The first expansion involved Michigan losing out on Ford’s $11.4 billion Electric Vehicle investment as well as the creation of 11,000 jobs. It went to two states: Tennessee and Kentucky.
If the sting of that loss wasn’t enough to open our eyes to the need for a comprehensive economic development strategy, we learned that another deal for expansion by Leprino Foods of Remus; the largest manufacturer of mozzarella cheese is going to Lubbock, Texas and it meant losing out on $870 million in investment and 600 jobs. The company had ample room to put the expansion in Michigan, but the state’s economic development tools didn’t even come close to competing.
The stark reality is that Michigan needs a comprehensive economic development strategy including investing in large site development, developing skilled labor and enacting smart economic incentives that spur job growth. New economic tools, like the Michigan Employment Opportunity Program (SB 615 & 623), are critically needed to succeed as regions and a state.
In the Michigan Senate Economic Development Committee, Saginaw Future was one of several organizations testifying. The remarks are worth reprinting:
In the early 1990’s General Motors was considering an investment at its Willow Run Assembly Plant near Ypsilanti and another in Arlington, Texas. There was basically an eight-week competition with Winner-Take All.
GM wasn’t looking for state incentives and Michigan’s Governor John Engler, believed that if he lowered taxes (which he did 21 times from my recollection), OEM’s like GM would invest here.
But Texas, which at the time was led by Governor Ann Richards, offered $30m in incentives and almost 30 years ago, GM decided to keep Arlington open and close Willow Run, eliminating 4000 high-paying jobs – and all during a recession. And Texas has never looked back. They are consistently the #1 state for new investment and job creation projects.
And if you knew John Engler, you might recall that he is quite the competitor. Although he reduced taxes and business regulations, he realized that if Michigan wanted to compete, it needed to get in the state incentive race.
He teamed up with the legislature and established the most lucrative tax incentive programs in the Country including the Michigan Economic Growth Authority, Brownfield Tax Credits, OPRA (tax freeze), Renaissance Zones, (which I can tell you, is the most important thing that helped propel Saginaw’s Riverfront)- and he formed the Michigan Jobs Commission – which transitioned into the MEDC.
And Michigan won the Governor’s Cup from Site Selection Magazine an unprecedented 4 years in a row as the #1 state in the nation for new investment and job creation.
Here’s what the Magazine Said:
“When a state wins the Governor's Cup competition four years in a row, it's obvious that the state's economic development efforts are paying off. Many of these efforts -- cutting taxes, investing more money into business retention and expansion, adopting a decidedly pro-business stance in legislation -- were spearheaded by Michigan Gov. John Engler.
Interestingly, at that time, General Motors had not built a new assembly plant in the U.S. in more than 14 years. In 2000, GM announced the development of two new assembly plants within 15 minutes of each other in the Lansing, Mich., area totaling $2b in new investment and the creation of thousands of new jobs.
So where are we today? We have very few incentive programs, we don’t have the necessary support for assembling and developing large Shovel Ready Sites and as a result, we just experienced one of the biggest losses in our state’s history.
Please take a lesson from our history. We have been here before, and we found a way to work together to become the #1 state in the country.
The Saginaw County Chamber of Commerce is supporting SB 615 & 623. We urge our state elected officials to support this common-sense legislation to help Michigan compete.
Veronica Horn, President & CEO, Saginaw County Chamber of Commerce