AM General Sells Indiana Factory to EV Startup
The sale to SF Motors will preserve 430 auto worker jobs after AM General’s current production contract expires later this year, the companies say, although retooling the plant will take 12 to 18 months.
June 22, 2017
A Silicon Valley subsidiary of a Chinese automaker reaches an agreement with AM General to acquire the contract assembler’s commercial assembly plant in Mishawaka, IN, where it plans to manufacture electric vehicles.
Terms of the purchase by SF Motors, expected to be completed in the fourth quarter, are not disclosed, but a report in the South Bend Tribune cites publicly available filings showing the Santa Clara, CA-based company is paying $110 million for the plant, land and some equipment.
Sokon Industry Group, a Chinese company engaged in R&D, manufacturing and sales of automobiles, engines and accessories, recently established a U.S.-based headquarters as the first step in launching SF Motors, described in news release as a dedicated electric-vehicle clean-mobility brand, on the West Coast.
The sale means 430 auto worker jobs, including about 370 hourly positions, will be preserved after AM General’s current production contract expires later this year, the companies say, although the plant will be closed 12 to 18 months for retooling. SF Motors says it will invest $30 million in plant upgrades.
SF Motors will use the facility to produce intelligent electric vehicles and expects to source subassemblies, parts, and materials for its new operations predominantly from U.S. suppliers, the company says.
The 675,000-sq.-ft. (62,700-sq.-m) plant now builds Mercedes-Benz R-Class SUVs, making AM General the German automaker’s first and only contract assembler in the U.S. The Indiana plant also builds the MV-1 wheelchair-accessible van engineered by AM General for its Mobility Ventures subsidiary.
The 15-year-old plant in the past has assembled Hummer H1 and H2 large SUVs and Ford Transit Connect Electric vans. It contracted with Mercedes-Benz in early 2015 to assemble R-Class vehicles that had been built at the automaker’s Vance, AL, plant.
The transaction does not affect AM General’s core military-related business, and its military assembly plant where High Mobility Multipurpose Wheeled Vehicles, or HMMWVs, are produced will operate separately and fully independent of the commercial-assembly facility.
“This transaction represents a unique opportunity to grow our intelligent electric-vehicle business through the addition of an existing production facility and a skilled work force,” SF Motors CEO John Zhang says in the release.
“This transaction puts the (plant) on solid ground to keep the assembly lines running, providing our tremendously talented and dedicated employees new opportunities as part of SF Motors and its plans to produce next-generation electric vehicles,” says AM General President and CEO Andy Hove says.
SF Motors recently established a powertrain and intelligent technical R&D center in Silicon Valley, as well as an engineering R&D facility near Ann Arbor, MI.
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