Indian Automaker Mahindra Signs LoI for Plant in MichiganTop Stories

August 09, 2019 21:41
Indian Automaker Mahindra Signs LoI for Plant in Michigan

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Mahindra Automotive North America (MANA), a subsidiary of Indian automaker Mahindra & Mahindra, is considering to set up a plant in Flint, Michigan.

The facility will manufacture small delivery trucks, 180,000 units, for the United States Postal Service (USPS) if the contract comes through. The move could create up to 2,000 jobs.

The cost of one such truck is estimated between $25,000 and $35,000 (Rs 17.6 lakh and Rs 24.6 lakh) and the job is worth $6.3 billion (Rs 44,400 crore). The truck-supply contract will be spread over five years.

“The plant would also house production for a number of future products that have not been announced publicly. It is projected the plant will create up to 2,000 jobs over the first five years with additional jobs to follow,” Mahindra said in a statement.

The automaker has signed a Letter of Intent (LoI) with the RACER Trust, which was by the United States bankruptcy court to clean up and offer for redevelopment properties and other facilities owned by the General Motors Corp before its 2009 bankruptcy.

The plant is proposed come up in the former Buick City, a large land parcel that used to have a mega-complex producing vehicles under the Buick brand, a division of General Motors.

"We have a long-term product plan and we believe the former Buick City site in Flint is a strong contender for what would essentially be Mahindra's first large-scale manufacturing operation in the United States," said Rick Haas, president and the Chief Executive Officer (CEO) of Mahindra Automotive North America.

Mahindra was also in negotiations with several other states and the decision would in part be driven by the financial incentives offered by Michigan, the company said.

"Winning the USPS contract is a key element of our growth strategy but it's only a piece of what we have planned," said Haas.

Mahindra & Mahindra already has a plant in Auburn Hills, Michigan, and it will see a “significant facility expansion” to support new products for the United States market.

By Sowmya Sangam

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Michigan  Mahindra  business