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State deal with GM could cost more than it is worth

LANSING — General Motors Co. (GM) announced on Jan. 25, an investment of more than $7 billion in four Michigan manufacturing sites, creating 4,000 new jobs and retaining 1,000, and significantly increasing battery cell and electric truck manufacturing capacity. This is the single largest investment announcement in GM history. The investment includes construction of a new Ultium Cells battery cell plant in Lansing and the conversion of GM’s assembly plant in Orion Township, Michigan for production of the Chevrolet Silverado EV and the electric GMC Sierra, GM’s second assembly plant scheduled to build full-size electric pickups, the automaker said.

Because of confidentiality agreements between Michigan lawmakers and the Michigan Development Corp. MEDC), however, it is not known what or how much taxpayer incentive money the state has promised to GM.

Thirteen state lawmakers, including the four House and Senate leaders from both parties, signed confidentiality agreements with the MEDC, promising to remain silent about plans for up to four new Michigan manufacturing plants, the Detroit Free Press reported on Jan.4. Records the Free Press obtained through Michigan’s Freedom of Information Act show the agreements purport to bind each of the lawmakers for five years — which is longer than any of their current terms in the Legislature. While many corporations make the decision to establish plants within the state, they do not come for free.

LG Energy Solution, a South Korean electric vehicle battery manufacturer, announced that it wants to expand its existing facility, bridgemi.com reported on Jan. 20, adding 1,000 jobs as it seeks to boost production by 2025. In exchange, the manufacturer wants the city of Holland to approve a 20-year, tax-free renaissance zone for the project, marking one of the earliest public requests for incentives since the state approved the $1 billion SOAR fund in December.

According to the city, the total package of incentives requested is $525 million, Bridge reported. The state is offering a workforce housing loan program valued at $10 million to support affordable housing, according to a briefing memo from the city.

In the MEDC agreement with GM, signed by the 13 lawmakers, as stated by the Free Press, the legislators are barred from sharing such details, including “potential job creation, investment, site location, site selection criteria, company identity, operations plans, company decision timeline, potential incentive offers, and any other details.”

A GM spokesperson said the corporation will not comment on the projects until the incentives receive final approval from the Michigan Strategic Fund and GM leadership decides to move forward.

However, “GM appreciates the support it has received from the governor, the State Legislature, Orion Township, the City of Lansing and Delta Township,” said spokesperson Dan Flores.

While the MEDC and lawmakers negotiate incentives with manufacturers like GM and GL to bring “high-paying jobs” to Michigan, the agreements bar taxpayers from being informed how much revenue is being offered to the companies for doing business in Michigan. The promise of high-paying jobs does not seem to have gained Michigan very many. Wallethub.com reported last week that Michigan ranked 42d in job recovery.

The Free Press article stated that it was not clear from the records whether any other lawmakers were asked to sign the confidentiality agreements, but declined.

Whitmer said at a recent media roundtable that she is covered by a separate nondisclosure agreement signed on behalf of a handful of people in the administration who might be privy to details about the potential developments.

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