A European automotive parts maker has confirmed plans to renovate and occupy a shuttered factory in Salem, saying it will eventually employ an estimated 119 people.
STS Group is repurposing part of the former General Electric Co. plant at Roanoke Boulevard and Electric Road (Virginia 419). The goods produced there will go to Volvo Trucks in Dublin, officials confirmed Thursday in a joint announcement with Gov. Glenn Youngkin.
STS said it will spend $32 million to customize 200,000 square feet of the existing structure and attach a 32,000-square-foot building. Construction is underway at what will become the Germany company’s first U.S. manufacturing site. Production is expected to start next year.
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The company two years ago announced plans for a new facility in a Wythe County industrial park, but called it off in response to escalating costs. STS shifted its search to finding an existing building and, aided by Roanoke Valley economic developers since last summer, settled on the place where thousands of GE workers made industrial goods from 1955 to 2019.
“It was a priority to keep STS Group’s planned operation in the commonwealth, boosting our automotive manufacturing sector and foreign direct investment,” Virginia Secretary of Commerce and Trade Caren Merrick said in Thursday’s announcement.
STS is “a feather in our cap as far as the automotive sector,” said John Hull, who directs the Roanoke Regional Partnership. The ‘sector’ extends as far as an hour’s drive from Roanoke and employs more than 5,000 people producing such goods as ignition systems, truck rails, transmission parts, axles and tires, he added.
The former plant’s production space sat empty for a few years after GE wound down operations in response to declining orders. In 2022, it was bought by Phoenix Investors, a private real estate company that modernizes aging manufacturing plants, for $11.4 million.
Phoenix filed plans depicting a rectangular addition with accommodations for cranes, paint storage and a dust collector inside, with a loading dock and heavy-duty asphalt pavement outside the structure. Those plans identified STS as the future tenant.
But, before Thursday, officials including those at STS, Phoenix and in local government, declined to specify any project details, despite construction work having already begun.
Youngkin’s announcement on Thursday confirmed what had been apparent for months to passers-by of the old Salem GE plant as he celebrated “a vacant facility’s return to productive use.”
Alberto Buniato, CEO of STS Group, said in the governor’s announcement that “Salem is a perfect base for STS Group to start its footprint in the USA, following existing customers locally and extending the customer portfolio.”
In addition to supplying Volvo, the future Salem operation will manufacture products for other truck and automotive facilities in the Midwest and Southeast, the release said without naming any of the other customers.
Virginia will contribute a $500,000 grant to the project, incentives which come along with unspecified “local assistance with financing,” the announcement said.
Soon after the announcement was released to the public, the Salem Economic Development Authority announced the scheduling of a special meeting Friday. The body plans to loan the project $16.3 million and provide a machine and tool tax grant of up to $500,000 to match the state’s $500,000, Salem spokesman Mike Stevens said.
“STS Group AG, headquartered in Hagen, Germany, develops, manufactures, and supplies products and solutions for components made of plastic or composite material (“hard trim products”) for the automobile and trucking industries,” Thursday’s announcement said.
“TS Group’s customer base includes a number of major automobile and commercial vehicle producers. The company operates 12 plants in four countries on three continents, with production facilities in its key regional markets of Europe, China, and the Americas.”
STS plans to hire individuals skilled in automation, machine programming and robotics. Details will be available at www.adlerpelzer.com/career.