Tax Credits Not Enough to Keep Federal-Mogul Open

By: Lori Dougovito
By: Lori Dougovito

When talk of closing Federal-Mogul's St. Johns plant began more than two years ago, state and local leaders came together to offer incentives.

In April of 2004, Governor Granholm signed legislation which changed the Michigan Economic Growth Authority Act to allow companies like Federal-Mogul to count multiple job locations to be eligible for a tax credit. Eight months later, Federal-Mogul was approved for a Single Business Tax credit valued at more then $65 million. The City of St. Johns gives the company tax breaks as well.

But even the incentives weren't enough to keep Federal-Mogul's doors open. City Manager Dennis LaForest says he's disappointed, but realizes the incentives were only good for the short term. More must be done long term, he says, to avoid losing more manufacturing jobs in Michigan.

Liz Boyd, Governor Granholm's Press Secretary, says the Governor did everything she could to keep the 420 jobs in St. Johns. Boyd says now the Governor will work with the city to ease the impact of closing Federal-Mogul.


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