Auto parts supplier eyes Valparaiso investment

2013-10-02T06:30:00Z Auto parts supplier eyes Valparaiso investmentJoseph S. Pete, (219) 933-3316

An auto parts maker wants to invest $25 million in a new plant in either Indiana or Ohio, and will pump $2 million into new technology at its existing factory in Valparaiso if it picks the Hoosier state.

Ohio, however, has been courting Tinley Park-based auto parts maker UGN Inc. more aggressively.

Company executives are supposed to meet with Ohio Gov. John Kasich this week, but had not yet heard anything back from Indiana Gov. Mike Pence's office, the Indiana Economic Development Corp. or anyone else in state government as of Tuesday morning, said Peter Anthony, UGN's president and chief executive officer.

Anthony sent a letter to both state governments letting them know about the company's expansion plans, in the hope of seeing which would offer the sweetest incentives.

UGN plans to create 150 new jobs as part of the $25 million expansion, which is taking place because the first-tier auto parts supplier landed a new contract with a Japanese automaker. The company also could to add $2 million in equipment to its Valparaiso factory, where it makes a variety of products that include dash insulators, wheelhouse liners and carpets.

The 27-year-old company makes acoustic, interior trim and thermal management products, and has increased its sales by more than 50 percent over the last two years. UGN brings in more than $375 million a year in revenue, and has seven locations, including in Chicago Heights and Valparaiso.

UGN is considering a new Indiana location but ruled out expanding its 180,000-quare-foot Valparaiso factory, partly because it would become too large to be manageable, Anthony said. The company is instead looking at making carpet and underfloor materials in a new facility somewhere south of Indianapolis.

The company runs just-in-time factories, meaning they supply parts as they are ordered and do not stockpile inventory. Such suppliers typically locate close to the plants they feed with parts, to ensure timely delivery.

UGN plans to make a decision about where it will locate the factory over the next few months, and start construction by the beginning of next year.

"There are a variety of factors, such as the availability of labor, both skilled and for regular production," Anthony said. "We also want to ensure the incentives we receive are competitive in whatever area we choose so we can stay competitive in the auto supply chain."

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