The state of Michigan has committed nearly $2.1 billion in direct tax dollars to support massive manufacturing projects, but few of the jobs promised through the three-year-old cash-for-jobs fund appear to have come to fruition, according to the businesses that received the money.
Many companies contacted by The Detroit News — including General Motors Co. and Ford Motor Co. — would not say how many, if any, jobs had been created so far thanks to the incentives they have been approved to receive through the Strategic Outreach and Attraction Reserve fund. Others said it was still too early. And, for some, job numbers are harder to gauge when it comes to site preparation money distributed for an eventual unnamed project.
Even as Michigan officials wait on thousands of promised jobs, lawmakers are expected to be asked during the lame-duck session this month to support another giant state incentive for an unnamed semiconductor manufacturer in Mundy Township.
But the votes needed for the appropriation aren’t given in a Legislature doubtful of the program’s success rate — a perception that may have been exacerbated by a GM announcement Monday that it would sell its stake in a battery plant project still under construction that was the flagship of the Strategic Outreach and Attraction Reserve (SOAR) program.
In addition, Republican House Speaker-elect Matt Hall — who helped develop the SOAR program — has introduced a plan to shift tax dollars that currently support SOAR and direct some of them toward roads instead.
The Strategic Outreach and Attraction Reserve fund was created by the then-Republican-led Legislature and Democratic Gov. Gretchen Whitmer in 2021, three months after Ford announced an $11 billion investment, along with 11,000 jobs, for plants in Kentucky and Tennessee. The development took state officials by surprise and spurred state leaders to develop a program to retain and attract similar projects.
The SOAR program is funded through appropriations by the full Legislature — many of whose lawmakers have either signed nondisclosure agreements or voted for funding blind to the intended recipient — and is used by the Michigan Economic Development Corporation to lure large-scale economic development projects with incentives. The performance-based grants are divided into two program buckets: Strategic Site Readiness Program dollars to help assemble and prepare a mega site where a company could locate and Critical Industry Program funds used as direct incentives to reward a company for locating in Michigan.
The transfer of money from the SOAR budget and into the Strategic Site Readiness Program bucket or Critical Industry Program bucket requires approval from both the House and Senate appropriations committees, whose members are aware of the intended recipient when the transfer is approved.
The appropriations committees have made nine transfers totaling nearly $2.1 billion since 2022 and have another three projects totaling $267 million pending.
SOAR generates criticism
The SOAR program has been rife with controversy as lawmakers have questioned the incentive effort's efficacy, expressed concerns over public dollars going toward private ventures, and complained about the secrecy surrounding the projects.
Instead of relying on a designated revenue stream for SOAR that is controlled by a select group of lawmakers sitting on the appropriations committees, Whitmer's MEDC should have to make a public, transparent request for each project to the full Legislature, which then can decide on whether funding is appropriate and available, Hall said.
"They need to make that case on individual projects. Not in secret. And not with a select group of members," said Hall, referencing the NDAs associated with the projects.
"We have to set priorities," the Republican House leader added. "That's what this government has been missing the last two years especially. I'm just saying roads are a higher priority than giving the money to corporations."
Hall isn't alone in his reservations about the program.
Sen. Mallory McMorrow, D-Royal Oak, voted for the bill that created SOAR in December 2021, but she has since called for diverting a portion of the corporate income tax revenue that flows to the fund toward community-focused investments instead.
Asked if SOAR had been a success, McMorrow answered no.
Michigan currently has more job openings than people to fill them, and the state shouldn’t simply measure the performance of an economic development incentive based on how many jobs were created, McMorrow said.
Over the last two decades, Michigan has been passed by more than 20 states in the personal income per capita rankings. The state ranked 39th highest at $61,144 in per capita personal income in 2023, according to the St. Louis Federal Reserve. A report released by the group Business Leaders for Michigan in November ranked Michigan 35th among the 50 states for the percentage of residents with a higher education degree or certificate.
SOAR was “reactionary” and created quickly, McMorrow said.
“It missed out on something that could have been really great, especially given the amount of money,” the Democratic senator said.
McMorrow chairs the Senate Economic and Community Development Committee, which plans to take testimony later this week on bills to require the state to develop a 10-year strategic plan. The goal would be to create a comprehensive, long-term vision and approach for the state, according to a website McMorrow created in support of the legislation.
James Hohman, director of fiscal policy for the free-market research nonprofit Mackinac Center for Public Policy, said SOAR had provided money for a dozen or so projects, but the state hadn’t reported the initiative had created jobs.
