One of Jackson County’s largest employers and a smaller company have announced investments at their facilities.
During a meeting Monday night, the Seymour City Council approved statements of benefits and tax abatements for Valeo North America Inc. and O&K American Corp. Those came on 5-0 votes with councilmen Drew Storey and Chad Hubbard absent.
A tax abatement is a 10-year period where companies pay 10% more on taxes each consecutive year. Companies do not pay any taxes on the first year of a tax abatement.
Councilman Seth Davidson, chairman of the industrial development committee, introduced the resolutions, and Jim Plump, executive director of Jackson County Industrial Development Corp., spoke on behalf of the companies Monday night.
Matthew Morley with Valeo attended virtually, while Darrell Clodfelder, chief manufacturing officer for O&K, and Kate Womack, director of JM Tax Advocates, were there in person.
Valeo, located at 1231 A Ave. North in the Freeman Field Industrial Park, received a tax abatement totaling $32 million for manufacturing equipment. That investment will allow the global automotive supplier to retain its current workforce of 1,958 with salaries of $160 million.
Plump said the investment will start sometime in January and conclude at the end of 2023, and there will be no jobs added.
O&K, which specializes in manufacturing cold heading steel wire and is located at 1625 Bateman Drive in the Eastside Industrial Park, was approved for tax abatements for personal property — around $2.4 million in manufacturing equipment and $55,000 in information technology equipment — and real property — approximately $500,000.
Plump said this investment will retain the current workforce of 61 with salaries of more than $2.8 million and result in the addition of nearly 20 employees. Their combined salaries would be around $900,000, and their benefits would include health insurance, a 401(k) retirement plan and extensive internal training for establishing and maintaining a successful operation.
The manufacturing equipment includes adding two wire draw machines that would shift more production from Japan to the Seymour facility to improve supply chain logistics and response time to the company’s major customers, according to the statement of benefits.
Of the IT equipment, Plump said. “This is not software as much as it is hardware. They will have a life expectancy of 10 years on the IT equipment, which generally, we come to you with five-year (abatement), but we’re asking 10-year because it will still be in service in 10 years.”
Womack said the new equipment would occur in three phases, and O&K will be coming back to the council in the future for consideration of approval of other abatements.
The first phase is for the abatement granted Monday night for equipment to be installed between now and Dec. 31, 2023. The second phase will be for nearly $600,000 in new manufacturing equipment that will be installed in 2024, and the third phase will be for around $1 million in new manufacturing and IT equipment that would be installed in 2025.
The real property involves remodeling office space to accommodate the additional employees and improve their working space.
Plump also said Indiana Economic Development Corp. is offering some Economic Development for a Growing Economy, or EDGE, tax credits to O&K. Those go against corporate income tax that corporations have to pay, and if there is additional money after their corporate tax liability is paid, that can come back to the company in the form of a cash refund. That’s generally done in a five- to 10-year period.
Seymour Mayor Matt Nicholson thanked both companies for their investments in the city.