Iowa officials approve $1.1 million for Italian auto parts maker in Akeny

Tyler Jett, Des Moines Register
·3 min read
A U.S. subsidiary of Italian auto parts manufacturer SPAL will invest $35 million in a new 215,000 square-foot office and manufacturing facility in Ankeny.
A U.S. subsidiary of Italian auto parts manufacturer SPAL will invest $35 million in a new 215,000 square-foot office and manufacturing facility in Ankeny.

State officials agreed Friday to give an Italian auto parts maker $1.1 million in incentives for its new Ankeny complex, boosting total public investment to nearly $4 million.

The Iowa Economic Development Authority board approved a $200,000 forgivable loan and $930,000 in tax credits and rebates for SPAL USA, which makes fans and fluid pumps for vehicles. The company, which already operates a warehouse and sales office in Ankeny, will build a new U.S. headquarters and factory in the Des Moines suburb.

The IEDA's vote follows the Ankeny City Council's May 1 decision to provide about $2.7 million in local incentives for the company. SPAL USA, a subsidiary of Correggio, Italy-based SPAL Automotive, plans to hire 39 new employees, bringing its total local headcount to 75. In their contract with the state, SPAL USA officials promised to pay at least $33.31 an hour to 15 of those new workers.

Pandemic disruptions show need for U.S. manufacturing

The company currently ships fans from Italy to the Ankeny warehouse. Tom Phillips, a former SPAL USA president who is consulting with the company on the expansion, said Friday that SPAL Automotive leaders had eyed a U.S. factory for "quite seriously" for seven years.

He said the company finally pulled the trigger on the project as many manufacturers struggled to ship products across international borders in the last few years. Amid a trade war during President Donald Trump's administration, SPAL Automotive built a factory in China to supply manufacturers in that country.

Then, as Asian factories remained closed during the COVID-19 pandemic, consumers and manufacturers couldn't get enough parts and products from other countries. The experience has motivated some U.S. companies to keep domestic factories open or add operations in the United States.

A U.S. subsidiary of Italian auto parts manufacturer SPAL will invest $35 million in a new 215,000 square-foot office and manufacturing facility in Ankeny.
A U.S. subsidiary of Italian auto parts manufacturer SPAL will invest $35 million in a new 215,000 square-foot office and manufacturing facility in Ankeny.

Phillips said the international supply difficulties convinced SPAL Automotive executives that they would have customers in the United States for products made in the country. He said the factory needs to produce about 1 million fans a year for executives to consider the investment successful.

“We had to make sure that production isn't all moving to Asia or production isn’t all moving to South America," Phillips said Friday. "Fortunately, for us, with the reshoring from the pandemic, it really just made sense. We needed to be here. There’s too much risk in the supply chain. It’s been just a really challenging last four years or so, and I don’t see it changing any time in the near future."

New facilities expected to expand even more

SPAL USA, which employs 36 workers at its 1731 Oralabor Road location, will move current employees to the new site when builders finish construction. Phillips said SPAL USA will then look to sell that property.

Set to open in 2025, the new building, with about 215,000 square feet of floor space, will be more than five times the size of the current one and, according to the IEDA, will cost the company about $34 million. SPAL USA officials aim to eventually expand the factory, bringing the total space to about 350,000 square feet.

Phillips said the expansion will help fulfill orders under a new contract with an unnamed "major U.S. auto manufacturer." But officials also hope to build fans in Ankeny for other products, such as construction machines, farm implements and power sports vehicles.

"To be successful," Phillips said, "we have to expand."

SPAL USA's central Iowa roots date to the 1980s, when local business titan John Ruan Sr. formed Iowa Export-Import to encourage international trade in the state. After an Iowa Export-Import representative convinced SPAL Automotive to sell its parts to U.S. car companies, Ruan's business became the manufacturer's U.S. distributor.

SPAL Automotive ultimately put its own stake in the ground, opening the Ankeny warehouse and sales center in 2004.

“What we're doing as a community and the climate we've created for business growth is working," Ankeny Economic Development Director Derek Lord told the Des Moines Register after the City Council's vote.

Tyler Jett is an investigative reporter for the Des Moines Register. Reach him at tjett@registermedia.com, 515-284-8215, or on Twitter at @LetsJett. He also accepts encrypted messages at tjett@proton.me.

This article originally appeared on Des Moines Register: SPAL USA to receive $1.1 million from Iowa for Ankeny offices, plant