“They promised hundreds of millions of dollars upfront, and these deals rarely ever work as advertised,” Hohman said.
The program's job creation defended
Defenders of the program have touted construction jobs spurred by state funding and argued the lack of permanent jobs is because many of the industrial sites are still under construction.
The Critical Industry Program alone has generated $3.4 billion in actual investment to date through the roughly $538 million in incentive money released so far through the Critical Industry Program, according to the MEDC, a quasi-governmental economic development agency.
"The MEDC’s No. 1 goal is to create good-paying jobs and opportunities throughout Michigan," said Danielle Emerson, a spokeswoman for the MEDC. "We remain committed to doing that by investing in our people, supporting and revitalizing places, and securing projects of all sizes."
Jeff Donofrio, the former director of Michigan’s Department of Labor and Economic Opportunity in Whitmer’s administration, said the SOAR program was put in place in 2021 when the state simply wasn’t competitive for some of the major projects in the auto and the semiconductor industries.
Since then, SOAR has been used to win investments, contended Donofrio, who’s now the president and CEO of the organization Business Leaders for Michigan, which advocates on behalf of some of the state's largest corporations.
SOAR is a tool, like other incentive initiatives, that can be used to provide money to close deals with companies, he said.
“We want to have them in our toolbox, but we want to have a state that has such a strength in talent, has such a strength in communities and infrastructure that we can do less with incentives every year moving forward,” Donofrio said.
Here is where those active projects stand:
SOAR Projects
∎ General Motors in Delta Township: $666 million
In March 2022, the House and Senate appropriations committees signed off on $666 million in incentives for General Motors' electric vehicle projects. The deal included $66 million from the Strategic Site Readiness Program and $600 million through the Critical Industry Program.
The funding was meant to partly subsidize a $6.5 billion investment by GM, in which the Detroit automaker planned to spend $4 billion at its Orion Township assembly plant to transition it to all-electric pickup production and $2.5 billion to build a battery plant in the Lansing area through a joint venture with LG Energy Solution, a South Korean battery maker. The two projects were expected to create between 3,200 and 4,000 jobs.
GM's project was one of the first to receive SOAR funding following the 2021 passage of the law establishing the program.
Orion Assembly, where GM is hoping to transition from the Chevy Bolt to an electric pickup, has been idled for more than a year. But vehicle assembly operations are expected to restart there in mid-2026, GM spokeswoman Colleen Oberc said.
GM announced Monday it would sell its stake in the Ultium Cells LLC battery plant planned for Lansing to its joint-venture partner LG Energy Solution. The MEDC indicated the change would not affect the incentives since LG is expected to create the same number of jobs.
The MEDC did not answer additional questions Tuesday about which company the remaining incentives would be disbursed to.
GM has tapped into SOAR funding for the project, but Oberc wouldn't say how much. Nor would she say where GM was at in meeting its jobs benchmark.
"We'll share an update on employee numbers at both sites closer to the start of production," Oberc said.
∎ Our Next Energy in Van Buren Township: $200 million
Novi-based Our Next Energy (ONE) received $200 million in Critical Industry Program funds in October 2022 to supplement a $1.6 billion investment in a battery manufacturing plant in Wayne County's Van Buren Township. The project was expected to create 2,112 jobs.
The company also received a $21.6 million State Essential Services Assessment Exemption and a $15 million Jobs for Michigan Investment Fund loan.
Since then, the company has been beset by leadership changes and layoffs. In 2023, ONE laid off a quarter of its staff and appointed a new CEO; in 2024, the company further reduced its staffing, including 24 jobs in Michigan. The March layoffs left the Michigan workforce at about 240 employees, with a total of 270 nationally.
The company would not say how many of the 2,112 promised jobs had been created, nor would it say how much SOAR funding it had received so far from the state.
"ONE has received some SOAR funding from the state of Michigan to support the build-out of its battery cell factory and will continue to do so as long as the company meets all of the agreed-upon benchmarks for the facility, which is scheduled to be completed and at capacity by 2027," said Dan Pierce, vice president of communications for ONE.
∎ Muskegon Wastewater Pipeline Project: $60 million
In late 2022, state officials approved a $60 million grant for a wastewater infrastructure project in the Muskegon area that several food-processing businesses in the area said were needed to expand their operations in West Michigan.
The funding would help pay for the construction of a wastewater line between Coopersville in Ottawa County and the city of Muskegon's under-capacity wastewater treatment plant in Muskegon County.
