HomeMy WebLinkAbout0212-2007 Schafer Gear Works chooses South Bend for ‘substantial investment’ O� 11,013 T$.&
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Office of the Mayor
NEWS RELEASE
February 12,2007
3:10 p.m.
Contact: Mikki Dobski, Director of Communications& Special Projects, 235-5855 or 876-1564
Don Inks, Director of Economic Development, 235-9339
Schafer Gear Works chooses South Bend for `substantial investment'
A South Bend company is making an $843,000 investment in its headquarters in the
city's Airport Economic Development Area rather than in two other cities where the firm
has production facilities.
The South Bend Common Council will consider a resolution tonight (Feb. 12,2007) to
grant a five-year tax abatement to Schafer Gear Works, 4701 Nimtz Parkway, to enable
the company to add new equipment and expand its operations.
Schafer Gear Works, a leading producer of high-precision, custom-engineered gears and
machined parts,will buy and install equipment valued at $843,000 and create one new,
permanent full-time position with an estimated salary of$34,320. The new equipment
consists of a gear-grinding machine plus automation and a hob sharpener.
Schafer Gear Works was one of three companies cited by Mayor Stephen Luecke in his
2007 State of the City address on Feb. 5. At least two others,McCormick and Co. and
Federal Mogul, also are "making substantial investments in new equipment for their
facilities,"Luecke said. "In highly competitive markets,these businesses cannot maintain
sales and employment levels without continual investment in more efficient equipment.
In some instances, these investments do not bring new jobs, but they help to make the
existing job base more secure."
Schaefer's expansion will enable ongoing employment of the company's 73 full-time
employees with an annual payroll of more than $2.7 million.
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Founded in 1934, Schafer is headquartered in South Bend in the Airport Economic
Development Area. The 108,000-square-foot plant is the largest of three production
facilities. The others, in Rockford, Ill., and Fort Wayne, Ind., are 45,000 and 12,000
square feet, respectively. Each of its plants is considered"world-class" facilities, linked
with modern communication systems, according to Schafer's web site.
"Without the abatement, we would have very seriously considered putting it in
Rockford," said Stan Blenke, Schafer's executive vice president. "There is no equipment
tax in Illinois."
Schafer serves a diverse customer base in aeronautics, automotive, farm implements, off-
highway equipment, power transmission, medical, mining and other industries.
Schafer has received eight previous tax abatements. Previously, it also received a federal
Small Business Administration loan and other funding to buy equipment needed to make
transmission gears for the Segway Human Transporter. It is the sole world supplier for
the machine.
"In our industry, if you do not continue to upgrade equipment, your survival rate is very
low,"Blenke said. "We continue to look to expand here in our South Bend facility with
the help of incentives from both the city and the state."
The company filed the petition for personal property tax abatement on Jan. 9. The city's
department of Community and Economic Development has recommended the abatement
of an estimated $51,360 in taxes over the five year period. The company still will pay an
estimated $26,726 in taxes during the period.
"Our longevity is a direct result of constantly upgrading our production, engineering,
testing and tolerance capabilities to world-class standards of gear-production
technology," according to the web site. "Survival in this business requires being
technologically fit. In the last decade,we have built a world-class production facility and
invested millions more in the latest ... gear-cutting and machining technology and
quality-assurance equipment."
The council meets at 7 p.m. in the fourth-floor Council Chambers of the County-City
Building, 227 W. Jefferson Blvd., South Bend.
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