New Braunfels: Continental Moving Automotive Unit from Seguin
Feature Photo (above): The Continental AG factory in Seguin. This site will be taken over by Vitesco Technologies and Continental will relocate its advanced driver assistance systems to New Braunfels. Image: Google Streets.
Originally Posted: 12-30-2019
by Adolfo Pesquera
New Braunfels (Comal County) — The Comal County Commissioners Court on Dec. 19 approved the executive of a Chapter 381 economic development agreement with Continental Automotive Systems Inc.
Their decision followed a Dec. 9 agreement by the city of New Braunfels to provide an incentive package to bring the Continental Automotive factory from Seguin to New Braunfels. Continental Automotive is a business unit of Continental AG, a German automotive manufacturing company based in Hanover.
For approximately one year, closed door negotiations have taken place between local Comal County officials, the Governor’s Office and Continental. The identity of the company was not known to the public as it was referred to in public documents only as Project Nautilus.
Preliminary site plan for the Continental Automotive Systems factory to be constructed in New Braunfels. Courtesy: City of New Braunfels.
New Braunfels City Council passed its incentive package with little discussion. However county staff told the Commissioners Court that this began as a retention effort to keep Continental from moving to Mexico, which was its initial intent. In that event, the region would have lost about 400 jobs.
The retention effort began as a project of the Governor’s Office, which brought the city and county into discussions. In October, Continental announced it would be spinning off is powertrain business unit, Vitesco Technologies.
The powertrain business will eventually take up residence in the Seguin factory, after Continental opens the New Braunfels plant. The Seguin-based manufacturing plant is a 320,000-square-foot facility that employs more than 1,500 people.
Continental is committed to constructing a 205,000 to 215,00-square-foot plant at a cost of $110 million. At full capacity, the plant will eventually employ 576 workers at a payroll of $27.9 million.
The county agreement is for a 47% tax abatement on property for a 10 year period.
Access to the plant will be from Kohlenburg Road, east of Interstate 35. It is located north of the regional Walmart and Sam’s Club distribution center.
The state contribution will be a $40 million reconstruction of Kohlenburg Road, to be financed by the Texas Department of Transportation. Currently, Kohlenburg is a two-lane rural road.
The more substantial local contribute came through the New Braunfels City Council. The council approved a $5.5 million package. It breaks down as follows:
The New Braunfels Economic Development Corporation is providing a grant not to exceed $3.3 million that Continental is using to acquire 48 acres south of Kohlenburg Road, between I-35 and FM 1101.
The New Braunfels EDC is providing $1.8 million, payable to New Braunfels Utilities, to bring sewer lines to the future plant.
The New Braunfels EDC is providing $270,000 to cover the cost of city permit fees.
The City of New Braunfels, through a separate Chapter 380 agreement, will contribute $300,000 as it local match toward the Kohlenburg Road improvements.
Because the city’s investment is up front, the city also required of Continental a $5 million letter of credit as insurance to safeguard its financial exposure.
The city’s agreements with Continental require that the company start construction on the new plan before Dec. 31, 2020, and it “shall commence operations” no later than March 31, 2022 and then continue operating the plant for at least 10 years.
Aerial view of the project site by Kohlenburg Road for the Continental Automotive Systems factory. Image: Google Earth.
Continental Automotive is based in Fort Mill, South Carolina. The company is a supplier of parts used to develop smart and driverless cars.
They manufacture advanced driver assistance systems (ADAS) such as ultrasonic sensors that are used to assist drivers with parking, and other related devices.
The demand for safety functions in vehicles has grown significantly in the last decade. This new facility will allow Continental to expand its R&D and manufacturing capabilities to meet the growing demands of customers, while continuing to drive innovation and development of automotive safety technology, helping to support the company’s goal of Vision Zero.
Adolfo Pesquera (Reporter/Editor) is a veteran news journalist. He has worked for Hearst Corp., American Lawyer Media, News Corp and Freedom Communications. His work has been published in newspapers and magazines across the USA. He is a journalism graduate of UT-RGV. He writes, edits and creates digital pages for VBX.