Council OKs tax abatement for Heartland

Celebrating its 30th anniversary as part of the Greencastle industrial landscape, Heartland Automotive was granted tax abatement Thursday night on an additional $5.9 million investment in new equipment.

That investment will add new injection-molding machines, exterior paint robots, toolings and air compressors for the manufacturing line at the East Side facility Heartland has called home since locating in Greencastle in 1987 as the American headquarters for Shigeru Industries of Ota City, Japan.

What the latest investment won’t do, however, is add any new jobs.

Instead, the 10-year abatement will help retain the 422 workers employed at Heartland, Greencastle/Putnam County Economic Development Director Kristin Clary told the City Council.

Clary said that as equipment gets more high-tech and becomes more efficient, the tendency is to think employees can be replaced by automation. However, Heartland does a good job of creating new lines and new opportunities for its employees as it retains them, she said.

Last year, with the demand for Subaru vehicles increasing and production ramping up at the Subaru of Indiana (SIA) plant in Lafayette, more equipment and more jobs made their way to Heartland, which supplies auto parts to SIA.

In 2016 the Greencastle plant added $8 million in new equipment and an additional 48 jobs locally. Heartland was also granted tax abatement for that investment.

Development at Heartland has seen the local payroll grow to $16,333,406, Clary said. Starting pay is typically $13.50 per hour.

Tax abatement, spelled out within Resolution 2017-16, was unanimously approved following a motion by Council President Adam Cohen. The abatement is adopted on a sliding scale with 100 percent tax abatement in year one, decreasing by 10 percent each year until it zeros out and Heartland is paying full taxes on the equipment in the 11th year.

Councilman Steve Fields asked Heartland Manager of Administration Ritsuko Abrams what the oldest equipment is at the factory, wondering if any equipment was replaced or obsolete before it zeroed out.

The oldest machinery on site, she said, is as old as the company itself -- from 1987. Heartland has a number of pieces that are no longer abated, Abrams added.

“On one of our trips to Japan,” Mayor Bill Dory said, “they showed us a piece of equipment from 1946 that they were replacing.”

That machinery had been retrofitted a number of times, he said.

The project to add the new equipment is expected to begin Sept. 25 and be completed by April 30.

Heartland Automotive has made a habit of expanding its Putnam County operations over 30 years of calling Greencastle its American headquarters.

Over that time, Heartland’s investment in equipment alone has well exceeded $50 million, local officials have noted.

When it purchased the former Ryan Building, Heartland initially promised to bring 100 new positions to a community that had just lost 985 jobs with the closing of the Greencastle IBM plant. The 107,000-square-foot facility at 300 S. Warren Drive, which IBM had mainly used for storage, was built as a new Angwell Curtain factory facility in the late 1960s.

Today, after expanding operations multiple times, Heartland now produces auto parts in a 300,000-square-foot plant that bears little resemblance to the original facility.