Milwaukee Tool picked Menomonee Falls over open capacity at its parent company’s South Carolina operations, according to a Wisconsin Economic Development Corp. staff review supporting tax incentives for the project.
The company also considered moving manufacturing operations for Imperial Blades to open capacity at Milwaukee Tool’s Jackson, Mississippi factory, potentially moving 65 jobs out of Sun Prairie.
In both cases, Milwaukee Tool told state officials their preference was for Wisconsin operations. In the case of Imperial Blades, executives did say “we can not discount the incentives that we have received from the State of Mississippi to expand our manufacturing footprint in their state,” according to the staff review.
Milwaukee Tool last week announced a $100 million expansion in Menomonee Falls and a $7.5 million expansion of Imperial Blades, which it acquired in late 2018.
“As we grow, it is important to do our due diligence and look at all options for expansion,” Ty Staviski, chief financial officer of Milwaukee Tool, said in a statement. “We are grateful for all the state and local authorities have done to help make staying in Wisconsin a financially viable decision.”
WEDC is supporting the latest expansion with up to $20 million in tax credits. Menomonee Falls is selling the company land valued at $3.7 million for $1 along with a tax incremental financing package.
It is not the first time Milwaukee Tool has considered other states for its expansions.
In 2016, the company was awarded up to $18 million in tax credits to build a 200,000-square-foot office building at its Brookfield campus and expand its Empire Level operations in Mukwonago. The staff review notes the Empire division “was at risk to be moved to Mississippi.”
In 2018, the company committed to another expansion in Brookfield with a 114,000-square-foot facility and a $32 million investment in exchange for another $8 million in tax credits. The staff review says the company was considering building a new facility on its Greenwood, Mississippi campus or the Brookfield expansion.
Despite repeatedly considering other states for its expansions, Milwaukee Tool has largely delivered on its job creation and capital investment commitments in Wisconsin. The company has created 568 jobs and invested $53 million through the end of 2018, qualifying it for $11.4 million in tax credits, according to WEDC records.
According to the staff review, Milwaukee Tool has been ahead of schedule on its job creation requirements.
The new tax credit award also escalates the number of jobs Milwaukee Tool will need to create in the coming years. Under the previous deal, the company needed 818 new jobs by the end of 2020. The new deal calls for 1,275 new jobs. The minimum to earn any tax credits went from 613 to 956.
Milwaukee Tool committed to creating 870 additional jobs in exchange for the new tax credits. The majority of those positions, 505 to be precise, will be in engineering with an average starting wage of $40.43 per hour, according to the staff review.
Another 115 positions with an average starting wage of $20.23 per hour would be in manufacturing while 102 positions starting at $47.25 per hour would be in marketing.
The rest of the positions would be support functions (68 jobs), operations (51 jobs), sales (21 jobs) and service (8 jobs).
Combined, the 870 new positions would have an average wage of $39.59 per hour.
Milwaukee Tool previously disclosed 770 of the jobs would be in Menomonee Falls while 100 would be in Sun Prairie.
Projections in the staff review call for 303 of the new positions to be created in 2019. Another 291 new positions would be created in the next three years, 2020 to 2022. The final 276 new jobs would be created during the last three years of the deal.
