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Yutaka packs financial punch
Company expected to pay out $12.9M in hourly payroll during next three years
According to an economic-impact study conducted by the Cullman Economic Development Agency, Cullman’s newest industrial plant, Yutaka Technologies, will pay out an estimated $12.9 million in hourly payroll over the next three years locally.
The estimates do not include payroll for salaried employees.
The study, which was conducted by CEDA during the city’s courtship of Yutaka in late 2006, was released to The Times Tuesday. Portions of the report suggest the plant’s location in Cullman will have a hefty impact on local economics for decades.
“Every dollar that this plant puts out will turn over in the community multiple times,” said CEDA director Peggy Smith. “It breaks down into the smallest things you can possible get into.”
According to the study, Yutaka is expected to create about 80 local jobs in 2007, not including the workers who will help build the plant. That number is expected to increase to 130 by 2008, topping out at a full 200 in 2009.
At its estimated peak, annual, hourly payroll will run an estimated $5.5 million, not including salaried workers.
The study also estimates the plant will indirectly create about 40 peripheral jobs in the Cullman area over the next three years. That estimate is based on increased spending at local businesses as a direct result of the plant’s new jobs.
At full employment, the plant’s impact is expected to increase revenues for local retail and service businesses by an estimated $1.7 million a year, leading to an additional $150,000 a year in extra sales-tax revenue.
According Dale Greer, assistant CEDA director, Yutaka will significantly increase local tax revenues, despite a 10-year abatement in certain property taxes and a temporary abatement in some sales taxes during the plant’s construction phase.
While the Cullman City Council approved the abatements in January, the exemption does not include education taxes.
Thus, over the next 10 years, Yutaka is expected to pay at least $2 million in property taxes — mostly for education. It is also expected to pay about $400,000 in sales taxes for education while its 166,000-square-foot, $50 million plant is being constructed over the next several months.
“This idea that these plants send all their money other places isn’t true,” Greer said. “This money is being paid here in Cullman, Alabama.”
Greer also pointed out the general contractor building the plant is utilizing services of several local subcontractors, including earth movers and steel fabricators.
“We are in a state where the bulk of our revenue comes from sales tax, income tax and property tax,” he said. “Now, what do you think a plant like this do for us?”
Ohio-based Yutaka Technologies is a Japanese-founded company that manufactures exhaust and brake components for Honda Motor Company.
Locating its new plant — to be called Alabama Cullman Yutaka Technologies — in Cullman Industrial Park No. 5, it is expected to begin production in November.
According to Yutaka President and CEO Masaru Takabayashi, Cullman was selected as the location for the company’s new plant due to its proximity to the interstate, its existing infrastructure, its economic-development program and its high-quality work force.
“I have no doubt we will be able to hire a quality work force here in Cullman,” Takabayashi said during the company’s announcement ceremony this past week.
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