Billionaires in GM, Michigan are holding the state hostage for more handouts even as they cut jobs

On December 15, 2024By Littum

General Motors is threatening to demolish its iconic Renaissance Center headquarters, the tallest building in the city of Detroit, unless it receives public funding for renovations.

The latest shakedown follows the company’s announcement last week that it is selling its stake in Ultium Cell’s battery factory outside Lansing, Michigan to its joint venture partner LG Energy Solutions. General Motors received $666 million in taxpayer funds from Michigan’s Strategic Outreach and Attraction Reserve for the Lansing battery plant and for electric truck production at the Lake Orion, Michigan Assembly Plant.

In the meantime, report in Detroit News and other sources reveal that billions in cash handouts from the state of Michigan to auto and electrical-related manufacturing have produced few net jobs. So far, only 100 jobs have been created at the Lansing facility, and production at Lake Orion has been pushed back to July 2026. Both projects were expected to create between 3,200 and 4,000 jobs.

These types of government grants are consistent with the policies of the Biden administration, which offers massive financial support for the EV transition, including the announcement this month of a nearly $7 billion loan to Stellantis for two Indiana battery plants. The Biden administration is handing over an additional $6 billion to Rivian to build a power plant in Georgia.

The UAW, for its part, has supported state handouts to Ford and GM, falsely claiming they will create “good paying” jobs. In fact, the planned battery factory jobs will pay significantly below even the inadequate wages negotiated in the 2023 National Auto Contract. The real interest of the UAW apparatus, as always, is not “good paying” jobs, but additional dues revenue to maintain the salaries of the union’s bloated staff.

The request for additional funding comes as GM, Ford and Stellantis have carried out thousands of layoffs in Michigan and beyond in recent months. In November, GM announced 1,000 layoffs, mostly targeting wage earners in Suburban Detroit. Stellantis has laid off more than 4,000 US workers since September, and Ford has significantly reduced production at its Rouge Electric Vehicle Center (REV-C) in Dearborn, Michigan.

The threat to demolish the Renaissance Center, a supposed symbol of Detroit revitalization and the city’s tallest skyscraper, typifies the arrogance and greed of the corporate elite, who view public funds as a private piggy bank. Dan Gilbert, CEO of Quicken Loans and a partner in the GM shakedown operation, has benefited from massive government handouts as well as funding from the city of Detroit for various projects.

Gilbert’s wealth skyrocketed during the pandemic, briefly making him the 10th richest man in the world. He profited handsomely from the “redevelopment” of Detroit, which has focused on a few high-profile projects, mostly downtown, but done little to improve services or alleviate poverty for working-class residents.

University of Michigan architecture professor Craig Wilkins, quoted by Detroit Newsmade the obvious point: “It’s not uncommon for big companies, when they want to do big projects, to present things in an either-or way to shape the debate in the direction they want,” Wilkins said. “The idea of ’if you don’t go along with this, we’ll just tear it all down’ seems like blackmail to me, and I don’t think the public should be blackmailed.”

General Motors, as well as Michigan-based Ford, have been major recipients of cash from the Democratic Whitmer administration, mainly targeting the development of electric car production. The Whitmer administration stepped in to massively increase funding for EV development after Ford decided to locate larger EVs in Kentucky and Tennessee instead of Michigan.

A battery is lifted into place for installation in the Chevrolet Bolt EV at the General Motors Orion Assembly plant in Orion Township, Michigan. (AP Photo/Duane Burleson)

The 2025 state budget pushed through by the Whitmer administration provides an additional $500 million to the Strategic Outreach and Attraction Reserve (SOAR) Fund, along with money for other corporate interest grants and initiatives. The same budget cuts funding for education.

The Detroit News reported that both Ford and GM have refused to disclose how many jobs had actually been created as a result of hundreds of millions in taxpayer subsidies.

A study of Bridge Magazine in September found that of about $2 billion in corporate handouts from the state since 2021, only about two percent of the 12,000 promised jobs had materialized.

One of the costly investments that has failed or been delayed or scaled back is the Ford Blue Oval Battery Plant in Marshall, Michigan in the southern part of the state. Ford has received various incentives from both the state and local governments totaling about $2 billion. This included tax breaks worth $772 million over 15 years and $630 million to fund site preparation and infrastructure. This was in addition to direct cash grants.

In November 2023, Ford announced that it would reduce its investment in the plant from $3.5 billion to between $2.5 and $3.0 billion and reduce the number of expected jobs from 2,500 to 1,700. The facility will not open until 2026.

The state of Michigan recently, after a public outcry, rescinded a $100.8 million handout to Ford for investment in Detroit-area facilities after the company, rather than creating jobs, cut production at REV-C in Dearborn.

According to Detroit Newsanother company, One Energy, received over $200 million from the state and other public sources to help subsidize the construction of a battery plant in Van Buren Township west of Detroit. The plant was supposed to create 2,112 jobs, but at last count only 240 were employed in Michigan out of a total workforce of 270.

Another battery maker, Gotion, received funding for a facility near Big Rapids, Michigan. It was approved for about $125 million in critical industry program funding from Michigan and $50 million in strategic preparedness funding. The company has also been promised $636 million in tax credits over 30 years. But few, if any, of the 2,350 jobs the company promised have materialized.

In June, the state granted $250 million for a semiconductor complex in Mundy Township outside Flint. No concrete plans for an actual facility, let alone projected employment, have been made public.

Meanwhile, Midland, Michigan-based Dow Chemical is seeking $120 million in state funding to modernize the company’s research and development activities. Midland said the money would not create jobs but would only serve to maintain 5,000 existing jobs, a not-so-subtle threat to move operations if state lawmakers don’t pony up.

The spread of public funds to private investors occurs at the same time that education and other pressing social needs are starved of funds. The 2025 Michigan budget cuts state funding for education by nearly $1 billion and slashes mental health funding for schools from $328 million to just $25 million.

A real struggle to defend jobs must not be based on the further enrichment of the capitalist oligarchs, but the development of a socialist political movement based on the working class. To put an end to the theft of society’s resources by the rich, the giant car companies must be placed under the democratic public ownership of the working class.