Applegate Dairy and Swanson Pickle in Ravenna and Continental Dairy, DeVries Meats, and dairy giant Fairlife in Coopersville plan expansions of their food and dairy processing capabilities once the wastewater pipeline is built. The businesses said they would make a combined investment of at least $187 million and create 145 new jobs.
The project was expected to be completed in 2025.
Officials broke ground on the 20-mile sewer main and pump station connecting Coopersville to Muskegon in October, said Matthew Farrar, deputy administrator for Muskegon County. Farrar said the project has received a first tranche of about $20 million from the state so far, as well as a $5 million investment from Fairlife, a division of beverage giant Coca-Cola Co.
The overarching business investment and the jobs it will create aren't expected to be made until after the sewer main is complete.
"Once the line is online, then the new jobs will come," Farrar said.
∎ Ford BlueOval Battery Plant in Marshall: $261 million
In February 2023, Ford announced plans for the BlueOval Battery Park in Marshall and said it would license battery technology from China-based Contemporary Amperex Technology Co. Ltd., or CATL — the world's leading lithium iron phosphate (LFP) battery maker.
Initial plans for the project included a $3.5 billion investment to build the first automaker-backed lithium iron phosphate battery plant in the U.S. The plant was expected to be complete in 2026 and create 2,500 jobs.
The project initially received a $210 million critical industry program grant and a renaissance zone designation worth $772 million in tax breaks over 15 years. The state also funneled $120 million through the strategic site readiness program and made a $630 million direct appropriation outside the SOAR process to finance site prep and infrastructure for the new plant near the interchange of Interstates 69 and 94.
Ford paused Marshall project construction in September 2023 amid the United Auto Workers' strike until the Dearborn automaker was confident of its "ability to competitively run the plant."
In November 2023, Ford announced it would resume construction but scale back its expected gigawatt capacity by about 43% and decrease the number of jobs from 2,500 to 1,700. The overall expected investment decreased from $3.5 billion to between $2.5-$3 billion.
The MEDC, in response, reduced Ford's incentives from $210 million in Critical Industry Program dollars to between $141 million and $166 million in CIP money. All told, SOAR funding is expected to be at least $261 million.
Ford is still planning a 2026 start for the production of lithium iron phosphate batteries and has received none of the critical industry program dollars from the state so far, Ford spokeswoman Lucy Hough said.
Hough said the automaker has begun hiring the leadership team at BlueOval park but will not begin hiring hourly workers until 2025. Hough would not say how many employees had been hired.
∎ Gotion in Green Township: $175 million
Battery parts manufacturer Gotion announced its plans for a $2.4 billion battery parts plant near Big Rapids in October 2022. The investment was expected to create 2,350 jobs.
The project was approved for about $125 million in critical industry program funds and $50 million in strategic site readiness funds. Additionally, the project is slated to receive $636 million in tax abatements over 30 years.
Gotion, by far, has been the most controversial project to receive funding through SOAR. The project stoked concerns about the secrecy surrounding the industrial development process, potential environmental impacts, and the company's link to China. Those concerns led to the recalls and resignations of all of the Green Township board members in 2023.
The company was founded in China in 2006, but its U.S. subsidiary has been incorporated in California since 2014.
Gotion's leadership kept a low profile during the presidential election cycle, where the Gotion plant became a focus of President-elect Donald Trump's criticism of EV policy.
Gotion has six employees in Michigan so far and has yet to hit any benchmarks to trigger a release of Critical Industry Program funding from the state, said Chuck Thelen, vice president of North American manufacturing for Gotion Inc.
Gotion is focused on securing the needed state and federal permits, Thelen said.
"We have been laying low because the political cycle has been unbearable," Thelen told The News. "Now that the noise is going and the election is over, then let’s move forward with giving 2,350 people a good-paying job.”
∎ Thomas Township infrastructure grant for Hemlock Semiconductor expansion: $27 million
State officials in September 2022 signed off on a $27 million strategic site readiness program grant for Thomas Township and Saginaw Township, near Saginaw, to help build out infrastructure for an expansion of Hemlock Semiconductor Operations.
Hemlock Semiconductor was planning a $375 million investment it said would bring 170 new jobs to the site. The project also received hundreds of millions of dollars in federal funding.
For the expansion to occur, the township, in coordination with Saginaw Township, had to expand sanitary sewer capacity, including the construction of two new lift stations and five miles of sewer mains.
