FRANKFORT, Ky. – Gov. Andy Beshear announced even more growth for Kentucky’s automotive industry, as Nemak USA Inc., a manufacturer of innovative lightweight products for powertrain, e-mobility and structure applications, will create 170 well-paying jobs with a $27 million expansion of its Nemak Kentucky operation in Glasgow to support future electric vehicle-related business.
“The growth of our automotive industry during this record-breaking year for economic investment has been remarkable, and we are seeing more companies increase their focus on EV-related products,” Gov. Beshear said. “Nemak’s expansion will not only add to that growth, but also create a significant number of high-wage jobs for residents in Barren County and the surrounding region. I applaud Nemak’s decision to expand and look forward to many more years of success for the company in the commonwealth.”
Nemak’s investment will support building upgrades and new, state-of-the-art equipment at its facility on Prestwick Drive. The expansion will support new EV-related business and better position the operation for future contracts. The project also will increase the company’s training efforts for current and new employees in partnership with Southcentral Kentucky Community and Technical College and Western Kentucky University. Company leaders expect production of new parts to begin in early next year, with full production slated for Q3 2022.
The company operates a second facility in Glasgow on American Avenue. Nemak has operated in Barren County since 2012.
“Nemak is rapidly increasing our EV-related programs in order to support our customers in their mission for an all-electric future and a more sustainable mobility,” said Luis Peña, Nemak business unit director, USA. “Having the opportunity to expand our footprint at an existing plant aligns strongly with our commitment to our people and the communities in which we operate.”
Established in Mexico in 1979, Nemak manufactures innovative lightweight products for powertrain, e-mobility and structure applications for the automotive industry. Nemak Kentucky supports other companies in the state, as 20% of its spending in 2020 went toward products sourced from suppliers in the commonwealth. In addition to its Kentucky presence, Nemak has U.S. locations in Alabama, Michigan, Tennessee and Wisconsin. The company employs over 22,000 people at 38 facilities in 15 countries.
Currently, more than 525 motor vehicle-related facilities operate in Kentucky, employing over 100,000 full time. In 2021, automotive companies have announced new-location and expansion projects creating 7,300-plus full-time jobs with over $7 billion in new investments.
Barren County Judge/Executive Micheal Hale is glad to see Nemak expand its presence in the region.
“We are excited to support Nemak in this substantial expansion here in Barren County,” Judge/Executive Hale said. “For over a decade, Nemak has been a tremendous community partner and we couldn’t be more thrilled about them choosing to reinvest and strengthen their presence in Glasgow.”
Glasgow Mayor Harold Armstrong noted the company’s important role in the local business community.
“The City of Glasgow is fortunate to have companies like Nemak in our community. Today’s announcement is another example of their strong presence as an industry leader, as well as a significant contributor to our economy,” Mayor Armstrong said. “Thank you to Nemak and all of their employees for helping Glasgow to again solidify our position as an automotive industry powerhouse.”
Maureen Carpenter, executive director of the Barren County Economic Authority, lauded the company’s commitment.
“On behalf of the Barren County Economic Authority, I extend our congratulations to Nemak and their entire team,” Carpenter said. “This expansion will have a significant economic impact on the community bringing important capital investment and high-paying new job opportunities for our residents, we are excited to work with Nemak on this project.”
Nemak’s investment and planned job creation furthers recent economic momentum in the commonwealth, as the state builds back stronger following the effects of the pandemic.
This year, the commonwealth has shattered every economic development record in the books for yearly investment totals. Year-to-date, private-sector new-location and expansion announcements include over $10 billion in total planned investment and commitments to create 15,200-plus full-time jobs across the coming years. Through September, Kentucky’s average incentivized hourly wage is $24.15 before benefits, a 10% increase over the previous year.
In September, Gov. Beshear, Ford Motor Co. Executive Chair Bill Ford, CEO Jim Farley and Dong-Seob Jee, president of SK Innovation’s battery business, announced the single largest economic development project in the history of the commonwealth, celebrating a transformative $5.8 billion investment that will create 5,000 jobs and places Kentucky at the forefront of the automotive industry’s future.
In July, thanks to strong fiscal management by the Beshear administration, the state budget office reported the commonwealth ended the 2021 fiscal year with a general fund surplus of over $1.1 billion – the highest ever in the commonwealth – and a 10.9% increase in general fund receipts to $12.8 billion.
In May, Moody’s Analytics published a positive economic outlook for Kentucky, noting mass vaccination as the driving force behind a sustained recovery in consumer services. The state’s recovery, Moody’s said, benefited from earlier reopening efforts and increased demand for manufactured goods over services. The report also found Kentucky’s manufacturing industry outperformed the nation’s since the national downturn last year.
Fitch Ratings in May improved the state’s financial outlook to stable, reflecting the commonwealth’s solid economic recovery. The state’s April sales tax receipts set an all-time monthly record at $486.5 million, as did vehicle usage tax receipts at over $64 million.
In March, Site Selection magazine’s annual Governor’s Cup rankings for 2020 positioned Kentucky atop the South Central region, and third nationally, for qualifying projects per capita. The commonwealth also placed seventh overall in total projects, the highest of any state with a population under 5 million. Site Selection also recently placed Kentucky in a tie for fifth in its 2021 Prosperity Cup rankings, positioning the state among the national leaders for business climate.
To encourage investment and job growth in the community, the Kentucky Economic Development Finance Authority (KEDFA) last week preliminarily approved a 10-year incentive agreement with the company under the Kentucky Business Investment program. The performance-based agreement can provide up to $2.5 million in tax incentives based on the company’s investment of $27 million and annual targets of:
- Creation and maintenance of 170 Kentucky-resident, full-time jobs across 10 years; and
- Paying an average hourly wage of $35 including benefits across those jobs.
By meeting its annual targets over the agreement term, the company can be eligible to keep a portion of the new tax revenue it generates. The company may claim eligible incentives against its income tax liability and/or wage assessments.
In addition, Nemak can receive resources from Kentucky’s workforce service providers. Those include no-cost recruitment and job placement services, reduced-cost customized training and job-training incentives.
For more information on Nemak, visit Nemak.com.
A detailed community profile for Barren County can be viewed here.
Information on Kentucky’s economic development efforts and programs is available at CED.ky.gov. Fans of the Cabinet for Economic Development can also join the discussion at facebook.com/CEDkygov, on Twitter @CEDkygov, Instagram @CEDkygov and LinkedIn.