourth abatement on additional real and personal property was approved in 2004 and is still active. A 10-year abatement was granted on real estate improvements of $7 million to $9 million and personal property, in the form of machinery, estimated at $10 million to $15 million.
Heisaburo Hidaka, president of IAF, addressed the council to express his thanks. Hidaka speaks Japanese, but his words of gratitude for the city’s assistance were translated by Castle.
“Thank you for the opportunity to grow our business,” he said.
Hidaka, who has been with the company since it started, said he has watched it grow from 50 employees to 375.
That number will grow to 400 once the additional employees promised in this expansion are hired.
The supplier of automotive nuts, bolts and screws said it needs the additional manufacturing positions to keep up with growing demand from customers and to support localization efforts for the production of some products.
Crafton said the company will increase production from 13,500 containers – about 7.5 million fasteners – each day to 15,000 over the next two to three years.
Part of that growth will be increased demand from customers, like Toyota and Ford, but some will also come from added production lines.
The company is going to begin making some parts here that it was previously purchasing from its parent company in Japan. Currently, about 20 percent of IAF’s finished products come from Japan.
Because of the strengthening yen, purchasing those products is no longer cost effective, Castle said. She said IAF would like to reduce the number of finished products purchased from Japan to 10 percent or lower in the coming years.
Production of several types of nuts will now be added to local operations, as well as some additional heat treating and coating capabilities.
The hiring and equipment purchases will take place over the next three years. Five positions are slated to be added yet this year, with 10 additional hires for each of the next two. All 25 positions are in manufacturing and start with a base pay of $12.92, increasing to $14.05 after six months. The bulk of the investment in equipment will take place in the next year.
After hearing IAF’s plans, the council had no problem approving the abatement.
“Thank you for deciding to locate here in Greenfield,” said Councilman Jason Horning. “We appreciate seeing you help the community.”