Senate OKs $101M incentive for Ford work in Metro Detroit

Lansing — A Michigan Senate panel gave the final approvals Thursday to a $100.8 million incentive for Ford Motor Co., which plans to use the state cash to supplement a roughly $1.16 billion update to five plants. 

The Senate Appropriations Committee voted 14-3 to transfer the money to the Strategic Outreach and Attraction Reserve for eventual distribution to Ford.

The Senate's approval came after a short presentation from the Michigan Economic Development Corporation and Ford, and senators asked no questions before delivering their stamp of approval.

The meeting was a marked change from the House Appropriations Committee's 20-8 vote last week, when House lawmakers questioned Ford's treatment of suppliers and the general idea of paying companies to stay in Michigan when other changes could be made to the state's tax or regulatory structure instead.

Ford Economic Development Director Gabby Bruno said Thursday the investment would support the company's electric vehicle plans by nearly doubling F-150 Lightning production in Dearborn. The money also would aid efforts related to gas-powered vehicles, such as the Mustang and the new Ranger, she said.

"Public-private partnerships like the one we’re discussing here today are important to keep Michigan at the forefront of automotive manufacturing," Bruno said. "The economic support you are considering for this project plays a key role in helping make the business case for Ford to expand its EV footprint.”

Bruno also argued the investment in Ford would have a ripple effect for suppliers — an apparent response to concerns raised by House lawmakers about alleged delays in payments to suppliers lower on the production chain. 

The money given by the Legislature would help to support the company's 2,200 suppliers from whom Ford purchases about $21 billion from annually, Bruno said.

Sen. Jim Runestad, one of three Republican senators to vote against the fund transfer, said he wasn’t in favor of fast-tracked deals made behind closed doors. He also argued that the state should be creating a more competitive business environment for all companies by scaling back regulations and taxes, rather than picking winners and losers.

“Fast-tracking these at this speed, finding out what’s in the language later on, doing this for a single company — I think Ford does a great job, but that’s one company,” the White Lake Republican said.

“We’re losing some of these deals because overall the business climate in Michigan is not competitive.”

Under the details of the agreement, Ford plans to invest about $1.16 billion to update five plants and create 3,030 jobs. The automaker has said about 65% of jobs created through the investment will be tied to electric vehicle manufacturing, according to Josh Hundt, chief projects officer and executive vice president of strategic accounts at the Michigan Economic Development Corp., who addressed House lawmakers last week.

The plan includes the creation of 1,508 jobs and $450 million investment at the Rouge Electric Vehicle Center; 382 jobs and $475 million at the Michigan Assembly Plant; 650 jobs and $35 million investment at the new Monroe Packaging Center; 250 jobs and $160 million at the Rawsonville Plant; and 240 jobs and a $40 million investment at the Livonia Transmission Plant.

In order to meet the terms of the state incentive, Ford must make the full $1.16 billion investment by June 30, 2024, or the tax dollars may be clawed back.

The company must fulfill its hiring quota by June 30, 2025. The jobs, which have an average pay of about $55,000, must be created in addition to Ford’s current Michigan base of about 22,190 employees and sustained for at least 12 months.

eleblanc@detroitnews.com