GM is poised to invest billions into its Michigan-based production facilities, announcing $6.5 billion earmarked to support new electric vehicle production, creating an estimated 4,000 new jobs. Michigan lawmakers hope to incentivize the investment with $600 million in tax payer funds, but according to a recent report, the incentives are tied to benchmarks that are lower than the $6.5 billion and 4,000 new jobs that GM originally announced.
Per a recent report from The Detroit News, the proposed GM tax breaks drew criticism from lawmakers, who questioned the proposed incentives and whether or not they were tied to the proper benchmarks, which are lower than the figures which GM initially announced.
Responding to questions from House Appropriations Chairman Thomas Albert, Michigan Economic Development Corp. CEO Quentin Messer Jr. indicated that Michigan will “require repayment” of the incentives if the new GM investment does not result in the creation of at least 3,200 jobs, or 80 percent of the job creation total that GM initially announced. Additionally, Messer indicated that the incentives would require an investment of at least $3 billion, less than half of the $6.5 billion announced previously.
“So just to clarify, these jobs have to be there for six months, so the floor is six months on the jobs and the floor is $3 billion in investment, is that correct?” asked Republican representative Annette Glenn during a House Appropriations Committee this week.
“Yes. That is correct,” Messer replied, per The Detroit News.
Speaker Pro Tem Pamela Hornberger expressed concern over the incentives, especially while small businesses struggled to stay afloat.
“Coming from a family who’s owned a small business for nearly 50 years, it’s really hard for me to swallow this,” Hornberger said during the meeting. “There better be some better things in these contracts other than they can disappear in six months and GM can walk away from it.”
GM’s multi-billion investment is billed as the largest single investment in the automaker’s history. The investment plan includes $4 billion to convert the GM Orion Township Assembly plant for production of new GM all-electric trucks, as well as $2.6 billion to build a third Ultium Cells battery plant in collaboration GM joint venture partner LG Energy Solution.