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August 15, 2007
Efforts to attract more high-tech, high-knowledge jobs to Michigan bore some fruit Tuesday with the announcement that Detroit-based Caraco Pharmaceuticals Laboratories Ltd. is expected to add 598 jobs in the city over the next five years in a $14.5 million manufacturing expansion.
Caraco, a maker of generic prescription drugs, is one of six companies for which the Michigan Economic Development Corp. announced state and local tax breaks Tuesday, for a total of $52.3 million in new capital investment.
The expansions will create 1,139 direct jobs in high-tech companies, which the state is trying to nurture as its manufacturing base shrinks.
"Caraco is a perfect example of everything the MEDC and the governor are trying to accomplish with our economic development agenda," said Mike Shore, spokesman for the MEDC.
"They're non-automotive, they're well-recognized as a leader in their field in health care and medicine and they're really what we're hoping to do with all of our new technology outreach."
A state tax credit valued at $6.8 million over 10 years helped convince Caraco to expand in Michigan instead of in North Carolina or South Carolina, according to state officials.
The city of Detroit has approved two local tax abatements for up to 12 years to support the project. The value of that abatement is estimated at $5.7 million, when combined with personal property tax savings under the new Michigan Business Tax.
The MEDC also is working with the Michigan Department of Labor & Economic Growth, Henry Ford Community College, Wayne State University and Detroit Michigan Works! to develop and implement a recruitment and training program valued around $4.5 million over five years for new and current Caraco employees.
"This is exactly the kind of company we want in Detroit," said Liz Boyd, spokeswoman for Gov. Jennifer Granholm.
"This is the kind of company that can help Michigan grow."
The program was a key piece in sealing the Caraco deal, according to the MEDC, because the other states wooing Caraco were offering such programs.
The Detroit News reported in March that Caraco was planning to expand in Detroit but was being enticed by other states, among them South Carolina.
Keeping Caraco in Michigan is a bright spot for a state battered by recent deflating economic news, including the loss of high-paying, high-tech jobs.
In January, Pfizer Inc. announced it would close its massive research and development campus in Ann Arbor and a smaller facility in Plymouth, which collectively employed 2,160 people.
Then Comerica Inc. said it would move its headquarters from Detroit to Texas, taking with it 200 jobs and immeasurable headquarters prestige.
Caraco's planned expansion will boost the pill maker's production by 40 percent to 5 billion per year.
"The people that contribute to the company have done so much, and we wanted to add to that," Caraco CEO Daniel Movens said Tuesday.
"Also, remaining here allows us to continue forward with planned new products at lower costs. If we're going to remain competitive as a generics producer, we have to limit expenses. Staying here is the best way to do just that."
Detroit News Staff Writer Nathan Hurst contributed to this story.
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