The Chinese owners of Schwing America in White Bear Township want to build another construction equipment plant in the United States, igniting competition between Minnesota and several Southern states.
Louisiana, Texas, Georgia and others have expressed interest in the project, while Minnesota and local officials are putting together proposals and considering incentives worth millions.
“There are of course other offers. It’s a very competitive scenario,” said Madeline Koch, spokeswoman for the Minnesota Department of Employment and Economic Development. “We have been very involved in the process every step of the way. We have made our case for why we think Minnesota is the clear choice for expanding.”
Officials at Schwing America were not available for comment Wednesday.
Schwing America, which manufactures concrete pumps and booms in White Bear Township, tumbled through bankruptcy in 2009 but survived to enjoy the construction recovery.
Schwing — and its German parent company — were bought by China’s Xuzhou Construction Machinery Group (XCMG) last year.
Now state and local officials hope XCMG will invest here again, even if it’s with a different product. Schwing makes the concrete pumps that go on large construction trucks and XCMG makes construction cranes, bulldozers, loaders and other hefty equipment.
That kind of manufacturing is appealing to the state and region, said Mike Brown, spokesman for the private economic development group called Greater MSP. “I know that [Schwing’s parent firm] has been courted by the Southern states. But we have also been in contact with them,” Brown said. Greater MSP helped Schwing expand its local 350,000 square foot plant last year, which resulted in roughly 200 new jobs. “So we are certainly interested in proactively helping them if they are going to expand here.”
There are several opportunities to help attract manufacturers like XCMG, Brown said. In May, the state Legislature put through additional development funds. “There is the Minnesota Investment Fund, the Job Creation Fund and more funding for the Minnesota Job Skills Partnership,” Brown said. “It would be a matter of which ones make sense.”
Bill Short, White Bear Township treasurer and Economic Development Advisory Board member, met with Schwing officials in May and learned that the parent company was looking to build a 200,000-square-foot equipment assembly plant somewhere in the United States.
He has since met with the township’s economic authority and pitched a preliminary tax increment financing plan that could offer $2 million in incentives over 25 years. “We expect that if this site is selected that this plan would be accelerated,” Short said. “For the township, the only tool we have is tax increment financing, but it’s a pretty heavy tool. If this site were chosen, Schwing would end up demolishing old substandard buildings and we would help them offset the cost. It’s not going to be easy. But we want to help.”
Connexus Energy officials also met with Schwing officials and offered energy rebates on equipment, rate reductions and other possible scenarios should XCMG choose Minnesota for its next plant, said Randy Fordice, a spokesman with the Great River Energy co-op, of which Connexus is a member.
While Minnesota’s state, town and energy gurus plot for victory, it is not clear what incentives might be dangled by Southern states also in hot pursuit of XCMG. Economic development officials from Louisiana, Georgia and Texas either declined to comment or could not be reached for comment.
XCMG’s search for a new site comes as Minnesota has won several corporate and industrial expansions of late. 3M Co. is building a new $150 million R&D lab in Maplewood. AGCO is constructing its second $42 million expansion in two years in Jackson. And additions are underway by Viracon in Owatonna, Toro in Bloomington and Polaris in Wyoming.