Lear Corp. EV Components Facilities

Approximately $112 million from the federal government will go toward creating at least 500 new jobs at Lear Corp. to support the growing demand for electric vehicles (EVs). This investment will expand three facilities in southeastern Michigan and Traverse City, allowing the Michigan-headquartered Lear Corp. to remain in the region where it began.

Historical context

Michigan, and Traverse City in particular, has long been home to Lear Corp., a company that creates car components:

• “Lear, a Michigan-based company that manufactures automotive seating and electrical systems, already has a presence in Traverse City. … Lear is headquartered in Southfield and has a century-long history in the state.” – MLive, January 5, 2023
• “The company, which was founded in 1917 in Detroit, previously received a Michigan Economic Growth Authority tax abatement in 2009 and a 2017 performance-based grant that helped create 435 new jobs. Lear went public in 1994 and currently operates 253 facilities in 38 countries with more than 160,000 employees. It reported third quarter sales of $5.2 billion, a 23-percent year-over-year increase, and an adjusted net income of $140 million.” – MiBiz, December 13, 2022

Project summary

Lear Corp. will be expanding its facilities to increase the company’s ability to produce EV components:

• “Tier 1 automotive supplier Lear Corp. plans a $112.5 million expansion at three facilities in southeastern Michigan and Traverse City to support the manufacturer’s ongoing growth in the electric vehicle market. The Southfield-based company, which specializes in seating and electrical systems, plans a new 120,000-square-foot facility in Independence Township in Oakland County. The company also expects to ramp up operations at existing facilities Traverse City and Macomb County. … Under the expansion, Lear (NYSE: LEA) will produce electrical subsystems for electric vehicle batteries through 2030. The battery disconnect units and interconnect cell boards control the power transfer from a vehicle’s battery to the electrical system.” – MiBiz, December 13, 2022
• “The Independence Township location would primarily be used for production in addition to warehousing, testing and office space. Lear plans to use its existing Traverse City plant for manufacturing components related to the EV battery back, and both the Traverse City and Sterling Heights plant in Macomb County will supply the new Oakland County facility.” – MiBiz, December 13, 2022
• “The new facility will supply GM with battery disconnect units for use in future GM EVs. Late this past October, Lear Corporation announced that [it] had been selected as the exclusive supplier of battery disconnect units for new GM Ultium-based full-size SUVs and trucks through the 2030 calendar year. The selection expands on Lear’s existing business with GM, and represents the largest single electrification platform win for the company’s E-Systems division. Lear currently makes the majority of its annual revenue by supplying seats.” – GM Authority, December 13, 2022
• “In December, Lear received a $4.5 million grant and a tax incentive worth $1.9 million, approved by the Michigan Strategic Fund. The state funds and incentives will go toward building a new facility in Independence Township as well as existing facilities.” – MLive, January 5, 2023

Outcomes, improvements, and practical impact

These expansions will allow Lear Corp. to meet increasing demand for EV components and expand its portfolio of products without needing to expand facilities outside of the United States and the Midwest:

• “Lear is planning to manufacture battery disconnect units and other vehicle electrification sub-systems for advanced batteries that will be supplied to automakers. The components control power transfer from a vehicle’s battery to its electrical systems, allowing EVs to charge faster and driver farther while delivering the higher performance requirements needed to power SUVs and light-duty trucks.” – Traverse Ticker, December 21, 2022
• “Michigan Economic Development Corp. officials said today that the incentives were crucial for Lear to expand in Michigan instead of existing facilities in Mexico and Texas.” – MiBiz, December 13, 2022
• Ray Scott, Lear Corp. president and CEO said that, “As a Michigan-headquartered company, it’s important to make this investment in our backyard as we continue to grow our portfolio of products for electric vehicles.” – Area Development, December 16, 2022

Climate impact 

The products that Lear Corp. produces improve the life and performance of EV batteries, which will make EVs both a highly desirable and environmentally sustainable form of transportation:

• “The Automotive News PACE Award-winning Lear BDU offers industry-leading thermal management innovations that enable electric vehicles to charge faster and drive farther. Lear’s BDU application also delivers the higher performance requirements needed to power larger electric vehicles – supporting GM’s electrification efforts in North America, where SUVs and light-duty trucks comprise most new vehicle sales. … ‘Lear is excited for the opportunity to provide technologies that will help enable a zero-emission future.’” – Lear Corp., October 27, 2022

Economic impact

The new facilities are expected to create hundreds of jobs and generate significant revenue for the Michigan-based company:

• “Lear first announced an $80 million expansion in October that executives said would exclusively supply General Motors with battery disconnect units for the automaker’s SUVs and trucks. Officials said at the time that the expansion, once completed, would generate $500 million in new revenue annually. … The new jobs created under the expansion will pay an average hourly wage of $20.30 plus benefits.” – MiBiz, December 13, 2022
• “The $112.5 million project is expected to create 500 jobs.” – Area Development, December 16, 2022

Official supporting statements

• Michigan Economic Development Corp. President and CEO Quentin Messer Jr.: “Whenever a company like Lear has operations elsewhere, you’re always in a pitch battle to make sure that when they’re making resource allocation decisions, those resources come to Michigan. … This is important because Lear has been here since 1917, and we can’t take for granted that if we don’t go out and earn it everyday, they’re going to be here for over another 100 years. We have to be flexible and see ourselves as partners to our existing companies and earn their business daily.” – MiBiz, December 13, 2022
• Traverse City Chamber of Commerce President and CEO Warren Call: “Lear Corporation is a longstanding and significant member of our regional manufacturing sector. … With the support of our community and the MEDC, this expansion will provide significant economic value to our regional economy and is an important next step in growing the segment of our workforce engaged in advanced and high-technology manufacturing.” – 9&10 News, December 21, 2022
• Traverse City Manager Marty Colburn: “We are pleased that our efforts and partnership with Traverse Connect has brought job growth to the Traverse City manufacturing sector. The growth of Lear Corporation in Traverse City is an exciting development that supports our goal of driving economic prosperity and quality of life for our citizens.” – Traverse Ticker, December 21, 2022

Selected clips

• “Lear Corporation to expand Traverse City facility” – UpNorthLive, December 27, 2022
• “More than 70 EV jobs expected in Traverse City’s Lear expansion” – MLive, January 5, 2023

• “Lear Corporation Set To Expand In Traverse City, Generate 79 New Manufacturing Jobs” – Traverse Ticker, December 21, 2022