Michigan Offered $300 Million in Tax Credits to Save GM Jobs

By: Associated Press
By: Associated Press

Wisconsin offered $195 million in state and local incentives to lure General Motors Corp.'s new small car plant to Janesville, officials who worked on the failed bid said Tuesday.
Wisconsin lost a high-stakes bidding war for the plant with Tennessee and eventual winner Michigan last month, when GM picked Orion Township north of Detroit to assemble small and compact cars.
Wisconsin's $195 million offer included $115 million from the state, $38 million from local governments in and around Janesville and about $42 million from the private sector, according to officials who put the deal together.
Tennessee Gov. Phil Bredesen said last week that GM had wanted "north of $250 million" upfront to select Spring Hill, Tenn. near Nashville, but his state offered only about $20 million in training and education money in addition to long-term tax breaks.
Neither state came close to Michigan, which pulled together a tax credit package worth $779 million over a 20-year period, according to the Michigan Economic Development Corp. The package included state business tax incentives awarded to GM in previous years that otherwise would have gone unused by the automaker. About $300 million were new credits for job preservation.
Troy Clarke, GM's president for North America, said last month that all three states made "very attractive offers" but that Michigan officials were "very creative and brought a whole package."
Wisconsin's $115 million contribution to the state's bid consisted mostly of tax credits and energy efficiency grants, along with a "small smattering of economic development tools," said Zach Brandon, executive secretary for the state Commerce Department.
Brandon said he had no regrets about the offer.
"We knew it was an uphill battle from the beginning," Brandon said. "We knew based on a lot of factors that Michigan was going to be tough to overcome."
A news release from Janesville said the city promised $15 million plus savings of up to $1 million a year by offering to operate the plant's wastewater facility. Rock County promised $20 million in incentives, while Beloit pledged $2 million.
All incentives were tied to GM keeping at least 1,200 workers at the plant for at least 10 years.
"I know the Wisconsin offer was quite exceptional but there are a lot of factors that go into a decision like this," Beloit City Manager Larry Arft said.
Janesville City Manager Eric Levitt said officials decided to release the bid information Tuesday because negotiations were over and they had received a request from the Janesville Gazette.
All three states had sought the plant in hopes of saving jobs amid struggling economies.
Janesville, a city of 60,000 about 75 miles southwest of Milwaukee, had 14.3 percent unemployment in May -- the third-highest statewide. The Janesville plant, which had been operating since 1918 and was GM's oldest, employed about 1,200 people before it closed in April.
The Tennessee plant currently employs about 2,500 people, but their future is uncertain once GM stops making the Chevrolet Traverse around Thanksgiving.
About 1,200 jobs will be saved at the Michigan plant, which had been slated to close later this year before GM decided to build the new car there.

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  • by Save -a - job on Jul 8, 2009 at 04:09 AM
    The state should just eliminate all property taxes on people over 62 as an incentive for Michigan workers to retire early to open up jobs for the unemployed.
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