MARSHALL, Mich. (Michigan News Source) – Michigan earned an award for its investments in subsidies to the Ford Motor Company BlueOval Electric Vehicle Battery plant in Marshall, but perhaps not the award it might have wanted.
The Center for Economic Accountability – a nonpartisan nonprofit working to advance economic opportunity and transparency – rated Michigan’s deal with Ford as the 2023 “Worst Economic Development Deal of the Year.”
“The award recognizes a state or municipal government subsidy of a private company in the name of ‘job creation’ and economic growth that goes further than any other that year to exemplify wastefulness and ineffectiveness of state government economic development subsidy programs,” according to the CEA.
Ford will be working with China’s Contemporary Amperex Technology Co. Ltd. (CATL), which would help provide technology and workers to make lithium-iron phosphate batteries. Governor Gretchen Whitmer has been a supporter of the project advocating for more jobs in the state as well as reducing reliance on foreign countries for supply chains.
“These new battery plants will be game changers: supporting thousands of families, uplifting local businesses, and ensuring our cities and towns thrive for decades to come,” Gov. Whitmer said, “They’ll help Michigan go toe to toe with China, bringing critical parts of the auto supply chain home. We must reduce our reliance on Chinese products, which have caused work stoppages, shortages, and car price hikes over the last few years.”
The 2023 CEA award was historic partially because it was the first time Michigan received the award.
“At the end of the day, the reported use of political consultants to run a smear campaign against skeptical local residents that really set Michigan’s subsidies for Ford’s Marshall battery plant apart from all the other terrible corporate welfare deals across the country,” said CEA president John C. Mozena. “It’s one thing for politicians to use fuzzy math to throw massive amounts of public money at a giant corporation so they can take credit with voters for so-called ‘job creation;’ we see that all the time.
This year marks the fifth annual award, and the second EV battery plant to receive the honor according to CEA, who awarded Ohio’s General Motors and LG Chem deal in 2020.
2023 CEA president Mozena also reflected on the trend of EV awardees, following last year’s award to Georgia for its investments in Rivian, a California based all electric vehicle vehicle manufacturer.-
“It’s notable that in five years, we’ve now had two electric vehicle battery plants and one EV assembly plant stand out as the worst economic development deals of their respective years, even during an era of unprecedentedly large and dumb subsidies by state and local governments,” said Mozena. “Federal industrial policies promoting politically favored technologies are driving short-sighted decisions by state and local elected officials, and communities across the country will be paying the price for those deals long after the politics and policies have moved on.”
The CEA highlighted the $1.75 billion price tag which included a $772 million allotment in tax credits over a 15-year period through the Michigan Strategic Neighborhood Fund towards the project.
After a two month hiatus, Ford restarted the construction in Marshall in November having had doubts in the company’s ability to “competitively run the plant.”
“We are pleased to confirm we are moving ahead with the Marshall project, consistent with the Ford+ plan for growth and value creation,” Ford announced. “However, we are right-sizing as we balance investment, growth, and profitability. The facility will now create more than 1,700 good-paying American jobs to produce a planned capacity of approximately 20 GWh.”
The project underwent massive downsizing of the total number of workers, losing 800 jobs, and had a 15 gigawatt-hour (GWh) reduction in capacity.