Crothersville Town Council approves $54 million abatements for Aisin Drivetrain

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A Crothersville automotive parts manufacturer has received a $54.506 million tax abatement and expects to add around 75 to 85 new employees by December 2022.

On Tuesday night, the Crothersville Town Council unanimously approved resolutions for Aisin Drivetrain Inc. to invest $53 million for new manufacturing equipment and $380,000 in logistics equipment, both on a 10-year tax abatement, and $1.126 million in information technology equipment, which is for a five-year tax abatement.

The expansion accommodates design change requirements for the Toyota large capacity hybrid electric rear axle assembly (e-Four) and electric water pump (EWP).

“Obviously, the automotive industry is going that direction, and this is outstanding news that is going to happen here in Crothersville,” Jim Plump, executive director of Jackson County Industrial Development Corp., said while speaking on behalf of ADI.

The first abatement lets the company phase in paying property taxes over a 10-year period, and the second one will phase in for five years.

“As we generally have done throughout the county, IT equipment, we ask for five-year abatement simply because the life expectancy of IT equipment certainly is not what you’re going to see with manufacturing equipment,” Plump said.

ADI says the EWP equipment may be installed between Sept. 15 and Dec. 31, and the e-Four equipment may be installed between December of this year and April 2022.

The company currently has 424 employees. The total anticipated employment expansion may have an estimated total annual gross payroll enhancement to Jackson County of $3.2 million to $3.6 million, not considering benefits, ADI says.

Councilman Jamy Greathouse asked about the value of abatements, and Plump said as a rule, they are going to save a company about 50% on their property taxes.

“It certainly is made up by the jobs that they create and retain the taxes that the employees pay and certainly the value that a company like Aisin Drivetrain brings not only to Crothersville but all of Jakcson County and all of south central Indiana,” Plump said.

Greathouse said Crothersville Community School Corp. is one of the larger drawers from property taxes, so he asked if ADI would consider donating $10,000 to the district for the 10-year tax abatement. That’s because in Year 1, ADI will not pay any property taxes. Then in each subsequent year, it will pay 10%, 20% and so on.

“We see around these communities what happens if a school doesn’t exist anymore, and extended abatements and things, it does diminish the draw for the public schools,” Greathouse said. “It’s just something that I was throwing out there to entertain to try to make sure we can continue to fund the school to a certain extent while we continue to try to grow the rest of the community, as well.”

Wes Birdsong, finance department manager for ADI, said he can take that back to the company to discuss.

“We might have to break it into two pieces under two different budget cycles, but that’s definitely a conversation,” he said.

Councilman Chad Wilson said he appreciates ADI for being in the community and being involved, and then he made a motion to approve the resolution for the 10-year tax abatement. That was unanimously approved as was the five-year abatement.

Founded Oct. 1, 1996, ADI manufactures a wide range of products for customers in the automotive and heavy equipment industries, including Toyota, Lexus and Stellantis. These products include industrial transmissions, commercial transmissions, power steering columns and electric water pumps.

In May 2020, the town council approved a 10-year tax abatement for a $6.5 million investment for new manufacturing equipment and a five-year tax abatement for a $75,000 investment for information technology equipment. The third and final phase of a three-year project added equipment for Toyota and Lexus steering column model changes and an electric water pump for the Toyota Camry.

That was the start of the new electrification business at the Japan-owned company in the Crothersville Industrial Park.

Aisin has 10 companies in Indiana, including Aisin Drivetrain and Aisin Chemical Indiana LLC in Crothersville and Aisin USA Mfg. Inc. in Seymour.