Communities encourage economic development with auto plants for over 100 years

Why do communities encourage economic development from companies like automotive manufacturers?

Many people think community economic development is a recent phenomenon. That is not necessarily the case in Indiana. In 1907 – 1912, five Indiana communities, Anderson, Connersville, Decatur, Muncie, and North Manchester, encouraged auto makers to move there to boost area economics from the growth in auto manufacturing.

Anderson, in an effort to encourage outside industry to relocate there, initiated a booster movement. The movement raised over $300,000 to offer lower taxes and favorable rent payments as incentives. The DeTamble Motor Company moved from Indianapolis and operated until 1912, and Rider Lewis Motor Company moved from Muncie and was sold to another auto firm in 1911. While these particular businesses may not exist today,
Anderson was known as a leading producer of vehicular lighting and automotive bumper systems.

A group of industrialists in Connersville were concerned that too many of their companies were tied up in buggy and carriage building. They could see this field giving way to the automobile. In 1910, they encouraged a group of investors to purchase the Lexington Motor Company and relocate it to the McFarlan industrial park on the north side of town. Lexington was one of a number of automotive firms in the park and enjoyed success for several years. In 1928, E.L. Cord purchased the Lexington Motor Company, Ansted Engineering Company, and the Central Manufacturing Company buildings to expand the production of his Auburn Automobile Company. Automotive production continued in these buildings until 1948. Today automotive component production still exists in or near the McFarlan industrial park.

In late 1907, the Decatur Commercial Club lured the Coppock Motor Company from Marion with an offer of monetary support. The firm was reorganized as the Decatur
Motor Car Company. When its Decatur factory proved inadequate to meet the demand of
its truck production, the company accepted an offer of $100,000 from the city of Grand Rapids, Michigan to move its plant to that town. Motor home production and van-conversion are part of the automotive business in the area today.

Large-scale automobile manufacturing started in Muncie in 1908 thanks to the efforts of the Commercial Club of Muncie (forerunner of the Chamber of Commerce). A group spearheaded by the five Ball brothers – George A., Frank C., William C., Edmund F. and Dr. Lucius L. – along J.M. Marling and Tom Hart formed the Interstate Motor Company. The Interstate put Muncie on the auto-maker’s map staying in production until 1918. William C. Durant, past president and founder of General Motors took over the facility in 1921 to form Durant Motors, Inc. Muncie was known for auto transmissions produced at the New Venture Gear and Warner Gear facilities.

Community leaders in North Manchester developed a campaign to attract an auto factory. The North Manchester Industrial Association agreed to provide a lot valued at $600 and provide $1,500 to Mr. Virgil L. DeWitt. The first DeWitt rolled out of the new factory in April 1909. A little over a year later the DeWitt factory burned to the ground. Now automotive wiring is produced at the United Technologies’ North Manchester plant.

Economic development incentives to potential auto manufacturers have been used by communities for over 100 years. The recent use of these incentives has proven beneficial to communities like Princeton, Indiana. Toyota doubled its manufacturing presence at their North American Truck Plant in Princeton. In late 2008, Honda will open their auto assembly plant in Greensburg, Indiana. This plant will spawn development of supplier facilities across southern Indiana and Ohio.

According to a study by Indiana Department of Workforce Development, Indiana’s employment in the automobile manufacturing industry grew 53 percent, between 1997 and 2006. This growth has been largely fueled by the addition of non-domestic auto makers to the mix, including Subaru, Toyota, and Honda. Toyota’s collaboration with Subaru in Lafayette added 1,000 jobs in 2007. Honda’s Greensburg plant will add about 2,000 jobs when it is fully operational.

Back to: Cars-Companies, & Communities in Indiana automotive history

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