New Tax Incentive Deal Will See GM Invest $3.5B In Michigan Over 10 Year Period1
General Motors and the state of Michigan have agreed upon a revised tax credit agreement that will see the automaker invest $3.5 billion in its various operations in the state over the next 10 years.
According to The Detroit Free Press, GM previously applied to amend its original 2009 tax credit agreement with the state of Michigan, which was first awarded to it amid the 2009 financial crisis. The automaker sought to have more flexibility with the jobs that it counts as tax credit subsidized positions, which it has now been awarded as part of the amended deal. Under it, GM will be able to count jobs in research, development and engineering under toward its tax credit requirements, along with certain jobs at its Renaissance Center headquarters in Detroit. It will still have to retain at least 34,750 jobs in Michigan to receive the tax break, but with more jobs counting towards that total, it will have more flexibility with regard to managing its Michigan employees. The agreement also stipulates that the automaker’s tax incentives will be cut by 75 percent if its workforce drops below 34,750, but above 27,875 employees.
In exchange, GM has agreed to invest $3.5 billion in its Michigan operations over the next 10 years. The money will be invested in a number of Michigan projects, including the Detroit-Hamtramck Assembly plant, where GM will soon begin building a series of large electric vehicles. The plant, which currently builds the soon-to-be-defunct Chevrolet Impala, employs about 800 people right now – but that number will grow to around 2,000 once it’s building GM’s new EVs and running at maximum capacity. The GM electric pickup truck, set to debut in the fall of 2021, will be built at the Hamtramck facility.
In addition, GM has agreed to a revised weekly minimum wage pay rate of $1,300 a week, which has been doubled from the previous $650 amount outlined in the original 2009 tax credit agreement. It has also committed to reducing the value of its credits from the current $2.6 billion to $2.27 billion by the end of 2029.
In a statement, GM spokesman Dan Flores said the new tax credit agreement “sets the stage for us to continue our significant commitment and investments in Michigan.”
“We appreciate our long-standing, productive collaboration with the state of Michigan and look forward to building on this important relationship,” Flores added.
Subscribe to GM Authority for more GM investment news, GM financial news and around-the-clock GM news coverage.
- Sweepstakes Of The Month: Win a 2023 Corvette Z06 Convertible. Details here.
Gotta love the “welfare state”