‘A really bad deal’: Michigan awards GM $1bn in incentives for new electric cars
In September, Ford stunned Michigan when it announced plans to build two massive electric vehicle (EV) plants in the nation’s southeast instead of its midwestern back yard. Fearing the future of the automotive industry was leaving Detroit, the state’s political class swung into action.
Four months later, lawmakers responded by handing a staggering new subsidy deal to GM that they claimed would fortify the Motor City’s standing as the world’s auto capitol during industry electrification: In exchange for $1bn in tax incentives, the Detroit-based automaker promised $7bn in investment for new battery and EV plants that could create 4,000 new jobs.
“This news is great for us and for Michigan, the epicenter of where we’re developing EVs,” GM president Mark Reuss said during the announcement.
But what’s good for GM may make less sense for state taxpayers, a Guardian analysis of the deal finds. Once again large corporate subsidies – paid for by taxpayers – look set to benefit the corporations while leaving taxpayers out of pocket.
Michigan has effectively agreed to compensate GM more than $310,000 for each job created, but during the next 20 years, the positions are unlikely to generate more than $100,000 in tax revenue in the very best case scenarios.
Collectively, the plants’ jobs will probably return less than $300m of the state’s $1b investment when contributions to state income, sales, property and other taxes are factored in.
The state also claimed the direct and indirect jobs created by the project will generate $29bn in new income over 20 years, or the equivalent of 29,000 jobs paying $50,000 annually. Economists from across the ideological spectrum who reviewed the analysis said that level of job creation is highly unlikely
Read more on theguardian.com
