Michigan lawmakers sign off on $666.1M for General Motors incentives

Lansing — Michigan lawmakers voted Wednesday to allocate $666.1 million in state funds for a General Motors electric vehicle project that's expected to create between 3,200 and 4,000 jobs.

The House and Senate appropriations committees provided the Republican-controlled Legislature's approval of the incentives by OKing transfers that shift money to accounts that can support the $6.5 billion GM effort, which was announced in January.

The company plans to spend $4 billion at its Orion Township facility to transition it for electric pickup production. Meanwhile, GM and LG Energy Solution, through their joint venture Ultium Cells LLC, plan to spend $2.5 billion to build a battery plant in the Lansing area.

Rep. Joe Tate, D-Detroit, said Wednesday's votes were an important step "to continue electrifying" the state's economy. State officeholders, including Gov. Gretchen Whitmer, have emphasized the GM project as key to securing auto jobs in Michigan as the industry transitions to electric vehicles.

"By investing in critical EV developments, we can ensure Michigan stays at the forefront of mobility and electrification while providing more opportunities for Michigan families to get ahead," Tate said.

Whitmer and the GOP-controlled Legislature worked together in December to set up a new economic development program to lure the project.

Under the program, lawmakers can put money in the Strategic Outreach and Attraction Reserve Fund. That money can only move to two other new funds: the Michigan Strategic Site Readiness Fund and the Critical Industry Fund.

GM's project is slated to get $600 million from the Critical Industry Fund and $66.1 million from the Michigan Strategic Side Readiness Fund. Under the state's new program, the House and Senate appropriations committees had to approve the transfer of the money from the SOAR Fund to the two other accounts. The committees provided that approval Wednesday.

The Senate Appropriations Committee voted 14-4. The House committee voted 18-9.

Sen. Jon Bumstead, R-Newaygo, was among the no votes. He said it was hard to justify giving away hundreds of millions in state taxpayer dollars to one company.

"It’s hard to look west Michigan business owners in the eye and tell them we cannot afford to give them the same economic incentives as GM," he added. "It isn’t fair to the small businesses trying to keep the main streets and downtowns of our communities alive."

Last month, some lawmakers questioned why state economic development leaders planned to tie the incentives to benchmarks that were lower than the 4,000 new jobs and $6.5 billion investment that have been touted.

In written responses on Feb. 18 to questions from House Appropriations Chairman Thomas Albert, R-Lowell, Michigan Economic Development Corp. CEO Quentin Messer Jr. said the state will "require repayment" of the aid if the project doesn't create "a minimum of 3,200 jobs," 80% of the previously announced job creation total.

But Messer has maintained GM has "committed" to creating 4,000 new jobs and retaining 1,000 current jobs.

"GM's commitment is unwavering. It is the same that we detailed in the press announcement," Messer told reporters in February.

cmauger@detroitnews.com