Romeo embraced its Ford engine plant. After closure, an uncertain future

• Ford Motor Co. closed its engine plant in Romeo at the end of 2022, leaving questions about what’s next for the property
• Community leaders mobilized when the closing was announced in 2019, planning to find a new company to invest in the site
• Local officials say they hope to capitalize on southeast Michigan’s hot industrial market

ROMEO — Just a few months ago, the massive Ford Motor Co. factory was the largest employer in this historic village of 3,800 people in northern Macomb County. 

But Ford halted engine production in December, leaving the 2.2-million-square-foot factory on 32 Mile Road largely vacant.  

A few weeks after the Romeo plant closed, Ford announced plans to build a $3.5 billion electric vehicle battery plant about 135 miles to the southwest in Marshall. 

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The contrast between the automaker’s closing of one facility and announcing plans to open another reflects the industry’s transition toward new electric vehicle technology that will ultimately reduce the need for legacy plants like the one in Romeo. 

The likelihood that more of Michigan’s older plants will be shuttered as EVs take hold leaves economic developers looking for how they can streamline how long a facility sits — and longtime factory communities wondering if they will be next.

“We suspect there will be a few more” closures, said Maureen Krauss, president and CEO of the Detroit Regional Partnership, an economic development organization in southeast Michigan focused on marketing property to national and international site selectors.

In Romeo, strategizing about the now-vacant factory’s future began in 2019, Krauss said, when Ford decided it would close the engine plant and divert the work elsewhere.  

Since then, a group that includes village and county officials and economic developers have been meeting to study the industrial real estate market and think about how to give the 270-acre site an edge in marketing it to a new user.

“This is devastating” to the community, said Vicki Rowinski, director of the Macomb County Department of Planning & Economic Development. The factory was the town’s hub, and the roughly 600 workers still at the plant when it closed have been moved to other Ford sites as the village considers implications to the tax base.

But, she added, “we're not going to let this property sit for very long.”

The Romeo closing comes at a unique time: Michigan is vying with other states for $1.2 trillion in new EV investment through 2030 as auto manufacturers and their suppliers make massive shifts in their product lines to support increased EV production.

And in southeast Michigan, industrial property is at a premium: At year-end 2022, industrial availability dropped to 2.5 percent, according to CBRE commercial real estate firm, continuing a five-year run of extremely low vacancy on buildings for everything from warehouses to advanced manufacturing.

The market demand is driving the county and its partners — including the Detroit Regional Chamber of Commerce and the Detroit Regional Partnership — to urge Ford to quickly assess the property and put it on the market.

Ford would not comment for this report. But the company is participating in the meetings and told others it’s in the early stages of decommissioning the factory and plans to leave the land free of contamination. Ford has yet to reveal, however, its ultimate plans for the property, including whether it will demolish the old factory.

Once the land is cleaned up, Krauss and Rowinski said, it’s likely it will be publicly listed for sale.

Until then,“It’s a waiting game,” Rowinski said, “but we do have some ideas.”

Feeling the cold shoulder

Romeo is a small town where the community has appreciated Ford as an employer and contributor to local causes — like the most recent Village Park renovations, said Meagan Poznanski, the village president. 

“They never said no,” she told Bridge Michigan about requests to support Romeo.

But the closure happening as Ford was preparing to announce development of a $3.5 billion battery factory elsewhere stung the several residents and workers who called her office, Poznanski said. 

“You felt the cold shoulder,” she said. 

In looking elsewhere for its new factory, Ford sought a larger site that could allow long, linear production and a campus-like setting where its buildings and related businesses could be built, Rowinsky said. The automaker considered Romeo, but decided that the property wasn’t large enough for both of its goals.

“The viability of our site versus that site, there’s no comparison,” she acknowledged. “At the same time, we need to … congratulate our neighbors and not bemoan our situation.”

But the relentless search for new industrial properties in a state with many aging and closed factory sites is a rising concern among legislators, who are raising questions about whether the wave of greenfield development for new battery factories is the best strategy for Michigan.

Like many of Michigan’s small towns, open fields surround a few historic blocks in Romeo’s village center, where coffee stops and antique shops fill buildings with high tin ceilings and exposed brick walls. 

The former tractor factory became an engine plant in 1990, when it employed its peak of about 1,800 Ford workers. Twenty years later, about half that number produced an engine every 26 seconds for F150 trucks, Mustangs, Explorers and a supercharged V8 version for the GT500.

The Romeo factory survived Ford’s 2006 cutbacks, when it closed 14 factories — including its assembly plant in Oakland County’s Wixom — to cut costs amid falling market share. (The automaker’s 22.6 percent share of the U.S. auto market in 2000 had shrunk to 16 percent by 2006.) 

Ford’s 2017 announcement that it would spend $150 million in Romeo to add 130 jobs and engines for the Ranger and Bronco suggested the factory had a long future, but that changed by 2019’s labor contract, when Ford was in the midst of a turnround plan and was committing to producing more EVs.

Employment in Romeo was about 600 at closure, Poznanski said. All of the workers were offered jobs at another Ford facility, some nearby in Sterling Heights, some driving farther to Dearborn or beyond.

That made the closing less difficult, she said, though it changed commuting patterns for workers in the village and family life. Some workers’ parents also worked at the factory, she said, so the loss was part of the village’s and families’ histories. So far, she said, few local businesses report significant losses, something she is grateful for.

The property is in a district that will allow tax incentives, Poznanski said. However, Ford wasn’t receiving a tax break at the time it closed, she said. The company paid about $150,000 in annual village taxes for its main parcel among several around the plant, and other village revenue — such as municipal water sales — also will be affected by the closure.

Poznanski said Romeo will be able to function without the factory’s tax revenue for a few years, due to recent expansions in the industrial district that border the factory, including advanced manufacturer L&L Products Inc., and she’s hopeful for a fast resolution on the property’s fate so budget cuts won’t be a next step.

Soon to market?

The factory site’s proximity to Macomb County’s automotive hub and population center should give it an edge, Rowinski said. Utility service and nearby roads already service it, too, making it possible to cut redevelopment time for a new business to move there. 

While a single manufacturer could use the property, it also could be a multi-tenant development site, she said, like the property that housed the General Motors’ Warren Transmission plant until it closed in 2019. Today, heavy equipment is on the Mound Road site in Warren, with workers building a 1.4 million square foot industrial center for new owner NorthPoint Development, a Kansas City-based industrial redeveloper that also bought the former Eastland Mall in Harper Woods. 

“The community wants to see that property remain industrial,” Macomb County’s Rowinski said of Romeo.

Macomb is targeting several areas for industrial properties, all of which play a role in newer high-tech manufacturing, Rowinski said, including aerospace and defense, along with automotive. 

The committee’s three years of meetings, Krauss said, mean the community can prepare for the property’s future “and not wait for the for-sale sign on it.”

While Ford is setting its own pace on the property’s future, the automaker may be willing to consider offers sooner if the task force’s marketing results in interest. 

“Ford is willing to have the conversations as long as they’re well-suited potential prospects," Rowinski said.

When it comes to redevelopment, said Poznanski, the village president, “our time will come.”