Michigan to pledge $135M to help Ford retool Metro Detroit plants
Lansing — Michigan is poised to commit as much as $135 million in state taxpayer incentives to Ford Motor Co. toward investments in the automaker’s manufacturing facilities in southeastern Michigan, The Detroit News has learned.
The automaker’s plans, dubbed “Project Sand” by state economic development officials, involve retooling plants for both electric and internal combustion engine vehicles and parts, two sources told The News. The investment is billed as one that would add 3,000 new jobs at local Ford facilities, three sources familiar with the proposal told The News.
Under the deal, the details of which were still subject to change, the state would pledge $100 million from a new job-creation fund the Legislature established in December as part of a deal to land $6.5 billion in EV investments from General Motors Co., two sources told The News. The remaining incentives would come from a State Essential Services Assessment property tax exemption at certain Ford facilities, two sources said.
An announcement with Ford and state political leaders was being scheduled for Thursday during the Detroit Regional Chamber’s Mackinac Policy Conference, according to two sources briefed on Ford’s plans.
The Michigan Strategic Fund, an economic development board that must approve spending from the job-creation fund, scheduled an emergency meeting for earlier that morning, according to a board member who spoke on the condition that they not be identified. The staff had not said what will be on the agenda, that board member said.
Ford’s total planned commitment to reinvestment in the Michigan facilities was not clear Friday. Ford spokesman Mark Truby declined to comment.
If approved, the deal would give Michigan leaders another showpiece suggesting it can compete to retain and attract investment in electric vehicle production facilities. It also would further deplete Michigan’s newest funding source for luring investment in the state.
In late January, the Michigan Strategic Fund’s board awarded GM and its battery partner LG Energy Solution $666 million in cash incentives from the new $1 billion fund, leaving a $333 million balance in the Strategic Outreach and Attraction Reserve Fund.
State officials and lawmakers have been scrambling for months to secure new investments in EVs in Michigan from the Detroit Three automakers after Ford announced an $11.4 billion mega-investment with EV battery partner SK Innovation in Kentucky and Tennessee last fall.
The expected announcement would come a week after Stellantis NV unveiled a planned $2.5 billion joint investment with South Korean battery manufacturer Samsung SDI in Kokomo, Indiana — another major EV-related investment from a Detroit automaker placed outside of Michigan.
Bobby Leddy, a spokesman for Gov. Gretchen Whitmer, declined to comment on the plans Friday.
Whitmer, a Democrat seeking re-election this year, has asked the Republican-controlled Legislature for $500 million more to replenish the funds as her administration tries to compete with other states for big economic development deals involving EV and semiconductor manufacturing, as well as the pharmaceutical industry.
Stellantis’ planned Kokomo battery plant with Samsung would create 1,400 jobs, the companies estimated. It is Stellantis’ first U.S. gigafactory investment to supply North American electric vehicle assembly and is expected to launch in 2025.
Earlier this month, the transatlantic automaker also said it would put $2.8 billion into Canadian EV operations in Windsor and Brampton in Canada.
“Michigan’s pipeline remains strong and we remain laser-focused on working closely with our partners across state government, the Legislature, our utilities and our regional partners to continue make the strong case for Michigan,” Michigan Economic Development Corp. CEO Quentin Messer Jr. told The News after Stellantis announced its investment in Indiana.
Those announcements came on the heels of Ford’s plans to invest $11.4 billion at facilities in Kentucky and Tennessee to build electric vehicles and batteries in partnership with SK Innovation.
The move set off a scramble in Lansing to make Michigan more competitive for future projects, culminating in the December economic development deal to secure GM’s investment in the state. A month later, GM confirmed it would create 4,000 jobs at EV and battery production facilities in Delta Township and Lake Orion.
The Detroit Three’s actions are part of the auto industry’s larger transition from gas- and diesel-powered vehicles to electric ones. The race is on to determine whether Michigan will remain the center of the U.S. automotive industry, or whether investments in the South and elsewhere will overtake Michigan’s traditional dominance.
Foreign-owned legacy automakers such as Honda Motor Co., Nissan Motor Co., Volkswagen AG, Toyota Motor Corp., Mercedes-Benz, BMW AG, Hyundai Motor Co. and Subaru Motor Co. are building vehicles in Ohio, Tennessee, Kentucky, Indiana, South Carolina, Georgia, Alabama and Mississippi. Startups like Lucid, Rivian, Nikola and Tesla Inc. are posted in Arizona, Illinois, California and Texas.
Michigan leaders say they’re pushing to attract continued investments to the state, and noted in December that there were four projects considering Michigan that could use the economic development funding.