The city council in Lansing, Michigan has unanimously approved a tax exemption for General Motors, which has proposed plans to build a new $2.5 million Ultium battery cell plant in the region, according to The Detroit News.
The approval comes a week after Lansing city council passed a resolution deeming the plot of land where the Ultium battery plant will be built a so-called renaissance zone, which exempts the property from city taxes.
Additionally, Michigan Governor Gretchen Whitmer this week passed a $1.48 billion spending plan intended to attract new economic development. Whitmer said on Monday that the money will be used to grant tax-exempt status to the GM battery plant and to help attract three other major economic projects to the state. She also passed an $813 million emergency relief fund this week to help combat the lasting effects of the COVID-19 pandemic.
Digital rendering of a GM Ultium plant
The GM Lansing battery plant, if it goes ahead, will be built and operated by the automaker’s joint venture with LG Energy Solution, Ultium Cells LLC. The plant will produce battery cells for use in its future battery-electric vehicles and supply the automaker’s Michigan electric vehicle plants, such as the newly renovated Factory Zero facility in nearby Detroit-Hamtramck. GM said previously the plant would create roughly 750 full-time jobs when completed at the end of 2025 and up to 1,700 people once it reaches full production capacity before the end of the decade.
The automaker has also floated the possibility of investing $160 million in its Lake Orion Assembly plant in Michigan to construct a new battery module production line there. This plant, which would be separate from the Lansing battery plant, would take cells and pack them into battery modules before the packs are installed into production vehicles at GM plants. A GM spokesperson said earlier this month the automaker “is in the early stages of developing a business case for a potential future investment that could be located at several locations, including the Orion Township area.”
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Comments
Great news for Lansing, and GM, hopefully construction can start next summer.
When they build this plant where will they get the precis metals from? I’m hopping not China. They already hold to much over us. I’m sure somebody know already.
GM working to build a US supply chain for materials and processing, but as it is now, many of the materials are processed in China, because China invested in the infrastructure earlier. Steel and Aluminum, electronics, China is currently supplying a big portion. Do some supply chain homework and see where these materials are mined, and processed, so you actually have a clue what you are talking about. GM is the first OEM bringing the battery Cathode processing into the USA, currently none of the EV companies do this stateside. This will take decades to build out and scale up. It’s like a new industrial revolution, but now we have to be careful and protect the planet in the process.
Thanks, I can always get help with my question.
Remember when GM and most of the other US manufacturers sent the jobs overseas, to begin with, and now of course the material will come from overseas as US manufacturing has been gutted in lieu of cheaper wages and materials.
I recently completed construction in 2019 in the Kingdom of Bahrain on the Alba Aluminum Smelter with this addition made Alba the largest smelter in the world and none of the material, design, controls, wiring, smelting pots, steel, etc came from the USA. All of it was manufactured in the Middle East, China, and other Asian countries. The world does not need US manufacturing the US needs the world.
The US will need to hurry up as Biden wants EVs for most of the population by 2035 and John Kerry informed the world that ocean ships need to be electric by 2050 so if they plan on doing any of the work by US manufacturers in the US they had better get moving.
I read that the battery plant being built near Lansing MI, where it will employ 1,700 HI-TECH workers, what a joke most of the jobs will be robotic and the workers will only be assembling items.
Is it possible to stop giving tax breaks and incentives to big corporations?
Doubt it. Kind of the going rate too! 2.5B/1700 max employees is 1.5M/employee. So even making 100K/yr it will take 15 years to pay out in wages the tax break. Worse, the 1700 is the max employee count. Initial is only 750. Too depressing to calculate the net cost per employee. I read an article where Michigan is one of the states that securitizes bad homeowner property tax. But that is for the sheeple, not corps.
Sure, MI government can stop offering tax incentives, and then GM will build the plant somewhere else, like Ford is. Read through and understand what these tax breaks are, It is not a $2.5B free lunch, its GM will not pay sales tax or use tax on the labor and materials used to build the plant, and they will not pay property tax for some number of years, so lets look closer, if the plant is not built in Lansing, Lansing has no chance to collect the sales tax or property tax anyway, so its really thousands of high paying construction jobs right away, and 1700 manufacturing jobs down the road, for no cash outlay from the city. Its a win win… You always have to look at this from both sides, Do you want GM jobs in MI or not? For politicians, it’s that simple. Remember too, that every GM jobs brings about 5 support jobs to the area. You think GM jobs don’t matter? what happened to Pontiac or Flint when GM pulled out operations? Saying No to GM is basically a city wrecker…
Funny thing if states stop offering tax breaks and incentives to multi billion dollar companies then it wouldn’t matter where gm is going because nobody in the US would be giving handouts. Big corporate gets enough would you not agree?
