States are spending billions on electric vehicles in the fight to replace Michigan, the automotive capital

For as long as there has been the auto industry, Michigan has been the center of it. But now, the industry is clarifying that it is not bound by tradition.

The move to electric vehicles — a rapid rise in the price of fossil fuels and improvements in battery technology — is easily the biggest shakeup in the industry since mass production began in Michigan in the early 20th century. And it has jeopardized Michigan’s status as the nation’s automotive capital.

including startup heroinesupported rivian And winfast From Vietnam are spending billions to build factories in the Southeast – Georgia and North Carolina respectively. of korea Hyundai Is announced that it will set up shop in Georgia. Volkswagen Tennessee has a huge facility, and is looking to expand There.

But Michigan suffered a setback last year when one of its most prestigious companies — Wade – announced that it would spend $11.4 billion to build a construction complex that has been dubbed “Blue Oval City“In Tennessee, and a pair of battery plants nearby in Kentucky. The company says the expansion will create about 11,000 jobs.

A rendering of Ford’s $5.6 billion “Blue Oval City” campus in Tennessee.

Wade

“Nobody wants to see it, right?” Michigan Gov. Gretchen Whitmer said in an interview. “I mean, it was kind of a shock.”

Whitmer, a Democrat, and the Republican-controlled state legislature were shocked enough to agree in record time on a package of stimulus aimed at matching those deals, helping other states win over EV makers. For example, Georgia is distributing $1.5 billion in state and local incentives. North Carolina agreed to pay up to $1.2 billion to lure Winfast. Ford stands to collect $883 million from Tennessee and $250 million from Kentucky.

So, in December, just weeks after Ford’s blustery announcement, Whitmer signed a package of legislation including a new $1 billion stimulus fund For “Strategic Access and Attraction”.

If someone in Michigan is angry about having to invest that kind of money just to maintain an industry that already is, they’re not showing it.

Whitmer said, “It’s my job to make sure we have all the resources we can to focus, so that we can compete with companies that other states are trying to earn their investment on these companies.” Huh.”

of course, another native Michigan company, General Motorshappily took the bait.

In January, GM announced it would spend $7 billion Expand your electric vehicle business The state also includes a new battery plant joint venture With LG Energy Solutions of South Korea, and the expansion of GM’s electric vehicle production at its Lake Orion, Michigan, assembly plant. This work was to be done in Mexico.

In return, GM stands to collect about $1 billion in incentives, including $600 million from new stimulus funds.

“The future of mobility is very much happening in the state of Michigan,” Whitmer said.

The head of the state’s economic development arm said the new incentives will help bolster Michigan’s sales pitch as it tries to win more business.

“Michigan is a state that put the world on wheels, built Motown, made tremendous advances in the life sciences and medical devices. We are still in a state of invention,” said Quentin L. Messer, Jr., CEO said Michigan Economic Development Corporation,

But a site selection consultant, which says it has worked on several electric vehicle deals, warns that most of the big deals have already been done.

“I think we are at peak EV in terms of frenzy,” said Tom Stringer, managing director of site selection and incentive practice at BDO in New York. “I think you see it reflected in stock prices. The market is foaming off. Now, it’s ‘Prove it.’ Do customers want these vehicles? Can these manufacturers go and deliver on a large scale?”

Stringer said all states have been careful to structure their incentives, so companies must first create jobs before they can cash in.

“There is no giveaway in this industry, which is great from a taxpayer point of view,” he said.

Still, nonprofit group subsidy watchdog Greg LeRoy good jobs first believes that states are caught up in the hype to the potential loss of taxpayers.

“It’s understandable, the governor would want to get on the ground floor of the burgeoning industry, electric vehicles in the future.” But, he added, “by spending a billion dollars on a single facility, you’re not going to break even from a tax revenue standpoint.”

United Auto Workers in the EV Era

The Michigan organization with a major stake in the EV battle between the states is United Auto Workers.

“Our headquarters is here, we’re established here,” UAW president Ray Curry said in an interview. “We’re always going to advocate for Michigan. It’s always about the home team.”

Regardless, the union is still seeking to organize facilities in less union-friendly states. It has had some success, including Ford’s Blue Oval city complex. But most other plants, such as Rivian in Georgia, are non-federal.

There is no guarantee in Michigan either. GM’s battery joint venture, called Altium Cells, is non-consortium, at least for now. Curry vows to change that.

“This is a very important time for the UAW,” he said. “This transformation piece is about our future. It’s about 86-plus years of storied history.”

Messer, the state’s economic development officer, believes Michigan’s deep union history may have hurt the state because of what he said is a misconception among business leaders.

“Unions have focused a lot on talent development, workforce development, bringing youth into trades,” he said. “These are seriously important things that I think people don’t appreciate.”

Stringer said many companies are taking a fresh look at unions, no longer as strictly opponents, but also as sources of badly needed talent.

“I think the ability to get skilled workers, whether union or non-union, is important,” he said. “If the federalized states can show that value proposition, that if you hire our individuals, they are going to be better, faster, more effective in the long term, they are winning state projects.”