Generac Ramp Up R&D Spending
Generac Power Systems have been steadily increasing their R&D spending over the past decade. The company spent $9.9 million on R&D in 2008 and by 2016, they were investing $37.5 million per annum. Aaron Jagdfeld, President and CEO said that investing in R&D would “quicken the pace of our product development cycles, which is critical to remaining at the forefront of the industries we serve.”
The company plans to invest $73 million in its Wisconsin headquarters and manufacturing facilities over the next five years in order to “realize efficiencies… that will drive continued innovation.” The funds will be used to expand corporate headquarters, production operations and research and development activities to advance Generac’s engineering and major product development. The improvements will allow prototypes to be made and tested more quickly.
It is expected that around 400 jobs will be created in Wisconsin by the project, adding to the current workforce of 2,000. The Wisconsin Economic Development Corp (WEDC) will support the project with up to $10 million in enterprise zone tax credits through to 2021. The tax credits awarded will depend on the number of jobs created, amount spent on training employees and capital spent on the expansion.
Mark Hogan, CEO of the WEDC commented that “In addition to the jobs created by this project, this expansion will enable Generac to usher in a new era of innovation and develop products to reach new markets and position the company for future growth.”
Generac manufacture power products including residential, commercial and industrial generators. Jagdfeld has stated the company is looking to diversify its product range and will focus on growing its natural gas business. Over recent years, the company has expanded through global acquisitions in Germany, Mexico and Italy.
The Wisconsin Credit for Increasing Research Expenses is available for companies undertaking eligible R&D activities, and can be reinvested into growing the business. If you would like to discuss R&D tax credits for your business, contact Swanson Reed R&D Tax Advisors today.