Mayor Virg Bernero was in Italy, enjoying a home-cooked traditional American Thanksgiving dinner in the home of businessman Davide Canavesio, when he knew he sealed the deal.
It was more than three years in the making, and stemmed back to a friendship he cultivated with a different Italian businessman during a personal trip to his father’s home country following his loss in the 2010 gubernatorial election.
And it’s a story of how a government official’s trips overseas – which sometimes are criticized as unproductive – paid off in foreign investment in Michigan.
Details will be released publicly tonight during Bernero’s State of the City address. Canavesio and other business leaders will join the mayor in announcing that two Italian-based companies plan to open an office in the Lansing area next month, with hopes of expanding operations and hiring a combined 40 people in the next few years.
“It’s not 400 jobs, it’s not 1,000 jobs, it’s 40 over a couple years,” Bernero said. “But you can’t underestimate, these are key companies in Torino; Torino is the industrial capital of Italy … to have these guys give us a vote of confidence … it’s a great, great sign.”
Canavesio is CEO of Saet Group, a manufacturer of induction heat treating equipment based in Turin (Torino in Italian). He wants to expand his North American business beyond his design and manufacturing services located in Tennessee.
Saet will open a small sales and service office in the Lansing area next month with plans for a spare parts warehouse in the near future. The company eventually hopes to add retooling and maintenance functions along with full assembly to its Lansing operations, using some local suppliers, said Ray De Winkle, senior vice president of global business development at Lansing Economic Area Partnership (LEAP).
One Saet employee from Italy plans to move to Michigan later this year, and the company expects to hire 20 local employees within three years.
The connections made with Saet led another Turin-based firm, Satiz, to decide to open an office as well. Initially, Saet and Satiz will co-locate to save money. Satiz is a business communications firm that wants to expand its technical publishing business in North America. It plans to hire three employees soon, with the expectation of 20 workers within two years.
“It’s really the cork popping off the pipeline between Lansing and Italy,” De Winkle said.
Bernero hopes automotive suppliers and other Italian companies consider Lansing when looking to enter or expand into the North American market, especially given the Italy-Michigan connection with Fiat Chrysler Automobiles, the newly merged company from Auburn Hills-based Chrysler Group LLC and Italian-based Fiat SpA.
“(Italian companies) are considering North America, they’re already kind of making plans, many for Detroit or Chicago,” Bernero said. “We’re saying wait a minute; Lansing is right in the middle. Take a look at Lansing.”
Bernero sold Lansing as a medium-sized, manageable city with a small, yet globally connected airport. He touted Michigan State University’s resources and the close driving distance to Chicago and Detroit.
Lansing’s abundance of highly skilled workers, combined with a central location makes it an attractive place for businesses, said Tony Francavilla, plant manager for General Motors Co.’s two Lansing-area plants.
Francavilla, who was born in Italy, met with Saet officials when they came to Lansing. He spoke a little Italian with them, answered their questions about the area’s workforce, and bonded over his background in metallurgic engineering. He said the impact of Saet’s decision to locate here reaches beyond the direct jobs.
“When you bring in these types of companies to the region, it will certainly bring in more of that type of work,” Francavilla said.
While manufacturing opportunities are one reason Bernero is focusing on Italy, the other is personal. His father and maternal grandparents were born in Italy. He was in Italy for a family wedding in 2010 when he met with an Italian businessman who had previously expressed interest in the Lansing area. While that company hasn’t agreed to come to Lansing, the businessman has opened doors for Bernero.
“I’m playing the cards I’ve been dealt,” he said, “and it just so happens I think those cards are a winning hand right now.”
Bernero returned to Italy in November 2012 and again in November 2013, using a privately-funded City Administrative Account or 527 fund. He also hosted Saet’s Canavesio in Lansing, welcoming him with espresso and Roma Bakery treats, a meeting with MSU’s engineering dean, and a tour of the Accident Fund headquarters, given Canavesio’s interest in historical building restoration.
“I did what I do, shake hands and tell stories,” Bernero said, explaining that LEAP’s De Winkle provided the practical assistance, a “good one-two punch.”
LEAP provided business development resources, but at this point has not offered any tax breaks or other financial incentives.
“As they grow and as they get to those numbers, if there are programs that they qualify for, we’ll absolutely pursue those with them,” De Winkle said. “It’s not an incentive-driven decision, it’s market-driven decision.”
Representatives from Saet and Satiz were traveling and not available for comment on Wednesday. (Update: Saet’s Canavesio explains why he chose Lansing.)
In a presentation made in Turin last November on Lansing’s behalf, Saet officials noted that “Lansing’s support system has been outstanding, beginning with the passionate leadership of Mayor Virg Bernero, and the tireless support and deep connectivity of the LEAP staff helping us find and introducing us to the resources we need to be successful. It was clear from the very beginning that this was a community that cared about us and where we could find everything we needed to be successful.”