Auto supplier to ramp up operations

BOYNE CITY – Officials at LexaMar Corporation of Boyne City will drop $16 million to renovate and expand their plant.

The expansion will start next spring and take nine months to a year to complete, according to Randy Smallbone, vice president and chief financial officer of Decoma International, Inc., parent company of Lexamar.

Additional business contracts spurred the decision to expand, though Smallbone declined to provide details of the contracts.

Two million will fund a 40,000 square-foot addition to the current 100,000 square-foot facility, which houses manufacturing operations for plastic injection-molded automobile parts. The remaining $14 million will purchase new machinery and equipment, including an additional molding machine and coating line.

This will be the fourth expansion since LexaMar opened in Boyne City in 1985, indicating the company’s confidence in the area.

“We have a great workforce in northern Michigan, particularly Boyne City. We like to invest in our existing operations and give people in the community opportunities to expand with us,” said Smallbone.

The renovation and expansion is expected to create 50 new jobs, bringing LexaMar’s Boyne City workforce to 360. The announcement of additional job opportunities comes as welcome news in the wake of recent announcements of plant closures by Thomas & Betts Electronic OEM and Dura Automotive in East Jordan. Thomas & Betts employed 85 workers and was closed due to its takeover by Tyco Electronics Corporation of Pennsylvania. The Dura plant closing in 2001 will eliminate nearly 300 jobs.

“LexaMar’s expansion means a great deal to the city,” says City Manager Eric Strahl. “The expansion coupled with the additional jobs are going to help the area’s whole economy.”

To facilitate the expansion, the city granted LexaMar a 12-year tax abatement, or industrial facilities exemption, as permitted by state law. Based on a City levy of 22 mills and 55 mills levied by other governmental bodies, Strahl estimates that first year savings to the company will be in the $220,000 range. That amount will be less in following years, due to depreciation.

According to Strahl, there was no opposition to the City granting the abatement.

“The City and LexaMar have tried to work together in the past. They’ve been helpful to the local economy, and we’d like to see that continue. We realize they’re in a very competitive market as far as being suppliers to the automobile industry.”

Decoma is a publicly-traded company on the NASDAQ and Toronto stock exchanges.