Auto parts maker to establish North America HQ in Salem

German auto parts manufacturer STS Group AG will establish its North American headquarters in Salem, a $32 million investment expected to create 119 jobs, Gov. Glenn Youngkin announced Thursday.

In April 2021, the company announced a greenfield project in Wythe County, but will now use an existing facility in Salem instead, “due to changing market conditions and rising construction costs for a new building,” according to a news release. The project would have been a $39 million investment creating 120 jobs.

More than 100 jobs will be created over the course of this year, a spokesperson told Virginia Business. The facility will be a high tech facility with automated machine production setup, so the company will need workers with good knowledge of automation, machine programming and robotics.

“When STS Group’s business needs changed, Virginia quickly pivoted to an alternate solution to ensure we retained the project in the commonwealth,” Youngkin said in a statement. “I am pleased that the former General Electric building in the city of Salem could meet the company’s needs, representing 119 new jobs for hardworking Virginians and a vacant facility’s return to productive use. Collaboration, innovation and solutions are Virginia trademarks, and we are proud to officially add STS Group to the commonwealth’s corporate roster.”

In Salem, STS Group North America will supply commercial truck assembly components for Volvo Trucks in Pulaski County and other truck and automotive facilities in the Midwest and Southeastern U.S. markets. The company will upfit 200,000 square feet of existing space and construct a 32,000-square-foot addition. It’s renting about half the existing space of the former GE facility, which allows for future growth, a spokesperson told Virginia Business. The company has already broken ground and is preparing for machine installation, and production will start in 2024.

The former GE Power facility stopped production in 2019. The facility at 1501 Roanoke Blvd. opened in 1955 and once employed 3,500 people, according to The Roanoke Times.

“We were all disappointed when General Electric left Salem a few years ago, and it is encouraging that STS Group will be filling the void at this very workable site,” Del. Joe McNamara said in a statement.

Headquartered in Germany, STS Group develops, manufactures and supplies products and solutions for components made of plastic or composite material for the automotive and trucking industries. The company has 12 plants in four countries on three continents with production facilities in Europe, China and the Americas.

“Salem is a perfect base for STS Group to start its footprint in the USA, following existing customers locally and extending the customer portfolio,” Alberto Buniato, CEO of STS Group, said in a statement. “On top of a perfect existing location in a suitable industrial cluster, we were delighted to find very attentive and helpful support from the city of Salem, Roanoke Regional Partnership and Virginia Economic Development Partnership.”

VEDP worked with the city of Salem and the Roanoke Regional Partnership to secure the project for Virginia. Youngkin approved a $500,000 grant from the Commonwealth’s Opportunity Fund to assist the city of Salem with the project. Support for STS Group’s job creation will be provided through VEDP’s Virginia Talent Accelerator program.

STS Group has more than 1,500 employees worldwide.