Tax incentives worth some $834 million from the Michigan Strategic Fund were a key factor in landing the $7 billion investment General Motors announced Tuesday it was making in the electric vehicle industry in Michigan.
The automaker’s $7 billion investment includes $4 billion to convert GM’s Orion Township assembly plant for the production of full-size EV pickups and up to $2.5 billion to build Ultium’s third U.S. battery cell plant in Lansing, growing the state’s global leadership in electric vehicle and advanced battery production.
The MSF approved the support for GM’s projects in Orion Township and the Lansing area, creating 4,000 new jobs and generating $6.5 billion in total capital investment. In addition to these EV-related investments in Michigan, GM also announced it is investing more than $510 million in its two Lansing-area vehicle assembly plants to upgrade their production capabilities for near term products.
“Today we are taking the next step in our continuous work to establish GM’s EV leadership by making investments in our vertically integrated battery production in the U.S., and our North American EV production capacity,” said Mary Barra, GM Chair and CEO. “These important investments would not have been possible without the strong support from the Governor, Michigan Legislature, Orion Township, the City of Lansing, Delta Township as well as our collaboration with the UAW and LG Energy Solution. These investments also create opportunities in Michigan for us to bring our employees along on our transition to an all-electric future.”
John Walsh, president and CEO of the 1,700-member Michigan Manufacturers Association, issued a statement congratulating GM on the “massive investments that will be felt through the supply chain, in related industries and in communities and families across the state.”
“MMA’s message for many years has been strong and unwavering: Michigan must be at the table with talent, a healthy business environment and tailored economic incentives amidst the aggressive efforts of other states to compete for manufacturing capital and job investments,” Walsh said. “GM’s announcement is proof that this winning combination will bring business investment and growth to our state.”
To support GM’s investments, the Michigan Strategic Fund approved:
- A Critical Industry Program grant in the amount of $600 million officials said was the first of its kind for the creation of up to 4,000 jobs related to the Orion Township and Ultium projects;
- An 18-year Renewable Energy Renaissance Zone which will require a minimum investment of $1.5 billion with the potential for up to $2.5 billion, estimated to be worth $158 million;
- A Strategic Site Readiness Program grant in the amount of $66.1 million awarded to the Lansing Economic Area Partnership (LEAP) for public infrastructure and utility upgrades.
The Michigan Economic Development Corporation also authorized a State Education Tax abatement to be used in conjunction with the locally approved Orion Township abatement in support of the GM expansion.
The Orion assembly plant and Ultium battery cell plant projects are the first to be approved utilizing the new Critical Industry Program and Strategic Site Readiness Program signed into law by Gov. Whitmer in December. These programs were created to ensure Michigan could effectively compete for billions of dollars in investment and attract tens of thousands of jobs to bolster the state’s economy.
“This project will create new opportunities for businesses of all sizes across the state to ensure that Michigan retains its strong supplier network and provide a platform for further investment throughout Michigan. GM’s decision underscores the strength of the workforce withinour state’s automotive sector and the bipartisan, Team Michigan commitment to winning the future of mobility and EV manufacturing here in Michigan,” said MEDC CEO and Michigan Strategic Fund President and Chair Quentin Messer Jr. “We appreciate GM’s continued vote of confidence in Michigan and their partnership on this historic economic win for our friends and neighbors, and are encouraged by the economic opportunity impact it will have across our state for decades to come.”
In addition to MSF support, Orion Township approved PA 198 real property tax abatements for the Orion assembly plant expansions.
“We are thrilled to partner with and support the continued growth and innovation of General Motors at the Orion Assembly Plant here in Orion Township. The new investment is a clear indication that GM trusts the hard-working people of Southeast Michigan as they continue their transition from automaker to platform innovator,” said Orion Township Supervisor Chris Barnett. “Not only are we excited about the thousands of jobs that will be created and the state-of-the-art electric vehicles rolling off the line, but the ripple effect this investment will have on our local economy will make a substantial positive impact for our residents and small businesses for decades to come.”
The city of Lansing has unanimously approved a Renewable Energy Renaissance Zone and PA 198 agreement. Lansing and Delta Township also both passed unanimously an extended 425 revenue sharing agreement for the plant for 25 years.
The Lansing Board of Water and Light’s Board of Commissioners also unanimously passed a special electric rate for Ultium. Additionally, in order to construct the new assembly plant, Delta Township and the Lansing Board of Water and Light will extensively and rapidly expand infrastructure capacity in support of the site.
“LEAP has been proud to lead regional efforts around this pivotal historic moment for Michigan and the Lansing region,” said Bob Trezise, president and CEO of the Lansing Economic Area Partnership. “This project represents a secure future for our region and state in making electric powered vehicles, batteries and systems, along with potential semiconductor/chip-making and other high technology-related companies and suppliers that will follow the core EV and battery investments to build the future of mobility.”