Grayling strives to blend jobs, bombs, beauty as munitions plant takes shape

• Saab will open a munitions assembly factory near Grayling in 2026, promising at least 70 jobs
• The deal is a rare boost to the northeast Lower Peninsula’s economy, which struggles more than other areas of the state with unemployment and lower-paying jobs 
• Concerns have been raised about the factory’s ties to the Camp Grayling National Guard, and whether it could signal more military-based jobs coming.

GRAYLING — This city alongside Interstate 75 is nicknamed “Gateway to the North,” thanks in part to being the home of the headwaters of both the Manistee and nationally renowned Au Sable rivers.

The area’s nature recently attracted more than tourism: It’s also one reason that the region’s newest manufacturer, Saab Inc. Land Systems Division, chose Grayling from sites in six other states for its $75 million munitions assembly factory now under construction amid towering pines.

The project, funded in part by about $4.1 million in a state grant and tax breaks, is expected to open next year and generate up to 200 new jobs in Michigan by 2030, the company said.

The deal brings a rare burst of new jobs to the northeast Lower Peninsula, an area of expansive natural space that’s also plagued by stagnant population and job creation.

In Grayling, many people say that the dozens of jobs Saab promises will help feed a year-round economy in a place that could otherwise straddle the line between tourist destination and pass-through to points farther north.

“We’re an outdoorsman’s paradise, and that’s what will always be No. 1 for us,” Lacey Stephan, Grayling Township supervisor, told Bridge. “It’s heaven on Earth up here.”

By the time Saab is open, the region can look to more than $16 million in new annual payroll from the munitions factory and other companies developing in the past decade, Stephan said. The largest was in 2017 when Arauco built a $400 million factory in the township, becoming one of the top employers (though starting wages are less than what Saab expects). 

Others in the community say they’re increasingly concerned about whether the factory addition could mean they’ll face increased risk from groundwater contamination — as they deal with ongoing PFAS mitigation — plus noise pollution or even more military-focused manufacturing.

The deal, they say, is an uneasy reminder that the region is home to Camp Grayling, the nation’s largest National Guard training facility, at a time when the state hopes to grow its base of military-related business. 

The Saab facility “is fitting into what we think is a pretty obvious plan to develop the military in this area,” Josh Greenberg, operator of Gates Au Sable Lodge and representative of the Anglers of the Au Sable, told Bridge Michigan. 

Greenberg recalled the hotly contested failed bid in 2022 to expand Camp Grayling, and noted that the training center is proposing to expand its airspace, which the Anglers are contesting in court. Protecting the Au Sable, he said, is the group’s ultimate goal. 

“We think other private-sector (military) interests are coming,” he said.

Roughly three-quarters of the area’s property is undevelopable, including national forest, state parks and property close to the rivers, said Matt McCauley, senior vice president of regional development for the Michigan Economic Development Corp., which aided Saab in its search and facilitated its subsidies.

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“Even though you’re in a resource-rich area and community, you’re limited in the specific parcels by which there’s the opportunity to develop,” McCauley told Bridge.

“So many things point back to the Au Sable,” he said. “That’s why I think that there’s so much passion and understanding that there needs to be alignment between how they wish to grow economically and how they wish to remain positive stewards of the environment.”

Choosing Grayling

The 70 jobs initially promised by Saab represent fewer than 1% of all jobs forecast in 2024 by companies awarded a combined $500 million in state economic development subsidies through the MEDC.

But in the northeast Lower Peninsula, the munition company’s job count presents nearly all of the positions that the state says it lured to the 11-county region that runs along I-75 from Roscommon north to the Mackinac Bridge and east to Lake Huron.

In those counties, home to cities including Alpena, Cheboygan, Oscoda and Houghton Lake besides Grayling, job growth is sparse. Among the 10 economic development regions in Michigan, this area is the smallest, with just about 60,000 workers. And it’s the oldest, with most counties topping a median age of 51.

The area also is home to the lowest median wage, at $20.20 per hour and some of the highest unemployment rates in the state.

Saab will pay $25-$30 per hour for production workers, said David Howie, lead project manager for the Grayling site. Other jobs will include engineers and management for the division, which will now make Michigan its corporate headquarters.

Construction is underway at the 60 acres Saab will use for its Grayling facility, positioned within the 360 acres the company bought from the state for $790,000. The price mirrors an appraisal done for the project in May 2024. 

Brad Barnard, vice president and general manager of Saab’s Land Systems Division, said Grayling was chosen because it met several criteria, including a large piece of land, a trainable workforce and support from the state.

The location played a role, he said. Saab needed a large space with enough acreage for setbacks due to the “energetics” — propellants and explosives — that it will acquire from suppliers to add to their assembly process. 

The hills and trees on the site and the rivers and trails nearby also appealed to the company, Barnard said.

