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NINETY EIGHT REGENCY

Saab's choice hailed as boost

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Saab's choice hailed as boost

Tax breaks OK'd for HQ; site selection reaffirms region as auto player, analysts say

Robert Snell and Mark Hornbeck / The Detroit News

Saab's decision to open its North American headquarters in Royal Oak is an important symbolic boost for an area spurned by other automakers -- namely Volkswagen in 2007 -- and decimated by the downsizing of General Motors Co. and Chrysler Group LLC, analysts say.

The Michigan Economic Growth Authority Tuesday gave Saab Cars North America Inc. a $1.2 million high-technology employment tax break over five years. The tax break comes less than a month after GM finalized the sale of Saab to Dutch luxury automaker Spyker Cars NV, in a $74 million deal.

The company intends to hire 60 employees with an average wage of about $88,000 a year at an industrial building at 4327 Delemere Court between 14 Mile and Normandy, for a total investment of $2.4 million.

The decision by Saab will bring in almost $2 million in state tax revenue and serves as a reminder that Michigan, despite thousands of manufacturing job losses in recent years, remains a key player in the auto industry.

"A job is a job and one job is better than no jobs," said David Cole, chairman of the Center for Automotive Research in Ann Arbor.

"Michigan is still a pretty good place to do business. When you are putting in an office and need experienced automotive people, this is where you find more of them than any other place in the world."

The automaker will have about $500 million a year in sales in the United States, Canada and Mexico, said Mike Colleran, chief operating officer of Saab Cars North America. He said Michigan continues to be the hub of the North American auto industry.

"There are great suppliers here, and the human resources here are second to none," he said.

Saab's headquarters will house sales and marketing operations, advertising, technical assistance and customer support, and perhaps parts testing and vehicle evaluations.

Other operations in Royal Oak would include human resources, accounting, IT, legal and clerical staff. Eventually, distribution for Canada and Mexico could be Royal Oak-based as well.

By 2014, the number of jobs could jump to 158, which would boost state revenue by almost $2 million.

In addition to the state tax incentive, the city of Royal Oak has approved a personal property tax break worth about $29,000.

The announcement comes less than three years after Volkswagen of America announced it was moving its North American headquarters, and about 400 jobs, from Auburn Hills to Virginia.

The Saab headquarters will not employ as many people or create a significant amount of spinoff jobs, Cole said, but the automaker will benefit from close proximity to GM, which for a while will provide vehicles and technology. GM retains preferred shares in Saab worth $326 million

Also Tuesday, the Michigan Economic Growth Authority board approved tax credits for 11 companies and two brownfield redevelopment projects intended to create 2,790 direct jobs and generate more than $742 million in investment.

From The Detroit News: http://www.detnews.com/article/20100317/AUTO01/3170339/1148/auto01/Saab-s-choice-hailed-as-boost#ixzz0iR9Sw3XZ

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