Lawmakers raise questions at additional $750M request for Ford battery plant
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Michigan economic development officials who already approved state support valued over $1 billion to land a new electric vehicle battery plant in Marshall want lawmakers to approve an additional $750 million to prepare the site. While lawmakers stress the need to boost job creation, and the plant is expected to create 2,500 jobs, the ask has some questioning the return on investment for taxpayers.
Just last week, Democratic Gov. Gretchen Whitmer celebrated Ford Motor Co.'s decision to locate a new electric vehicle battery plant in Michigan. The decision came two years after Ford looked outside its home state to build new electric vehicle and battery plants, a move that prompted wide bipartisan support to establish a new fund to secure future investments in Michigan. That fund — the Strategic Outreach and Attractive Reserve Fund — has since doled out hundreds of millions in taxpayer-funded economic incentives to lure companies that pledge to create jobs in Michigan.
To support the Ford battery plant in Marshall, officials approved a $210 million grant for Ford from the SOAR fund, along with a 15-year tax abatement for the company with an estimated value of $772 million. They also signed off on a $36 million loan for the Marshall Area Economic Development Alliance to prepare the site. A Michigan Economic Development (MEDC) memo from last week outlining the investments forecast a need for additional taxpayer support.
More:Whitmer celebrates new Ford battery plant in Michigan backed by state support valued over $1B
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During a Michigan House Appropriations Committee hearing Wednesday, MEDC CEO and president Quentin Messer Jr. put forward the exact dollar amount: $750 million.
"Not a dime of this will go to Ford," Messer said. Instead, it will prepare infrastructure at the Marshall site, he said.
It's now up to lawmakers to consider the request.
Some signaled support for the proposed additional investment. "It is not a blank check to the corporation," said state Rep. Phil Skaggs, D-Grand Rapids. "It is simply smart government to build the infrastructure around which private enterprise can thrive."
Others questioned whether directing more money to support the Ford battery plant is the best use of taxpayer dollars. State Rep. Donni Steele, R-Orion Township, said lawmakers "should look at the total state cost and what we're not utilizing for all of our residents just for this one project." In a statement issued the day after the appropriations hearing, Steele made her opposition to the funding request clear.
"It's time to utilize state resources in a capacity that benefits all Michigan residents — such as fixing crumbling roads and bridges in communities throughout our state," she said. "These hundreds of millions of dollars should be used to proactively bolster Michigan’s future, instead of continuing to fund reactionary pet projects."
GOP lawmakers already expressed reservations before the request came to set aside more money for the project.
Ford has teamed up with Contemporary Amperex Technology Co. Ltd (CATL), a Chinese company and the world's largest battery manufacturer. Some Republicans have raised security concerns and possible ties between the company and the Chinese government.
Chris Smith, Ford's chief government affairs officer, said that the battery plant won't be a joint venture between Ford and CATL. He stressed that Ford is licensing technology from the company, the Chinese government plays no role in the project and no tax dollars will go to CATL. He added that Ford has to take steps to address the threat of industrial espionage even at sites that don't involve another company like CATL.
Clara Hendrickson fact-checks Michigan issues and politics as a corps member with Report for America, an initiative of The GroundTruth Project. Make a tax-deductible contribution to support her work at bit.ly/freepRFA. Contact her at chendrickson@freepress.com or 313-296-5743. Follow her on Twitter @clarajanehen.
This article originally appeared on Detroit Free Press: Michigan lawmakers react to $750M request for Ford plant
