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THREE RIVERS, MI — Michigan-based American Axle & Manufacturing is set to begin $132.9 million in facility upgrades and capital improvements at its sprawling Three Rivers campus. The facility upgrades will commence now that the Michigan Economic Development Corporation has approved a five-year tax exemption for the project, valued at $978,960. The tax break was announced by the MEDC on Tuesday, Oct. 28. “These investments are necessary to ensure our plant infrastructure and advanced manufacturing processes remain competitive, while supporting our highly skilled workforce,” said Tolga Oal, president of AAM’s driveline division. The investment also ensures the 70-year-old facility will be up to code and meet the strict requirements of the company’s OEM customers, Oal said. Capital improvements will be done inside and out, including upgrades to the facility’s roof, HVAC system and wastewater treatment system. The project also includes buying new machinery and equipment to upgrade production lines. AAM was founded in 1994, but its roots can be traced back to 1917 when GM built an aircraft parts manufacturing facility in Detroit. AAM is now headquartered at that site. In total, AAM has 80 facilities worldwide, spread across 18 countries. The Three Rivers facility, just north of Hoffman Street, is one of 16 AAM facilities in the state and currently the largest. The facility also employs the largest number of union workers in St. Joseph County. The Three Rivers plant presently has 800,000 square feet of manufacturing floor space and employs 1,100 people, said Danielle Emerson, MEDC spokesperson. According to MEDC documents, the $132.9 million investment will transform the facility into the company’s “Center of Excellence.” Erik Wilford, managing director of business development projects for the MEDC, told Crain’s Grand Rapids that the Three Rivers facility competes with one in Mexico for work. Tariffs are driving new opportunities to reinvest in Michigan plants, Wilford said. “We appreciate knowing that when we’re making multi-year investments in physical and human capital, we’re doing so in a location where we can count on partnerships that are necessary to sustain and grow our Three Rivers manufacturing facility to compete successfully in this dynamic, ever-changing industry,” Oal said. The company, which manufactures drivetrain and driveline components for the automotive industry, invested $40 million into the facility in 2021, creating 100 jobs at the time. RELATED: $40M expansion at Southwest Michigan manufacturing plant to create 100 new auto jobs AAM was also approved for a five-year State Essential Services Assessment tax exemption at that time. That one, set to expire in 2026, was valued at $468,888. “There are no new jobs formally associated with this project because the investment is intended to update and restore aging plant infrastructure and manufacturing processes to ensure ongoing competitiveness for new business opportunities,” Emerson said. “However, the company is hopeful the investments will lead to future new business awards as OEMs bring more manufacturers back to the U.S.” Jonas Peterson, CEO of Southwest Michigan First, called the $132.9 million investment a huge win for Southwest Michigan. “This commitment will position the plant and community for long-term success,” Peterson said. “By designating Three Rivers as its Center of Excellence, AAM is not only elevating the facility’s capabilities but also shining a spotlight on the extraordinary talent and craftsmanship of our regional workforce. “We’re deeply grateful for AAM’s continued investment in people, innovation, and community partnerships that strengthen the entire region.” The city of Three Rivers is considered an Eligible Distressed Area as defined by the Michigan State Housing Development Authority. The designation makes the area a key focal point of interest for job retention, capital investment and community revitalization for the state, according to MEDC documents. Want more Kalamazoo-area news? Bookmark MLive’s local Kalamazoo news page.