“Sweden is a country of small towns populated by outdoorsmen,” Barnard said. “When you go there, you realize that when people go on vacation, they go to their lake house, or they go hunting or fishing, and it’s just like living in northern Michigan. “

The DNR land deal fulfilled a decades-long agreement to allow about 1,800 acres to be developed for industry, if the township agreed. That land moved to DNR control after tax foreclosures in the early 1900s. 

Earlier development deals included the Arauco particle board factory in 2017 and, this past January, Stoops Freightliner–Western Star, which will employ about 20 when it completes its new facility south of the Saab site.

“We have multiple inquiries every year about that property,”  Stephan, the township supervisor, said. About 400 acres remain for purchase. Very few potential buyers “make it through the scrutiny to be able to locate here.” 

Community concerns

Not all living nearby have been persuaded that this was the right decision for the area, particularly since public land was sold for the factory.

“The groups that have opposed further military activity up here are not opposed to military training,” said Martha Duby, a resident of nearby Lovells.  “It’s the expansion of the footprint and the expansion of that training to include private military industry testing that is the problem.”

She continued: “Our region’s already had enough damage from military activity, and we are still fighting for the cleanup of that damage, so I don’t understand why we’re inviting the risk for more.”

The Anglers of the Au Sable never publicly came out against the Saab factory, Greenberg said.

The group recognizes that new weapons are going to “end up in Camp Grayling, whether manufactured here or not, to get tested,” he said. 

But the group still wanted to review the state’s decision-making, and filed a lawsuit to get the MEDC to release 9,000 pages of documents sought under the state’s Freedom of Information Act. The group had waited 210 days for the information and some documents have been released since, Greenberg said.

The group constantly monitors regulatory changes that could result in restrictions to public use of the river and initiatives that could impact the fishing quality, which would be a sign of adverse environmental impact.

An issue for the anglers is that “the airspace they are going to be flying through is largely right above this river, and the weapons they are going to be testing are near the headwaters of this river,” Greenberg said. 

“I don’t see this as quite the potential windfall that Lansing sees it,” Greenberg said. “I just see it as a trade-off. You’re going to have less people wanting to come here if they don’t feel like they can drink the water, or it’s just not silent enough.”

Barnard, of Saab, said he welcomed the questions from the community.

“Everything that people have asked about the environmental impact is entirely legitimate (and) the right questions to be asked,” he said. “Especially when you consider the PFAS impacts that have taken place up there.”

Saab will be making two products in Grayling, the hand-held AT4 anti-armor weapon and a Ground Launched Small Diameter Bomb, developed in partnership with Boeing. 

The work will involve final assembly, Barnard said. 

“There are no hazardous materials that are part of our assembly process,” he added.

Capitalizing on the investment

Penny Podjaske-Pippo stood behind her cash register at The Curator store on a sunny summer day in July, expecting a big sales week spurred by the annual canoe marathon on the Au Sable that was to start in Grayling.

A shopper had just left, saying she was from Traverse City and usually didn’t stop on her drive through town.

“We get that a lot now,” said Podjaske-Pippo, who is married to Erich Podjaske, Grayling’s city manager.

Grayling, the Crawford County seat, and the immediate area has built its reputation from the Au Sable, which attracts anglers, higher-end waterfront homes and summer visitors who jam into Goodale’s for homemade doughnuts.

But the city is trying to bolster its year-round economy, something that’s struggled since the days when Fred Bear’s archery factory and the bountiful lumber industry kept downtown retail humming, and Chief Shoppenagon’s Hotel’s popular buffets built the community connection.

That faded by the 1990s, recalled Kate DeVries-McIsaac, co-owner of Tip’n the Mitten shop on Michigan Avenue in the core of downtown. 

“This was not a thriving community,” DeVries-McIsaac said as she named the downtown businesses that closed and the lack of family-sustaining jobs available to keep her peers nearby. 

Saab is building its factory about a decade after Paddle Hard Brewing opened downtown, a move that inspired DeVries-McIsaac, her wife and others to open businesses and launch the slow but steady turnaround.

Now Tip’n the Mitten is a year-round store, due to sales of fresh local meat and dairy. And other entrepreneurs, like Podjaske-Pippo, see the increase of people stopping in Gaylord. Her favorite example: bachelorette parties in the last couple of years are choosing to stay in Grayling over Traverse City. 

Even though some want to make sure visitors know they’re not complaining about now having to wait up to 30 minutes for a restaurant table because they’re proud of the turnaround, the degree of growth remains top of mind.

Gaylord, about a half-hour north, can keep the big box retailers and sprawling highway commercial district, they said. 

Grayling, in turn, has a lot to balance: Nature. Restoring what downtown lost. And not relying too much on seasonal, lower-paying jobs.

“We worked hard for legitimate year-round business,” DeVries-McIsaac said. “But as for making a living wage, this downtown will never be able to support that. So without factories that are willing to come buy space around us, … we would have to lose people.”

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