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Michigan approves automaker tax breaks
By Jim Hagerty
The Michigan Economic Development Corp. announced Oct. 26 the state has agreed to a series of tax breaks for Detroit’s three automakers. The deal, sparked by an effort from Michigan Gov. Jennifer Granholm, also includes agreements by Ford, Chrysler and General Motors that each will do its part to invest $2.1 billion in Michigan to create at least 2,250 jobs.
Granholm, in her final term as governor, has been a leading voice in homeland job security since assuming office in 2003. She said 2010 has been the strongest in a decade for auto industry job growth. The state’s allocation of tax credits will allow the state to remain a suitable front for the Big Three to continue making cars instead of opting for foreign markets and labor.
“This creative repurposing of unused tax credits will affect future investments and make the business case for Michigan to be the place of first choice for the automakers,” Granholm said. “It’s really a remarkable week for Michigan’s economy future.”
Granholm also praised gains made by General Motors and Chrysler after both companies restructured and emerged from bankruptcy. Chrysler and GM have remained profitable despite closing dozens of Michigan suppliers and auto plants.
As part of the new deal, General Motors announced it will spend nearly $350 million on three assembly plants, including its Grand River Assembly facility and a Cadillac, Mich., plant. The investment will add about 600 jobs. Meantime, Chrysler has agreed to spend $1 billion to boost its small and mid-sized products at its Sterling Heights and Dundee operations. Chrysler’s Sterling Heights plant was slated for closure this spring, but officials changed course after Granholm urged CEO Sergio Marchionne to keep operations going.
Ford will create more than 1,000 jobs by focusing on several fuel efficiency features. Although the company hasn’t released details, it has announced its investment will be approximately $850 million.
Details of the industry’s new tax breaks, which have not been released, are said to be made public before the end of the year.
From the Nov. 3-9, 2010 issue