Manufacturer leaving town amid tax abatement concerns

Elected officials say Voestalpine Rotec, a manufacturer located at 3709 U.S. 52 in Lafayette, failed to uphold its end of a $4 million tax abatement deal.

Posted: Jun 8, 2021 1:58 PM
Updated: Jun 9, 2021 9:58 AM

TIPPECANOE COUNTY, Ind. (WLFI) — Elected officials say Voestalpine Rotec, a manufacturer located at 3709 U.S. 52 in Lafayette, failed to uphold its end of a $4 million tax abatement deal.

The manufacturer also recently announced plans to close its Lafayette plant and lay off its employees.

Tippecanoe County Council members say the company missed several benchmarks as part of the seven-year tax abatement, which was approved in 2014.

County Councilor Ben Murray (D-District 1) says the manufacturer should have grown to 120 employees by this year but only employs 72 people.

As News 18 previously reported, Voestalpine Rotec used the tax breaks on machinery to build suspension systems for high-end electric vehicles.

"Their part of the deal was they would be compliant ... they would increase employees, pay an average wage that is comparable to the local community and continue to invest here locally," Murray says.

The abatement didn't have a "claw back clause" allowing the county to recoup the money, Murray says. Instead, a complicated and costly legal process would ensue.

"It would probably cost more money than what it would be to get back ... because that resolution didn't have a 'claw back clause,' there wasn't a whole lot of recourse from a financial component that we could do," Murray says.

But the bad news doesn't stop there.

"I reached out to Scott Walker yesterday -- CEO of Greater Lafayette Commerce -- and said, 'Hey, what's going on?' to get some background information and he said that they are in fact leaving the community and the reason being is due to tariffs," Murray says.

News 18 reached out to Walker but hasn't heard back.

But a letter to the State of Indiana confirms the company is terminating its Lafayette operations due to "unforeseen business circumstances of the COVID-19 pandemic."

The company is also preparing to lay off at least 70 employees in stages beginning July 15.

"I'm saddened that they are unable to continue business here," Murray says.

News 18 reached out to Voestalpine Rotec but hasn't heard back.

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