Hundreds of Americans could lose their jobs if an international logistical services firm moves its production plant from Grand Rapids, Mich. to Mexico.
Jobs at Dematic would move “over an approximate six- to nine-month period, likely beginning in early 2016 and concluding in September 2016,” according to an announcement released by the company.
Dematic claims that it’s proposal to move 300 American jobs to Mexico “is part of an effort to remain cost competitive for its customers,” according to ABC WZZM 13. Dematic vice president Robert Arguelles said this shift in jobs would not affect Dematic’s 900 Michigan-based white-collar workers.
The company has held a Michigan presence for 70 years, even though Dematic headquarters is based in the small European country of Luxembourg — a nation known for low corporate tax rates. Currently, the Grand Rapids production plant “designs and builds automated systems for warehouses, distribution centers and other sites with material-moving needs,” according to MLive.
To incentivize hiring and investment, Dematic received a hefty tax break in 2010 from the Michigan Economic Development Corporation (MEDC), a state-funded investment vehicle, according to Fox 17.
At the recommendation of the MEDC, Dematic received $3.2 million in state tax credits over a five-year stretch from the Michigan Economic Growth Authority, acccording to the Michigan House Appropriations Committee
“In exchange, Dematic invested $10.9 million to expand its research and development, administrative services, sales, and in-house production in Grand Rapids, including to create a total of 910 high-paying jobs in engineering, sales, and research, 505 of which would be company jobs,” Fox 17 reported.
The local chapter of the United Auto Workers Union strongly criticized the possible move outside of the U.S. Chapter President and Dematic employee Scott Wahlfeldt stated the firm’s decision-making was the result of “corporate greed,” according to the MLive report.
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