HDI Landing Gear USA’s contract with Boeing, the largest in the Canadian firm’s history, could create as many as 50 new jobs and lead to an investment of $24.5 million locally, according to documents filed with Springfield.
The company is still negotiating with Springfield and state officials on several details of the agreement, said Stephane Arsenault, chief financial officer for HDI. However, an agreement approved unanimously by the Springfield City School District Board last week describes a 60 percent abatement that will last from 2015 through 2022.
Documents filed by the company indicate the 50 new jobs will add approximately $2.2 million in new payroll and retain more than $5.6 million in existing payroll for the company’s 92 current employees in Springfield. Overall, the company has about 130 employees statewide, including at a facility in Cleveland.
About 22 full-time jobs could be created in 2015, and another 28 full-time positions would be added in 2016.
Springfield city officials said it’s still too early to comment on the agreement but said after the school board approval of the deal, the next step is to finalize the agreement and take it to city commission for final approval.
The contract to produce landing gear for Boeing’s 777 and 777X programs shows the confidence the aircraft manufacturer has in HDI’s workforce, Arsenault said.
“This is the largest and tallest landing gear system that exists on the planet for aircraft,” Arsenault said. “That really proves the reputation of our business. It demonstrates the confidence that a company like Boeing has toward our business.”
Most of the company’s $24.5 million investment is expected to be in new machinery and equipment, although documents also show the company could invest as much as $2.1 million to improve existing buildings, and $3 million for furniture and fixtures.
The documents filed with Springfield also show those estimates could still change as the manufacturing plan is finalized.
The incentives are important for the company, Arsenault said, because of the competitive nature of the business as well as the investment needed to improve the local facility.
“We have good employees working for us there,” Arsenault said of Springfield. “It’s a big opportunity, but at the same time you have to understand this contract is very competitive. In order to achieve the objective, we need the support because we’re going to have to train people and make a significant investment and deliver a good, quality product on time for Boeing.”
The company’s filing with the city also notes that without the incentives, the project would not have been possible in Ohio.
“Heroux Devtek’s existing facilities compete against one another for capital expenditure, therefore another facility within the group could have won this mandate instead,” the document states.
The school board approved the abatement unanimously, but these kinds of agreements create a difficult situation for school districts because of how the state provides funding, said Ed Leventhal, president of the Board of Education for Springfield City Schools. While board members want to do their part to encourage job growth, tax abatements also mean less funding for the district, Leventhal said.
“The school board values our good working relationship with the city commission, and we certainly are very supportive of economic development in the city and want to do what we can to make growth happen especially within our city limits,” Leventhal said. “This, though, is another example of why funding our public schools through property taxes makes it so hard for growth and stability.”
Along with Boeing, Arsenault said HDI also designs and manufactures products for the U.S. military. The investment locally could eventually lead to additional growth and jobs in Springfield as the company becomes a bigger player in the industry.
“”This investment is a major stepping stone for Heroux-Devtek as it will become a Tier 1 provider to Boeing’s jewel aircraft, the 777,” the company’s filing states. “It is a unique opportunity for the Ohio plants and will solidify their future operations and position them worldwide.”
Heroux-Devtek was previously known locally as the Eagle Machine and Tool Co., located at 663 Montgomery Ave. That firm was purchased by Heroux-Devtek, a Canadian aerospace manufacturer, in 2010.
By the numbers
92 - Current number of HDI employees in Springfield
128 - Number of full-time HDI employees across Ohio
50 - Potential new jobs in Springfield
$24.5 million- Total potential investment here
Staying with the story
The Springfield News-Sun first reported in October about how a contract with Boeing could create more jobs in Springfield, and we will continue to follow the potential $24.5 million investment here.