May 27, 2014 at 1:00 am

Michigan-based supplier to invest up to $50M in Pontiac facility

A Michigan-based automotive supplier plans to invest up to $50 million in a new automotive components assembly facility in Pontiac, creating 450 new jobs at the site of a former General Motors plant.

Challenge Manufacturing Co., based in Walker, plans to build a 400,000-square-foot facility in Pontiac at 2100 S. Opdyke. The site, formerly the General Motors Pontiac East Assembly Plant, closed in 2009.

Pontiac has faced economic and employment blows over the past several years, as GM and others have closed factories, affecting thousands of people.

The Michigan Strategic Fund on Tuesday approved a $2.5 million grant for the company, which says because of new contracts it needs new assembly operations, according to the Michigan Economic Development Corp. The Michigan Strategic Fund board also will consider a brownfield tax-increment financing reimbursement valued at $2.2 million for the project, plus funds to help hire employees.

Additionally, the city of Pontiac has offered the company brownfield tax increment financing reimbursement of up to $5 million over 16 years and property tax abatement, according to the MEDC.

Gov. Rick Snyder, in an interview Tuesday, said the jobs to be created by the Challenge facility and about 200 by recycling firm Green Box NA’s Detroit project, also approved by the Michigan Strategic Fund on Tuesday, are big for Metro Detroit.

“If you’re talking 600-plus jobs in the Southeast Michigan area, that’s significant,” Snyder said. “So this is another good day. It shows our economy is coming and shows people want to come back and invest in our state.”

Investment is expected to begin this summer at the site, with some job creation expected to begin this year; for current hiring information, visit http://challenge-mfg.com/careers/.

The MEDC says incentives were necessary because the Pontiac site was in competition with an existing building in Ontario, where the company would not have had to clean up the site or invest in new construction. Challenge also was offered job creation and training incentives from the Southwestern Ontario Development Fund, according to the MEDC.

Challenge, a Tier 1 automotive supplier, was founded in 1981 and employs more than 2,000. The growing company, which has four facilities in West Michigan, makes engineered metal stampings and welded assemblies such as underbody and vehicle roofs for the auto industry.

Company officials could not be reached for comment. An executive told the Oakland Press last month that the company was considering building a facility in Pontiac to supply General Motors Co., in a move that would create 450 jobs.

The site was sold in September 2011 by RACER (Revitalizing Auto Communities Environmental Response) Trust to MMP Group-Assembly LLC. The trust, established in March 2011 by the U.S. Bankruptcy Court to liquidate and clean up “old” GM properties that were abandoned following the automaker’s 2009 bankruptcy, would not disclose the sales price and did not know who in that group was still the current owner.

The former Pontiac Assembly Plant that sold in 2011 included 162.4 acres and six buildings totaling 3.8 million square feet, according to the trust.

In 2013, GM announced it planned to invest $200 million to expand its Global Powertrain Engineering headquarters and through consolidations in other locations bring about 400 jobs to Pontiac. Some smaller manufacturers also have made recent investments in Pontiac.

Staff Writer Jim Lynch contributed.