Georgia-based AGCO will spend $42 million over three years to expand its Jackson, Minn., tractor factory, officials said Wednesday.
The investment will increase production capacity by 25 percent and improve efficiencies over seven project phases. The project, which broke ground this week, is being done in response to "growing demand for the tractors and the application equipment built there," said AGCO Operations Director Eric Fisher in a statement.
Once completed, about 75 new workers will be added for a total of 1,200, officials said.
The first phase of the expansion will add 30,000 square feet to the tractor manufacturing area and boost production by about 20 percent, company officials said. That construction project will add a new robotic welder and sheet-metal laser cutter and should be completed by the fall of this year.
Future project phases include expanding the tractor assembly line and reconfiguring the area where sophisticated combines, hay tools, and farm sprayers are made. The company will also design a state-of-the-art equipment testing station.
The investments in Minnesota build upon AGCO's 2011 decision to move all of its North America large-tractor production from France to Jackson. Jackson was originally the home of Ag-Chem, which AGCO bought in 2001. Today, Jackson is where AGCO makes its Challenger and Massey Ferguson tractor brands.
"Continuing to invest here reinforces AGCO's commitment to bringing our North American customers high-quality tractors and application equipment built how the customer wants them," Fisher said in a statement. Company officials did not return phone calls seeking comment.
AGCO's factory expansion represents the latest flurry of industrial building activity around the state. Apogee is set to begin a $30 million expansion of its Viracon building-glass factory in Owatonna. Polaris Industries is spending $20 million to double the size of its ATV research and development center in Wyoming.
And in Maplewood, 3M Co. is just beginning the planning work for a $150 million research lab. That lab will replace the R&D center currently on 3M's campus headquarters. 3M is hoping for some tax increment finance aid from the state but must first wait for the legislature to finalize the state's omnibus budget, said Maplewood Assistant City Manager Chuck Ahl.
All the expansion plans have caught the eye of state officials who say the plant additions signal one more step in Minnesota's recovery from the dreadful Great Recession.
Katie Clark Sieben, commissioner of the Minnesota Department of Employment and Economic Development, said the expansions prove that "Minnesota's economy is thriving. In 2012 alone, Minnesota business expansions leveraged over $500 million of investment in the state. The state's recovery from the recession continues to gain momentum," she said.
With the help of recovering businesses, new construction projects and post expansion factory hires like the ones planned at AGCO, "We have recovered 90 percent of the jobs lost during the recession," Clark Sieben said.