Mahindra eyes 2nd Michigan plant as part of bid for postal contract

Mahindra Automotive North America is considering three Michigan sites -- in Detroit, Oakland County and Genesee County -- to build a new assembly plant should the Indian automaker land a $6 billion contract to build next-generation delivery vehicles for the U.S. Postal Service, the company's CEO said.

The U.S. Postal Service has indicated it will decide this summer which company to award a contract to build 180,000 delivery vehicles over six years to replace its aging fleet of the Grumman LLV that have been synonymous with mail delivery since the 1980s.

Rick Haas, president and CEO of Mahindra Automotive North America, said the Postal Service contract could dictate the direction the company takes after just over a year after Mahindra began assembly of its first U.S.-built Roxor off-road vehicle at its new manufacturing plant in Auburn Hills, Mich., a Detroit suburb.

"If we get a piece of that or all of that contract, that opens a bunch of doors, shuts a few other ones," Haas said May 1 at a Troy Chamber of Commerce event. "If we don't get it, it shuts some doors, opens some other ones. So we're going to evaluate it all."

Haas told an audience of business executives and professionals that the automaker has six different products in development at the Mahindra North American Technical Center in Troy that could be paired with production of a postal service vehicle at a second manufacturing site.

"The question is which ones do you start to push," Haas said. "It's going to depend on what happens over the summer."

Haas declined to say which sites within Michigan the company is leaning toward. But he indicated they were all brownfield sites that need redevelopment.

Economic development officials from North Carolina, South Carolina, Arizona and Wisconsin have all approached Mahindra about building a plant in their states, Haas said.

"We'll probably have to announce a site this year," he said.

Mahindra's 150,000-square-foot factory in Auburn Hills is pumping out more than 30 Roxor off-road vehicles a day and the company plans to start assembling a Roxor with an automatic transmission in the coming weeks, Haas said.

The four-wheel-drive vehicle is not street legal.

Mahindra invested $22.3 million in a plant in Auburn Hills, Mich., for assembly of its Roxor vehicle. The company leased and renovated a former General Motors facility for a warehousing and parts distribution center.

Haas, who spent 27 years at Ford Motor Co. and did a two-year stint at Tesla Motors before joining Mahindra's executive ranks in 2011, said the automaker's factory site decision would be based on three main factors: "Ease of business, your personal loyalties and how much money are you going to make."

Building a factory in Arizona, Haas said, would be "a negative" for ease of business "because I'm flying people back-and-forth between sites that are hours apart."

"Personal loyalties? Yeah, I'd like to keep everything here," he said.