Michigan lawmaker questions corporate subsidies after Stellantis layoffs

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(The Center Square) – Big Three automaker Stellantis is planning temporary layoffs for one shift of workers at the Detroit assembly plant that builds Jeep sport utility vehicles.

The decision will affect roughly a third of the 4,600 employees at the plant.

Rep. Andrew Fink, R-Adams Township, said it is “terrible” that Michigan workers are going through these layoffs.

“One of the problems with the state’s economical development plan is that no one knows what will happen next in the economy, so when we hand out hundreds of millions of dollars to corporations, we’re gambling with taxpayer money with no guaranteed return,” Fink said in a text message.

In November, Stellantis sought 6,400 buyouts – nearly half its 12,700 total non-bargaining units.

Recently, Michigan has doled millions and more than a billion dollars to private companies laying off workers. When Gov. Gretchen Whitmer announced Ford’s $3.5B Marshall electric vehicle plant, it was expected to employ 2,500 people with “good-paying” jobs. Now, that plant will employ 800 fewer people making an average wage of $45,136 – about $22 an hour.

Taxpayers pledged a $1.75B subsidy for the plant at a per-job cost of $700,000.

That subsidy includes $630M in site infrastructure development, $772M in tax credits over 15 years through the Michigan Strategic Neighborhood Fund, a $120M grant through the Michigan Strategic Site Readiness Program, a $210M grant through the Michigan Critical Industry Program and $36M through the Jobs for Michigan Investment Fund Loan Program.

Michigan taxpayers will give Our Next Energy, a battery storage company laying off 25% of its staff, $236M for a $1.6B plant providing 2,112 jobs by 2027.

Courtney Overbey, Director of Communications at the Michigan Economic Development Cop., said the $200M Critical Industry Program performance-based grant is dependent partly on job creation of 120 jobs and $1.6 billion of investment.

“None of these were to be retained jobs; this project includes only new jobs,” Overbey wrote in an email.”

Overbey said ONE remains “on track” to meet milestones for its Michigan Gigafactory.

House Speaker Joe Tate, D-Detroit, called the layoffs “concerning.”

“There is ample opportunity in this state for Michigan workers to thrive and manufacturers to succeed in continuing to build world-class products as the auto industry evolves,” Tate said in a statement. “Layoffs should be a decision of last resort and I encourage Stellantis to revisit reducing the number of shifts at the Mack Assembly Plant.”

John Mozena, president of the Center for Economic Accountability, a nonprofit organization advocating for transparent economic development policy, said the state should rely less on the auto industry.

“It wasn’t that long ago that Michigan was going through a single-state recession thanks to its reliance on the auto industry; the rational response would seem to be to try to encourage as much diversity as possible in the state’s economy to avoid a repeat of that rather than trying even harder to tie the state to the auto industry’s uncertain future,” Mozena wrote in an email.

“Instead of doubling down on the idea that there’s something magical about manufacturing jobs that makes them worth hundreds of thousands of taxpayer dollars per job, Michigan should instead focus on creating a business environment that’s conducive to every kind of company, with special care paid to making it easy to create and grow startup businesses.”

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