Spartan, Utilimaster Granted Tax Abatement

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June 9, 2011 by   Comments Off on Spartan, Utilimaster Granted Tax Abatement

The Wakarusa (Ind.) Town Council passed two resolutions declaring certain Utilimaster Corp. properties as revitalization areas for the purpose of 10-year tax abatements on both real and personal property for Utilimaster and Spartan Motors Inc., which owns Utilimaster.

According to the Goshen News, Utilimaster will be making real estate improvements of approximately $1.88 million, including adding about 6,000 square feet to Plant 11. The company committed to adding 60 additional jobs in return for the tax abatements.

Council member Phil Klotz said Spartan Motors will move part of its motorhome chassis department from Charlotte, Mich., to Wakarusa.

The tax abatement amounts to 100% the first year and goes down to 5% in the 10th year. Although the official abatement documents state the company will be adding 60 jobs, a sign by the road outside the plant says the company is hiring 100 people.

In a separate article, the South Bend Tribune reported that the Spartan chassis will be made at a building already on the Utilimaster property, which consists of four manufacturing and 15 additional buildings.

“One of our 10 strategic directives is customer-centric because in any business model, the closer you can get yourself to the customer, typically the easier it is to be more effective and efficient in growing the business relationship,” John Sztykiel, president and CEO of Spartan Motors, said. “Eighty-two percent of all recreational vehicles are manufactured in northern Indiana.

According to the state, Elkhart County will consider additional property tax abatement at the request of the Economic Development Corp. of Elkhart County. But Sztykiel seemed to downplay the role the incentives played in making the move in a phone interview with the Tribune on Wednesday (June 8).

“Indiana’s a great state and they have done a lot of things right from a business perspective,” he said. “But it simply boils down to we are within minutes of where 80% of the industry is, so just pure logic said this is the right thing to do.”

It was the company’s long-range thinking when it purchased Utilimaster in 2009, he said, adding that the company hopes for additional growth in the future.

“Obviously if the business grows, which we expect it to over time, from an RV perspective, our business would grow,” Sztykiel said.

There is not a whole lot of automation in the production of chassis so if sales grow, so will the work force, he said.

Sztykiel also noted that University of Michigan economist Richard Curtin, an RV industry adviser, has been stressing how speed to market will be even more critical as time goes on because people expect to have their product much faster.

The move of the chassis division ties in directly with that thought process, Sztykie said.

Spartan Motors was formed outside of Lansing in 1976 when a small group of automotive engineers, who had lost their jobs when their company went bankrupt, launched their own business. Today, it employs approximately 1,600 in six states and had $481 million in sales in 2010.

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