Michigan Small Car Assembly Bid "Loss Leader"
UPI reports on recently-released documents which detail the extent to which states went to secure GM’s recent compact car manufacturing contract. Wisconsin had committed “$213.14 million in concessions from United Auto Workers Local 95, $100 million in Enterprise Zone tax credits and $24 million in discounts from health insurers and providers,” according to the report. Another $100M was added to the incentive package after Wisconsin officials learned that it was falling behind in the bidding, bringing the total package to $409M. Which wasn’t even close to enough to beat out Michigan’s winning bid, which totaled $1B.
Yes, that’s one billion dollars from Michigan’s less-than-swollen tax coffers for the right to assemble next-generation Aveos (presumably) at Orion Township instead of Wisconsin’s Janesville or Tennesse’s Spring Hill plants. “Definitely, it’s going to be a loss leader for them,” Wisconsin Deputy Secretary of Commerce Aaron Olver says of Michigan’s billion dollar baby. “These types of offers have to be grounded in some kind of economic reality . . . You see numbers that big — you just know they don’t pencil out in terms of a return to the treasury.” Ya think?
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