by Scott McClallen
When Gov. Gretchen Whitmer announced Ford’s new $3.5 billion electric vehicle battery plant last week, her office’s news release said it would cost taxpayers $1 billion.
Nine days later, state officials asked for $750 million more to prep the Marshall site – bringing the possible total cost, if approved by lawmakers, to $1.75 billion.
It’s unclear when state officials discovered an additional $750 million is needed for site preparation. Neither the Michigan Economic Development Corporation nor Whitmer’s office has responded to The Center Square’s requests for clarification.
The $750 million in proposed additional spending includes $330 million to the Michigan Department of Transportation for road improvements; $224 million for pad-ready site improvements; $100 million for water and wastewater improvements; and $75 million for land acquisition. Other projected spending includes $15 million for Norfolk Southern rail improvements; $5 million for building inspections; and $300,000 to fund fiber optics.
State Rep. Andrew Fink, R-Hillsdale, told The Center Square that the subsidy plan is littered with problems.
“This project already had problems I’ve spoken of in the past, but now we find out that it’s actually three-quarters of a billion dollars more expensive than the administration first said, and some of the state subsidies will be going to a rail company that can’t keep its trains on the rails,” Fink said in a text message.
State Rep. Phil Skaggs, D-East Grand Rapids, said the extra spending was “smart government.”
“None of this is going directly to the corporation” Skaggs said during a Wednesday hearing. “It is not a blank check to the corporation. It is simply smart government to build the infrastructure around which private enterprise can thrive.”
John Mozena, president of the Center for Economic Accountability, a nonprofit organization for transparent economic development policy, told The Center Square that taxpayers have subsidized the auto industry since the mid-1990s. Since then, Michigan has lost 183,000 manufacturing jobs statewide.
Mozena said if the additional spending is approved, the 2,500 jobs potentially created by this deal would cost taxpayers $680,000 for each job that may or may not be created.
Mozena noted that Ford Motor Company has reported $158.1 billion dollars in revenues and reaped $10.4 billion in earnings before interest and taxes. By comparison, Michigan’s fiscal year 2021 revenues were $91.3 billion.
“Ford’s last annual earnings release said that the company was sitting on $32 billion in cash and $48 billion in liquid assets,” Mozena said in an email. “Clearly, they can afford to pay for their own mission-critical infrastructure just like any other company would, and more so than inflation-squeezed Michigan taxpayers.”
One Democrat swore to vote against the spending. State Rep. Dylan Wegela, D-Garden City, tweeted that the deal “makes no sense for Michigan.”
“This deal makes no sense for Michigan. The math just doesn’t add up,” Wegela said. “We need to invest in communities, not corporations. Ford made over $10 Billion in profits last year. They do not need any more taxpayer money. This is now the 3rd handout in two months. I’ll be voting no again.”
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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.
Background Photo “Gretchen Whitmer” by Gretchen Whitmer.