machinery tools taxes - legislative...
TRANSCRIPT
© STIHL INCORPORATED
STIHL Inc.Virginia Manufacturing Development / Small Business Commissions
Carter Barrett
Manager of Financial Accounting
June 14th, 2013
Industry View on Machinery and Tools Taxes for Investment Decisions
© STIHL INCORPORATED
STIHL Group International Footprint
North America:
S
M
South America:
S
M
Europe:
SM
Asia:
S
M
Oceania:
S
Africa:S
Sales Subsidiaries =
Manufacturing Subsidiaries =
SM
6 Manufacturing Countries
© STIHL Inc. 3< >
STIHL Distribution Structure
Manufacturing Companies (DE, US, CH, BR, AT, CN)
Marketing Companies (32)Importers (120)
Retailers (40,000 servicing
dealers)
End User
© STIHL Inc. 4< >
SNW
PASIMS
BME
NES
CRA
SSE
BES
MWS
MVS
MAS
Oregon
Nevada
Idaho
Montana
Wyoming
Utah
ArizonaNew Mexico
Colorado
Texas
Oklahoma
Kansas
Nebraska
South Dakota
North Dakota
Minnesota
Wisconsin
Upper Michigan
Lower Michigan
Ohio
KentuckyVirginia
Tennessee
AlabamaGeorgia
Florida
South Carolina
North Carolina
Arkansas
Missouri
Delaware
Connecticut
New Jersey
Massachusetts
Maryland
New York
Pennsylvania
MaineNew Hampshire
Vermont
Rhode Island
Iowa
SSW
Louisiana
STIHL Inc., Virginia Beach
Map of STIHL Inc. Distribution
Company OwnedNES – Northeast STIHLSNW – STIHL NorthwestPAS – Pacific STIHLMAS – Mid-Atlantic STIHLIMS – Intermountain STIHLMVS – Mississippi Valley STIHL
Independently OwnedBES – Bryan EquipmentBME – Blue MountainCRA – Crader DistributingMWS – Midwest STIHLSSE – STIHL SoutheastSSW – STIHL Southwest
© STIHL Inc. 5< >
In Virginia Beach, what started like this…
Innovation is our Tradition
© STIHL Inc. 6< >
015 L
… and this
© STIHL Inc. 7< >
…has become a World Class Manufacturing Facility…
© STIHL Inc. 8< >
…. like that
North
Main Campus
Finished Goods Warehouse2525 International
Guide Bar Plant
MilcomBuilding
Avenger Building
Raw Materials Warehouse
Plant 1
Plant 2
Lillian Vernon Building
AdminBuilding
HermesBuilding
Accessories Plant
Finished Goods Warehouse601 Central Size: 2.2 Mil sf
Land: 151 Acres
1,900 Employees
Health & Wellness Center
Virginia Beach Site
© STIHL Inc. 9< >
Buildings (incl. Branches) 2.4 Mil. sf
Land 179 acres
Employment 2,100
Annual Sales > $ 1 Billion
STIHL Inc. USA – 2012 Statistics
Number of Models 250+
© STIHL Inc. 10< >
Core Manufacturing Areas
InjectionMoldingBlowMoldingExtrusion
Chain Saws
Power Tools
Accessories
PolymerProcessingAssembly Machining
Crankshaft
Piston
▪Laminated
▪Lightweight
Guide Bar
© STIHL Inc. 11< >
Assembly
© STIHL Inc. 12< >
Injection Molding
© STIHL Inc. 13< >
Piston Manufacturing
Pistons machined and assembled2/3 of all STIHL pistons are produced in USA.
© STIHL Inc. 14< >
Guide Bars: Built in America
Most Automated Guide Bar Facility in the World
Automated Stamping, Welding, Assembly, Painting and Packaging of Guide Bars
22 different types
© STIHL Inc. 15< >MFG Engineering 11.06.2013
12011297
55
89
1 3
1836
40
79
104
0102030405060708090
100110120
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Automation 2002 - 2013
Number of Robots at STIHL Inc.
© STIHL Inc. 16< >
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STIHL Inc., USA - Production 1974 - 2012
Production since inception50 Million Units
© STIHL Inc. 17< >
Built in America
© STIHL Inc. 18< >
Worldwide Units Production
Compete with STIHL affiliates and suppliers around the globe to produce at the best value while maintaining quality.
© STIHL INCORPORATED
STIHL Inc. Examples of Manufacturing and Cost Control
Labor Costs Material Costs Indirect Material Supplies Overhead Costs Investments
Tax Burden Federal and State Income Tax Sales and Use Tax
Manufacturing Exemption in Virginia Business Personal Property Real Estate Tax
Foreign Exchange
Controllable Costs Uncontrollable Costs
© STIHL INCORPORATED
U.S. Tax Environment
The overall U.S. tax environment U.S. one of the highest income tax rates
Taxes have a significant impact on the costs of production and directly impacts STIHL Inc.’s ability to compete for investment against our affiliates 3rd parties
Tax reform’s hot topic Can the United States compete in a global economy?
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© STIHL INCORPORATED
STIHL Inc. Manufacturing Automation has been a key component in making STIHL Inc.
competitive worldwide.
Helps level the playing field with countries with lower labor rates.
Ensures repetitive tasks are completed to specifications and improves ergonomics for employees.
Employment at STIHL Inc. has continually grown with automation.
No regular employee has lost a job due to automation.
Has enabled us to continue to grow and provide more higher skilled jobs.
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© STIHL INCORPORATED
Machinery and Tool Tax
Machinery and Tool Tax makes automation more costly City of Virginia Beach has always had a relatively low M&T tax
rate, which assisted with the ROI on automation over the years.
A Forever Tax
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Cost - 1980$250,000
Appraised Value @ 33%
$82,500
VA Beach Tax@ 1%
$825 annually
Other Localities@ 3%
$2,475 annually
23 Years of Tax$18,975
23 Years of Tax$56,925
© STIHL INCORPORATED
Virginia Beach doing something
In 2012, Virginia Beach repealed the M&T tax, further helping manufacturers compete internationally.
Tax dollar savings Reporting of assets still required
Every new investment competes against other STIHL manufacturers and suppliers worldwide
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Cost - 1980$250,000
Appraised Value @ 33%
$82,500
VA Beach Tax@ 0%
$0 annually
© STIHL INCORPORATED
Conclusion
When competing for production, cents per unit can make all the difference.
Virginia Beach is doing something about it.
Thank you for your time.
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*A majority of STIHL products are built in the United States from domestic and foreign parts and components. "Number one selling brand" is based on syndicated Irwin Broh Research as well as independent consumer research of 2009-2012 U.S. sales and market share data for the gasoline-powered handheld outdoor power equipment category combined sales to consumers and commercial landscapers.
*