AM General asking for abatement, other incentives for $70 million investment, 329 new jobs

SOUTH BEND ― St. Joseph County Council will begin considering a proposal on Tuesday that would provide abatement from real and personal property taxes for a planned expansion at AM General to accommodate production of a truck for the military.

The company was awarded a contract that could be worth up to $8.6 billion to manufacture the military’s Joint Light Tactical Vehicle, potentially over the next 10 years, but it’s under a tight deadline as the contract calls for production to begin next summer.

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Though exact details of the proposal were still being ironed out, a resolution calls for the plant at 13200 McKinley Ave. just outside of Mishawaka to be declared an economic revitalization area so that it’s eligible for abatement from real and personal property taxes for the next five years.

County economic development officials were still determining the value of the abatement, which would only apply to a proposed plant expansion and the purchase of new equipment needed to build the military’s Joint Light Tactical Vehicle.

In its supporting documents, AM General estimated that it needs to spend about $8.8 million to add about 74,000 square feet to Plant 2 and $59.5 million on tooling and equipment. In addition, the company said the project would enable it to retain its current workforce of 371 and add approximately 329 related jobs that would pay an average wage of $26.97 an hour.

In 2015, Oshkosh unseated AM General’s offering ― the Blast Resistant Vehicle Off Road or BRV-O ― in a competititon to produce the next-generation military vehicle to take the place of the Humvee, which AM General had been building for decades.

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Since losing that contract, the company has continued operating by producing Humvees for foreign allies and by modernizing older vehicles. So production of the new military truck ensures the viability of the South Bend-based companies for the next 10 years.

The company currently employs about 500 in the region, but that's about half the number it had even 10 years ago.

Beyond abatement, AM General is also working with the state for incentives. Those usually involve tax credits in exchange for job creation.

“It’s a great project for a great local employer,” said Bill Schalliol, executive director of economic development for St. Joseph County, adding that May would be the earliest the abatement proposals could be completed.

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"Beyond the new jobs, the project also will create economic benefits for the community because of the additional business for construction trades, local suppliers and the additional spending in the community,” Schalliol added.

The contract calls for technological enhancements such as improved corrosion protection, improved fuel efficiency, anti-idling technology, upgraded vehicle architecture and the capability of employing lithium-ion batteries.

Email Tribune staff writer Ed Semmler at esemmler@sbtinfo.com.

This article originally appeared on South Bend Tribune: South Bend-based AM General seeking incentives for expansion plans