Will never happen, there are always states that want to attract the new business, and states that have the business to lose. Bottom line if MI loses GM’s future investments they might as well fold up shop, they are already losing Ford, and retaining GM should be the most important priority for politicians, as when that money leaves an area, it usually does not come back. Like I said, Look at Flint, and Pontiac, take a little tour on goog-le maps and look at the old abandoned sites, its kind of sad, actually.
Donavan you make good points, I would like to add the city I use to live in probably 20 years ago had a bunch of incentives for Dell to come. If my memory serves me correctly I believe the city/tax payer bought the land for them built the facility and many other tax breaks I can’t remember. Anyways I think it was like 15 years no state tax or something well the second that time period was up guess what happened? Dell left and yes this was before Dell became what they are now if I could post a pix on here you would see that now it’s used for something with usps and Amazon has some kind of packing center there. Now this same city is making tons of offers to oracle to come same thing tons of money to get them here, but it starts out where the jobs are very few because like most deals like this when companies say they are creating x amount of jobs yes they technically are but they are also transferring x number of people to fill those positions. Point is states should treat these companies like NY did to Amazon and Amazon is way bigger then gm could ever dream of being NY said no and Amazon looked elsewhere, it’s not fair to give them deals when they can buy it there self then when the tax deal is up these companies leave. That’s just my two cents anyway.
Many of these states and cities have high taxes to begin with, and if they would just lower the darn things they could retain businesses.
The difference in luring a business like Dell or Oracle, is they just have office buildings and office buildings are everywhere an cheap to build, when a manufacture builds a battery plant it very specialized and expensive infrastructure, GM is not going to leave their battery plant for a better offer in 5 or 10 years, as they have too much $$$ invested, this is billions of dollars in infrastructure GM plans to spend, not just a small office complex. Not to mention in this specific situation, attracting the battery investment to Lansing gives a future to the 2 assembly plants in Lansing because in 5 to 10 years those babies would be shut down without batteries. It’s a big deal for Lansing, and that is why G got no resistance from the city.
Tesla has screwed the state of NY with their factory there, but that was a Solar City deal, and Solar has never quite worked out the way Tesla planned.
@ Donavan
Thanks for that I didn’t even think of it that way. You are right though. I have never been inside the old Dell building but it’s right across the street from part of the airport in Nashville and it appears at least from the outside to just be a warehouse/office building type of structure.
You guys staying getting screwed in Nashville they were suppose to get a ikea plant to right? Wasn’t it going somewhere off 24 then the city took to long to build it or clear the land and ikea said forget it?
I don’t live down there anymore but my brother still does. But that was the city’s fault not ikea, the city made a bunch of promises they didn’t keep and ikea needed it open quickly and the city messed around to long so ikea went elsewhere. I don’t know where they ended up.
Then the companies will just go to Mexico or China. Furthermore it would bexalmost impossible for all states to agree not to give out tax breaks.
Well its not a win-win because there is going to be substantially more abuse on the infrastructure that the people will end up paying for. Manufacturing plants this size are going to have an impact on roads, may require more lanes added; more traffic lights. Increased sewer and water capacity. Potentially schools may have to be built or added on, etc.. All these things require tax dollars and if GM is not paying them then the people of Lansing will have to pay for them.
Added infrastructure like roads schools, parks, storm drainage, sewer, water, and fire stations are called “mitigations”, and are usually paid for by the developer, this Tax Break for GM specifically calls out the tax cuts and they are specifically sales and use tax on construction, and property tax deferral over a fixed period of time. There are no other freebees in this specific plan .
LOL, Developer pays for all that. What world do you live in where the developer that is building a manufacturing facility then has to cough up the funds to build a school.
Yes corps are very good at exploiting “tragedy of the commons”. Few pay attention. Wasn’t it Michigan who got tricked by Foxconn? Legislators really are not the brightest bulbs.
Wisconsin got tricked by Foxconn, but never paid anything…
Are you sure? From urban milwaukee website. “The Wisconsin Department of Transportation (WisDOT) has taken on more than $630 million of infrastructure improvements spurred by construction of the $10 billion Foxconn Technology Group’s flat-panel display factory in Mount Pleasant…, the Milwaukee Business News reported. Approximately $500 million will go toward widening a portion of Interstate 94 and $134 million to upgrading local roads around the facility.” 630M for roads to nowhere is not nothing. These proposals are all marketed as jobs. Reality is they are for shareholders. As I said elsewhere, 1.7M/job is just crazy. It is more like 100K/job and the rest for shareholders. One option might be to put in the contract you will stay for 50 years and you will employ a minimum of 1700 employees each and every year at a wage no less than 25/hr, full time. Failure to do so requires immediate return of all taxes waived or jail for the C-suite. But I’m dreaming, never going to happen. The pork will be tossed to the rich as always.
no because texas will bend over for anyone.
Texas, Georgia, Kentucky, Tennessee, Missouri, Oklahoma, Nevada, New Mexico, and many others are doing everything they can to attract business…
Waste of taxpayer money.