India auto parts supplier to invest $31.9M in Detroit

Michael Wayland
The Detroit News
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India-based Sakthi Automotive Group plans to significantly expand its operations in southwest Detroit.

The Michigan Strategic Fund on Tu esday announced that the auto parts supplier, a part of $1.2-billion industrial conglomerate Sakthi Group, will invest up to $31.9 million to expand its operations near its current facility on West Fort near Livernois.

The investment includes the addition of 350 new jobs in Detroit — more than doubling its workforce of about 200.

As part of the investment and jobs, the MSF approved a $3.5-million performance-based grant for Sakthi. The company, according to state officials, chose the grant over offers of free land, training grants and low-interest construction loans dangled by other states including Ohio, Georgia and South Carolina.

The state funds will be used to help offset the higher operating costs than other states, interior site conditions, and need to locate, hire and retain a skilled workforce for its facility in Detroit, according to documents from the MSF approval of state incentives.

The investment and new jobs are expected by 2020, according to state officials. A spokesperson for Sakthi could not immediately be reached.

The investment, according to the document, includes a new aluminum foundry to support auto industry initiatives to reduce weight; planned purchase and reuse of the former Southwestern High School, just west of their current facility, into a manufacturing, advanced worker training and employee wellness center; and the development of two other buildings for "additional manufacturing and machining operations."

This is the second time the state has worked with the south India-based company. In 2012, Sakthi received a $1.5 million incentive from the Michigan Business Development Program to open the Detroit plant.

Earlier this year, U.S. and Detroit officials touted Sakthi as a success story after the company pledged to hire at least two formerly incarcerated individuals each month.

"What Sakthi has done is a great example of taking returning citizens and putting them in jobs where they are highly productive and I think probably very loyal," said Mayor Mike Duggan, when touring the plant April 15. "You don't see much turnover with returning citizens."

Duggan was joined by U.S. Labor Secretary Thomas Perez, which included a look at the production of various parts for a variety of automakers, including Ford Motor Co. and General Motors Co. They also got a glimpse of the design and testing process at the facility.

Staff Writer Lauren Abdel-Razzaq contributed.

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