DETROIT — An auto supplier that opened to great fanfare five years ago in Southwest Detroit is almost certain to close.
Sakthi Automotive Group USA was the first new automotive parts supplier to open in Detroit in about a decade. The knuckle and steering arm supplier transformed a shuttered ArvinMeritor plant and planned to repurpose a 98-year-old former high school into a training center. It prioritized hiring Detroiters and also gave more than 200 parolees a second chance with employment.
The company even shifted 90 percent of its aluminum castings work to Detroit from overseas.
By 2020, Sakthi Automotive estimated, it would invest more than $100 million in the city. In turn, the state supported its expansion efforts with $5 million in grants, and Detroit waived property taxes and carved out a Renaissance Zone around the nearly 40-acre property to alleviate Sakthi from paying hardly any state or local taxes at all until 2031.
Sakthi Automotive emerged as a keystone to Detroit's manufacturing resurgence — garnering photo ops for executives with Mayor Mike Duggan and Michigan's then-Governor Rick Snyder.
But behind the scenes, Sakthi Automotive's owners were battling over control while operations stumbled and financials tanked to the tune of about $1 million in losses per week during the spring and summer of this year.
The result was a lawsuit filed by Huntington Bank in March, putting the company into receivership, and the loss of its largest customer, General Motors.
Sakthi Automotive likely will liquidate its assets and shutter operations in the coming months, barring the emergence of a buyer, according to documents filed this month in U.S. District Court in Detroit.
Representatives from Sakthi Automotive did not return phone calls on the matter. Representatives from Duggan's office did not make themselves available to discuss Sakthi Automotive.