by Scott McClallen
The state of Michigan could invest up to $135 million in new auto and electric vehicle (EV) plants for Ford Motor Company.
The news follows Stellantis NV choosing Kokomo, Ind., as the site for a $2.5 billion EV battery manufacturing plant that could employ 1,400 people, passing over locations around the Motor City.
The Detroit News first reported the story, citing anonymous sources who said the investment could create up to 3,000 jobs.
Michigan is attempting to remain a heavyweight in domestic automotive production.
Despite the state previously dominating the industry, automotive companies are now speeding past Michigan’s rough roads, high electricity costs, and a waning workforce comprised of less than half of its 10 million residents to more Southern states.
Even Dearborn-based Ford chose Tennessee and Kentucky for $11.4 billion of electric vehicle spending. However, Michigan did attract a few sites. Taxpayers footed $189 million subsidizing LG Energy Solutions to create EV batteries, as well as $824 million on General Motors’ electric vehicles programs.
Creative destruction has always destroyed jobs, just as the Model T pushed the horse and buggy out of work – but this time taxpayers are subsidizing an industry that will shrink in the future.
A 2017 Ford report found EVs had 30% reduction in labor hours per unit compared to an internal combustion engine (ICE).
A report from the left-leaning Economic Policy Institute estimates the national auto industry could lose 75,000 jobs by 2030 if battery electric vehicles (BEV) leaped to 50% of domestic auto sales.
“We find that if this shift to BEV is done without any policy efforts to shore up U.S. leadership in BEV production or to enhance job quality and equitable access to good jobs, then this sector will see employment decline and job quality continue a downward march.”
The report recommended continuing to subsidize the industry, which many politicians support.
Gov. Gretchen Whitmer proposed $74 billion budget aims to spend $374 million subsidizing EVs, driven mainly by more affluent people.
Only 13,545 EVs are registered in Michigan, but automakers and lawmakers are doubling down on the tech, betting that EVs will replace internal combustion vehicles.
Ford, Volvo, GM, and Stellantis have said they want a joint goal for EVs to compose up to 50% of US sales by 2030.
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Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi.
Photo “Ford Michigan Plant” by Dwight Burdette. CC BY 3.0.
