Spartan Motors to expand Pennsylvania plant to fill postal contract

Spartan Motors to expand Pennsylvania plant to fill postal contract

Tax breaks from Pennsylvania fund investment that could boost Spartan on East Coast.

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Cleveland, Ohio – Spartan Motors Inc. has won at least $678,000 in state tax breaks to expand its Ephrata, Pennsylvania, truck body plant, an expansion needed to service a $214 million award last year for new United States Postal Service (USPS) truck bodies.

"On the heels of our USPS truck body win, we needed to make a determination on where to manufacture those vehicles. Rather than build or buy a new facility elsewhere, we made the decision to re-invest in and revitalize our Ephrata location, placing the Utilimaster truck body plant here," said Spartan President and CEO Daryl Adams.

During a conference call with investors last year, Adams called the postal win important because it gives Spartan a reason to expand in Pennsylvania, an investment that could create more opportunities with commercial trucking companies.

”It provides a foundation to expand our truck body manufacturing footprint long enough to enter the commercial and retail markets on the East Coast utilizing our Ephrata, Pennsylvania, facility,” Adams said. “Prior to this USPS order, Spartan merely focused only on its existing fleet body customers. We'll use this expansion as a springboard into a very fragmented commercial and retail market… This expansion is key, as the states of New York and Pennsylvania represent 15% of the U.S. truck body market.”

The $214 million USPS contract calls for Spartan to build 2,000 cargo body vehicles for parcel delivery between 2018 and 2020. The postal could order more truck bodies by extending the contract a third year.

The Commonwealth of Pennsylvania extended $300,000 in Pennsylvania First Program (PFP) grants to be used toward the project. It also provided $378,000 in Job Creation Tax Credits (JCTC), based on the premium wages Spartan workers will earn. Additionally, Manufacturing Tax Credits (MTC) have been offered for the creation of these long-term full-time jobs.

About the author: Robert Schoenberger is the editor of Today's Motor Vehicles and a contributor to Today's Medical Developments and Aerospace Manufacturing and Design. He has written about the automotive industry for more than 18 years at The Plain Dealer in Cleveland, Ohio; The Courier-Journal in Louisville, Kentucky; and The Clarion-Ledger in Jackson, Mississippi.

rschoenberger@gie.net