LANSING, Mich. (Michigan News Source) – Ford Motor Co. and Michigan economic development officials have drastically reduced public funding for two electric vehicle (EV) projects, cutting taxpayer support by at least $750 million according to a report from the Detroit Free Press. Blaming a turbulent EV market, these significant reductions raise questions about the future of Michigan’s auto industry and the effectiveness of the state’s business subsidies program.

“We want people to trust us, we need people to trust us,” said Christin Armstrong, a senior vice president with the Michigan Economic Development Corp (MEDC). “We come with good intentions… what we are presenting to the board is the best project we can put together based on the info and circumstances at that moment.”

Major cuts at Marshall.

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Ford and the state of Michigan have agreed to cut a proposed $825 million in tax credits for a new EV battery factory outside Marshall, reducing it to almost $225 million. Additionally, a $69 million public grant for the project was slashed. These cuts reflect Ford’s earlier decision to reduce its investment and job commitments at the site. Nevertheless, Ford claims the facility is “more than 20% complete” and still on track for a 2026 production start.

Nixing a $100 million grant.

In a separate initiative, the state and Ford canceled the entire $100.8 million grant, which was intended to create over 3,000 jobs and stimulate up to $2 billion in investment at various Ford locations in Michigan. According to Tony Reinhart, Ford’s director of state and local government affairs, “We are nimbly adjusting our manufacturing operations to match evolving customer demand, and the Michigan Strategic Fund board is revising its incentive offers accordingly.”

MEDC officials noted that Ford never received any of the $100 million promised, as the largest chunk of public money was tied to a tax rebate dependent on the plant becoming operational. “These projects are still growth opportunities for Ford,” said Josh Hundt, senior project marketing adviser with MEDC.

Resizing in Marshall.

In late November, Ford announced it would scale back its commitment in Marshall, a site known as the BlueOval Battery Michigan site. The company reduced its investment by $1 billion, cut 800 promised jobs, and decreased the plant’s production capacity by 40%.

State economic development officials then adjusted public funding, with Ford now eligible for a $141 million grant if it invests $2.5 billion and creates 1,700 “qualified” jobs. The grant could increase to $166 million for 2,100 jobs and a $3 billion investment, but these terms are still a significant cut from the originally promised $210 million for 2,500 jobs and a $3.5 billion investment.

Political shifts in economic development.

The EV projects were initially unveiled at events featuring Michigan political leaders, with Michigan Democratic Governor Gretchen Whitmer celebrating the promised jobs as part of a manufacturing renaissance. However, the projects have highlighted the evolving politics of economic development in Michigan. Republicans largely opposed public funding for the BlueOval project, while some Democrats also expressed discomfort with the spending.

The Mackinac deal that never was.

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In June 2022, Governor Whitmer joined Ford executives to announce more than 3,000 jobs and a $1.1 billion investment at five Ford factories. The project was presented as a done deal. “Ford is investing, they are making strategic decisions about the future of mobility, they’re leading the way,” Whitmer declared at the Mackinac Policy Conference. Yet, as the recent adjustments show, promised jobs can be reduced at any time.

Biden administration still investing in Michigan EV future.

Meanwhile, the Biden administration is tossing a cool $650 million to two Michigan auto plants to churn out more electric vehicles regardless of the volatile EV market and minuscule sales of the product.

General Motors’ Lansing Grand River Assembly is set to get up to $500 million to pump out shiny new EV models and keep 650 UAW jobs alive while adding only 50 new hires. Meanwhile, ZF North America Inc. will snag around $158 million to transform part of its Marysville plant from making parts for old- school engines to EV components, keeping 536 jobs on life support.

As Biden gears up for a Detroit campaign trip today, he’s sprinkling over $1 billion in grants to retool or reopen 11 auto plants across the nation. This includes $335 million to resurrect Stellantis’ dormant Fiat Chrysler assembly plant in Illinois, saving 1,450 union jobs, and $250 million for its Indiana transmission plant to start making electric drive modules, preserving 585 jobs, including 387 UAW workers.

Gov. Whitmer and Rep. Elissa Slotkin still on board promoting EVs.

This taxpayer subsidy appears to be part of Biden’s strategy to try to strengthen the EV market in Michigan, despite a market for EVs that continues to remain hesitant. Governor Whitmer and Rep. Elissa Slotkin, a Democratic contender for Senator in the state, are still promoting them as well.

In Gov. Whitmer’s latest press release, Slotkin says about the Biden grants going to Michigan, “The next generation of vehicles should be built by American companies and American workers, which is why I’m so happy to see what’s happening today in Lansing at GM’s Grand River Assembly. Today’s announcement is a step towards that goal and will ensure the plant is well-equipped to build new, advanced electric vehicles.”

She went on to say, “Whether or not you drive an EV today, or ever care to, there’s no denying they will be a big part of the vehicles of tomorrow. All you have to do is look at Europe and Mexico and see that China is looking to be *the* manufacturer of this next generation of cars. That’s why it’s essential to our economic and national security that electric vehicles, the batteries and components they run on, and other critical products are made in America. The funding announced today will also protect existing jobs and generate new ones while driving economic growth in the area, so it’s a clear win for Lansing.”