How Orion Township Won Chevy Viva Production

by Edward Niedermeyer

Published: June 29th, 2009

how orion township won chevy viva production

Er, bought. According to the Freep, the Michigan Economic Growth Authority put together the $779 million tax credit package which secured Orion Assembly’s future as the home of the Chevy Aveo’s replacement. A 25-year, 100 percent tax abatement from the municipality of Orion Township (worth some $100 million) didn’t hurt either. Nor did Oakland County’s $136.5 million in retraining money. GM will drop $600-$800 million retooling the plant, “saving” some 1,200 jobs at Orion and another 200 at nearby Pontiac Stamping. But this decision wasn’t a simple dollars-and-cents deal, according to the the parties involved. Oh, no.

“Proximity to suppliers was a significant advantage, especially when it came to heavy materials such as axles and transmissions,” offers Rep. Gary Peters, by way of explanation to the outbid Wisconsin and Tennessee plants. “Let’s not forget about our membership that produced three No. 1 J.D. Power quality awards in recent years,” added Mike Dunn of UAW Local 5960 (Orion). “And the current (Pontiac) G6 and (Chevrolet) Malibu finished second and third in their segment in this year’s quality survey.” Yep. That must have been it.

“If they hire enough lower wage people, they can come within $100 to $150 of the cost of building a comparable car in China,” explains Sean McAlinden of the Center for Automotive Research. See, now we’re talking. And Shenzhen probably wouldn’t offer those kinds of tax breaks.

Edward Niedermeyer

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4 of 23 comments

D002 on Jun 30, 2009

"I have a hard time believing that people will rush to buy a small Chevy named after a brand of paper towels" It's named after a great English car (Ho ho ho): http://www.pebblesfromparadise.com/wp-images/blogimages/VauxhallVivaHA.jpg

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Mattstairs on Jun 30, 2009
“But the entire delegation (minus Rep. John Conyers, D-Detroit, who was conspicuously absent) managed to get together with GM officials...” Rep. Conyers' wife is going to jail, he was probably preoccupied with that. TonyJZX, you are right. That is essentially what GM and Chrysler are doing for other workers, with our tax money. It isn't "hillbilly math". We'd be better off giving money to entrepreneurs who could build new, innovative, progressive companies, rather than throwing it at GM and Chrysler. Complain about Sens. Corker and Shelby all you want. Everyone who advocated a managed bankruptcy last year was right. GM and Chrysler should have gone into Ch. 11 last December. Even with the same eventual government DIP financing and ownership, it would have saved billions for US taxpayers. One bad thing for Michigan about the auto bailouts - after the billions poured into GM and Chrysler, we can no longer complain that we don't get "our fair share" from the federal government. Actually, the weakness about the donor/recipient argument is that it confines benefit to one state. Do all Americans benefit from military installations in Alaska, North Carolina, etc? Yes. Do I benefit from tax dollars spent on highways in other states? Yes, since I buy stuff that travels on trucks that use those highways. "Communist" China? In name only. China is essentially following the East Asian capitalist model, heavy state guidance of the economy and authoritarian rule. Hopefully, like South Korea and Taiwan before them, they ditch the authoritarian rule and go democratic before long.

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U mad scientist on Jun 30, 2009
It isn’t “hillbilly math”. We’d be better off giving money to entrepreneurs who could build new, innovative, progressive companies, rather than throwing it at GM and Chrysler. The two kinds of spending is not the same. One is to create new industry, the other is to clean up toxic waste. It is great value? Hells no. But it's the way money moves around and has always moved around in washington. Just be glad the middle class got some benefit out of it. -- GM and Chrysler should have gone into Ch. 11 last December. Even with the same eventual government DIP financing and ownership, it would have saved billions for US taxpayers. They should've gone into 11 or some kind of serious reorg years ago, the earlier the better for taxpayers. Unfortunately that all efficient free market let it drag on until we're stuck with the bill. -- Do all Americans benefit from military installations in Alaska, North Carolina, etc? Yes That money is more often than not grabbed by their senator and congressmen, in large part to get local jobs. That's just how our political system works. I don't see how anyone can complain about michigan getting some money now when the southern states have been rolling in fed cash for ever. There's a republic for you, vote for a dictator if not satisfied, or better education system so people demand better than this crap.

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Windswords on Jul 01, 2009

John Horner: "It is ironic that Socialist-bashing conservatives have become big pro-China outsourcing advocates." Did I miss the memo? I'm a conservative, and I have never been in favor of outsourcing anywhere, let alone China. None of my conservative colleagues do either. Maybe you just hang out with the wrong conservatives. grog: "Plus, I wonder how many of the workers in this new plant will the newer, Tier 2 UAW types? Ie, the ones making no money." Since when did making, what, $14 an hour with bennies (which with OT will be $30,000+ a year)" become making no money"? Did I miss that memo too? agenthex: "It’s only pathetic when those same states then turn around and get a net surplus of federal money from other states." Really? Isn't that the model liberals like you advocate? From each according to his means to each according to his needs? Since you advocate taking from the "evil" rich and giving it to the poor, why would would you object taking money from the "evil" rich northern states and giving it to the poor southern or western states? The same model, no? I think yes. I hope you like your new socialist utopia. By the way I am enjoying those "evil" rich northern state dollars in my southern state. Hollywood is paying for my kids education. It's about time you paid your "fair" share!

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