The project is about 96% complete, "with spring cleanup and yard restoration the only remaining work to be finished in 2025," said Deidre Frollo, manager of Thomas Township, which received its portion of the $27 million state grant.
∎ Ford Motor Co. in Dearborn: $100.8 million
In June 2022, Ford pledged to invest $2 billion in five existing Metro Detroit manufacturing facilities and create 3,200 jobs.
Ford was approved for $100.8 million in taxpayer funds.
Ford met previously approved objectives for total investment and overall job creation, but the company fell short of expected job creation, specifically at the Rouge Electric Vehicle Center in Dearborn after becoming a one-shift operation there in April in response to less-than-anticipated consumer demand for the all-electric F-150 Lightning truck.
As a result, Ford and the MEDC agreed to forgo the $100.8 million critical industry program grant.
Ford did not respond to a request seeking comment regarding the status of the project.
∎ Mundy Township mega site (Project Grit): $250 million
In June, the Legislature approved about $250 million in strategic site readiness program funding to prepare a Genesee County megasite for an expected semiconductor facility project code-named Project Grit.
The grant helped to purchase properties to assemble a more than 1,000-acre property in Mundy Township near Bishop International Airport.
Whitmer is expected to announce a major semiconductor manufacturing facility for the area before the end of the year. That project is expected to require significantly more in-state incentives, but no formal requests have been advanced.
On Monday, Flint & Genesee Economic Alliance Executive Director Tyler Rossmaessler said the group had purchased nearly 1,100 acres and is "continuing to gain more control every day." Rossmaessler would not say how much the group had spent so far of its $250 million grant.
"We aren’t getting into specifics because it may compromise our ability to get the fairest value for property owners while being fiscally responsible with taxpayer dollars," Rossmaessler said in a statement.
∎ Megasite prep funding: $250 million
In June 2023, the state House and Senate appropriations committees approved the transfer of $250 million in strategic site readiness program funds for a variety of local economic development efforts.
The money went toward local and regional economic development groups that used it for the development of megacities and site assessments and improvements without an end user in mind.
In January, about 18 different smaller-scale projects across the state were awarded funding through the $250 million transfer.
Additionally, the grant was used to fund about $5.95 million for an Eagle Township mega site to assemble property through options and purchase agreements and perform environmental due diligence work to determine the feasibility of the site.
No property was ever purchased. State and local economic developers eventually scrapped plans for the land after the township adopted a new master plan this year that excludes industrial use.
Pending SOAR projects
∎ Dow Chemical in Midland: $120 million
The Michigan House and Senate appropriations committees are considering a request to transfer $120 million in critical industry program funds for a modernization effort by Midland-based Dow Chemical.
The incentives are meant to secure a $785 million investment in Michigan for Dow's research and development operations and the modernization of an industrial park.
The project will not yield new jobs but help to retain 5,000 jobs in Midland and Williams Township in Bay County, the company told lawmakers in September. The project marks the first time the SOAR fund has been used solely to retain jobs rather than to create new ones.
∎ Copperwood Resources Inc. in Gogebic County: $50 million
Copperwood Resources Inc. is asking the state House and Senate appropriations committees to approve the transfer of roughly $50 million in strategic site readiness dollars for a copper mining project in the state's Upper Peninsula.
The company's roughly $425 million investment in Wakefield and Ironwood townships in Gogebic County would create about 385 jobs and is expected to aid growing electric vehicle production.
The state incentive request has been greeted by public support and opposition, with those in opposition raising concerns over environmental and health effects.
Copperwood Resources Inc. is a subsidiary of Highland Copper Co. Inc., a Brossard, Quebec-based copper development company founded in 2006.
∎ Corning Inc. in Richland Township: $97 million
Corning Inc. is asking the House and Senate appropriations committees to transfer roughly $68 million in critical industry program funding for a planned $900 million solar component manufacturing facility expected to create 1,151 jobs in Saginaw County.
The appropriations committees are also being asked to transfer $29 million in strategic site readiness program funding to Thomas Township for the township to expand its infrastructure to support the project.
The facility planned for Richland Township would manufacture a range of solar components and be wholly owned by Corning subsidiary Solar Technology, LLC.
The Solar Technology facility would be located next to Hemlock Semiconductor's operation in Thomas Township. Hemlock Semiconductor, whose expansion also received SOAR incentive money by way of Thomas Township, was established through a partnership between Corning and Midland-based Dow Chemical.
eleblanc@detroitnews.com