GM to invest $6.5 billion in Michigan for electric vehicle production

General Motors Co. is expected to detail its plans on Tuesday to invest $6.5 billion in two Michigan sites and create 4,000 jobs in the state, according to a meeting agenda and two sources familiar with the situation.

The Detroit automaker is expected to announce its investment at an event in Lansing. The news would come a day before Governor Gretchen Whitmer’s State of the State address, which is expected to highlight the state’s economic development efforts as the auto industry shifts to electrification.

GM and battery partner LG Energy Solution are planning a $2.5 billion investment in Lansing, near GM’s Delta Township plant, for a battery cell manufacturing site that will support a growing list of vehicles electric to come.

GM also received a tax break for a $1.3 billion investment in its Orion assembly plant in Lake Orion to build electric vehicles, but the amount of the investment is expected to be $4 billion. dollars. Sources previously told the Detroit News that the automaker plans to build electric trucks there.

“GM appreciates the support it has received from the Governor, State Legislature, Township of Orion, City of Lansing and Township of Delta regarding two potential projects GM is considering in Orion Township. and Lansing,” GM spokesman Dan Flores said in a statement. . “Until these projects receive final approval, we have no comment on the potential announcement timeline.”

Yet GM’s decision to invest in electric vehicles and batteries in its home country comes after Michigan lost an $11.4 billion investment from Ford Motor Co. and its partner SK Innovation in Kentucky and Tennessee.

As a result of this loss, state lawmakers and Whitmer enacted a major business incentive program to attract similar investment to Michigan. The agenda for Tuesday’s Michigan Strategic Fund board meeting indicates that the GM project is seeking a grant from the Strategic Site Preparation Program and a grant from the Critical Industry Program.

The grants were made possible by legislation Whitmer signed into law in December providing $1 billion for economic development incentives. The bills created the Strategic Outreach and Attraction Reserve Fund (SOAR) within the Michigan Department of Labor and Economic Opportunity. The SOAR Fund’s $1 billion could only be transferred to two other new funds — the Michigan Strategic Site Readiness Fund and the Critical Industry Fund — with the approval of lawmakers, giving them sway over decisions.

The local governments of Lansing, Delta Township and Orion Township also signed tax incentives to maintain GM’s interest. The Orion Township Board last week approved a tax abatement for the project that would create or retain 2,000 jobs. The discount is 12 years plus three years during the construction phase, which is expected to start in July.

In December, Lansing City Council unanimously approved an Industrial Facilities Tax exemption for the battery cell plant there. The Industrial Facilities Tax Exemption exempts the facility from property or personal taxes for up to 12 years, according to the Michigan Department of Treasury.

The Council also approved another tax incentive for the project by passing a resolution recommending the formation of a Renaissance Zone for development in an application to the Michigan Strategic Fund.

A revival zone exempts people and property from taxes levied by the city. In this case, the revival zone would be in place for 18 consecutive years beginning in December 2022, or whatever date is set by the Michigan Strategic Fund, the governing body of the Michigan Economic Development Corp.

“General Motors is expected to present a business investment plan at next week’s board meeting,” said Otie McKinley, spokesman for the Michigan Economic Development Corp. The MSF Board of Directors will meet on Tuesday at 8:30 am.

Lansing and Delta Township officials approved the extension of a previously existing agreement that transfers ownership from the township to the city. Lansing assesses and collects property taxes. Tax revenues are then split between the two.

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