American Axle ‘considering’ major redevelopment of its site

The city lost tax money several years ago when American Axle & Manufacturing demolished its plant on the Hamtramck side of the Detroit border. The company is now considering to expand its site back into Hamtramck to get into the EV market.

By Charles Sercombe
American Axle & Manufacturing might be returning a portion of their business back onto Hamtramck soil.
The auto manufacturer is “considering” – according to a Crain’s Detroit Business report — creating a $460 million electric vehicle research and supply park next to its headquarters.
If the plan comes to fruition, Hamtramck could, “could” being the key word, once again collect property and income taxes from the company.
Asked about the possibility, City Manager Max Garbarino was succinct in saying: “We shall see.”
Hamtramck’s relationship with American Axle has taken several twists and turns in the past.
Back in 2013, in our article about the death of American Axle founder Richard “Dick” Dauch, we reported:
Back in 1993, Richard Dauch was hailed as a hero for purchasing the failing Chevy Gear & Axle plant, which GM had planned to close down.
At the time, Dauch promised union workers that he would honor their contracts, and persuaded many to stick with him and not transfer to another GM plant. Union workers largely supported Dauch.
Dauch and his investors went on to turn the plant around and make it profitable. He also won the praise of local officials for tearing down dozens of blighted houses and closed businesses that had surrounded the plant’s complex.
Dauch’s aim was to make the complex more like a campus. The company built its world headquarters at the site of Holbrook and the I-75 service drive, another sign that he was committed to Detroit.
Hamtramck benefitted greatly from the plant’s existence, as part of it was located in the city. That produced millions of dollars in property taxes over the years.
But things took a sharp turn in 2008, when UAW workers went on strike. After six months of a bitter standoff, the workers agreed to a 50-percent pay cut. Dauch was rewarded with a several million dollar bonus.
Shortly after settling, the company unexpectedly closed down the plant and transferred work to its Mexico location.
After that 2009 closure, the other shoe dropped for Hamtramck. The city realized it would lose $500,000 a year in taxes formerly collected from the plant.
The company’s closure also coincided with the ending of a tax abatement Hamtramck had granted it.
That bit of history has also fueled anti-tax abatement advocates here in Hamtramck, who have argued against any future tax abatements.
However, city officials have ignored those protests in recent months and OK’d tax abatements for two redevelopment projects.
These recent abatements are different from earlier models. Instead of the city cutting property taxes, often in half, the property taxes in these two cases will remain the same for a number of years, and then adjust up to where they should be after the redevelopment is completed.
For the city, it means blighted buildings will be repurposed, and new businesses will be locating here – a far better deal than with the old-style tax agreements.
As of now, the area that once housed manufacturing plants at the American Axle site is being used by auto manufacturers as a place to park their unsold pick-up trucks and yet-to-be fleshed-out chassis.
Posted April 14, 2023