Lear to build EV parts plant in Michigan to supply GM

Lear Corp. is creating a new electric vehicle parts plant north of Detroit as part of several expansion projects in Michigan, the state announced Tuesday.

Michigan officials approved Tuesday an incentives package worth $6.4 million for Lear's expansion plans.

The supplier's proposed $112.5 million in capital investment and creation of up to 500 new jobs is being supported by a $4.5 million business development grant and a tax exemption worth $1.9 million, according to a briefing memo from the Michigan Economic Development Corp.

The planned investment would be spread across three sites. The Oakland County project is the largest — an $80 million plant at 5600 Bow Pointe Drive, formerly home to auto supplier Marelli North America Inc., which closed the plant last year, according to the company.

Michigan officials said the incentives are needed to secure the business over competing sites in Texas and Mexico, though Lear announced a month ago that the plant would be in Michigan. A specific location was not provided at the time.

The 120,000-square-foot plant will supply battery disconnect units for General Motors. Half of the facility will be dedicated to production while the rest will be used for warehousing, lab, testing and office space.

In tandem with the new plant, Lear said it plans to upgrade its Sterling Heights, Mich., plant at 6450 Dobry Drive. The plant, acquired by Lear last year and operating as M&N Plastics, would increase production needed for the battery assemblies being supplied to GM.

Additionally, Lear is considering an expansion of its 710 Carver St. plant in Traverse City, Mich., to manufacture EV battery pack components.

"The Company's decision of whether to build out a new facility in Michigan instead of expanding operations in other locations outside of Michigan requires incentive support to ensure the new work is located in Michigan," according to the MEDC memo.

Lear, which makes most of its $19 billion annual revenue from supplying seats, is looking to grow its E-Systems segment as the auto industry adapts to EVs. It is also moving to localize some of its manufacturing footprint in response to industry demands and federal incentives for onshoring, such as the Inflation Reduction Act.

The new jobs in Michigan would pay an average wage of $20.30 plus benefits, according to the MEDC.

The state also approved a 15-year, 100 percent SESA Exemption for the Oakland County plant, in Independence Township, waiving the SESA guideline that a project be located in an "eligible distressed area" and that it includes two investments greater than $100 million.

The state waived the requirements "due to the competitive nature of the project and the desire to capture as much investment as possible."

Independence Township has agreed to support the project with "staff, financial or economic assistance," according to the memo.

To receive the new incentives, Lear must create by Oct. 31, 2026, at least 400 qualified new jobs above its base employment level, which is 3,265, according to terms of the agreement with the MEDC. The incentives work out to $9,000 per new job.