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Plante Moran Cresa helps Navistar Defense evaluate its real estate strategy

April 6, 2014 Case Study 1 min read
Leading vehicle manufacturer Navistar's military division, Navistar Defense, wanted to evaluate whether its properties were strategically located for capitalizing on efficiency and synergies.

The challenge

Leading vehicle manufacturer Navistar’s military division, Navistar Defense, maintains multiple manufacturing facilities throughout the Midwest, including one location in Inkster, Michigan, and another in Sterling Heights, Michigan. Navistar wanted to evaluate whether its properties were strategically located for capitalizing on efficiency and synergies.

The solution

Navistar partnered with Plante Moran Cresa (PMC) to analyze the business offerings of various markets and arrive at a strategy that would enable efficiencies and growth.

The firm was leaning toward consolidating operations in the state of Illinois, but with this move, would relocate hundreds of Michigan workers who were expected to follow their jobs. To determine which location would be most strategic and cost-effect for the organization, Navistar sought the expertise of PMC to bring objectivity and analysis to the decision.

To assist Navistar in evaluating the real estate opportunities, PMC conducted market scorecards for the locations up for consideration, including Navistar's existing Sterling Heights site. In the scorecard process, PMC provided side-by-side comparisons and contrasts of the various markets’ demographics, industry synergies, and tax and government incentive programs among other criteria.

By evaluating the city of Sterling Heights with this process, PMC identified multiple advantages to Navistar maintaining a location in Sterling Heights, including government tax and grant programs and an in-market pool of highly qualified engineering talent. Additionally, PMC also provided data regarding competitors' presence — and growth — in the southeast Michigan region.

The benefit

The marketplace comparisons proved pivotal in Navistar’s decision to continue operations in Sterling Heights. The scorecard data, in combination with a seven-year, $3 million high-tech MEGA Grant from the Michigan Economic Development Corporation – for which PMC managed the application process – incentivized the firm to merge its separate locations into one master facility in Sterling Heights, bringing its staff and manufacturing under a single roof and maintaining its presence in the market.

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