Governor Gretchen Whitmer wants to be known for creating jobs in Michigan’s important auto industry. In October, she proudly stated: “Since taking office, we’ve announced more than 30,000 auto jobs, and counting.” But “announced” is different from “created,” and she goes back to previous claims that she has monitored actual employment growth.
Even worse, it ignores the fact that its measures to spend tax money on electric vehicle (EV) production are helping to destroy the very auto jobs that are supposedly so important to it.
In her four years in office, Whitmer led a series of layoffs at the three major automakers: General Motors, Ford, and Stellantis.
In August, two months after receiving a $100 million government grant to hire 3,030 workers to build electric vehicles, Ford laid off about 3,000 employees and said a “significant percentage” would be in Michigan. The state of Michigan paid Ford $100 million in tax money to exchange employees for workers.
GM laid off around 800 workers in Detroit three years ago, while Stellantis, which makes Chrysler vehicles, began reducing staff at various plants in Michigan over the summer. The layoffs are linked to individual companies’ efforts to increase electric vehicle production.
It doesn’t require as many workers to build electric vehicles, which basically means a stripped-down American auto industry. And that means fewer jobs.
If this were a market-oriented dynamic, there would be little to complain about. But it isn’t — it’s the government using tax money to subsidize vehicles that require fewer jobs to produce.
It’s one thing for a company to prioritize larger market opportunities, which may mean laying off workers in other areas. It is another way of reducing the size to meet political demands.
The Whitmer administration is following the example of the Biden administration in its efforts to get the auto industry in Michigan to produce more electric vehicles. Just last year, President Biden issued an executive order according to which 50 percent of vehicles sold by 2030 should be electric or carbon-free.
When it was announced, the Big Three supported this overly ambitious goal, but pointed out that it “can only be achieved if the full range of electrification measures committed to by the administration in the Build Back Better Plan are implemented in a timely manner,” including “incentives to expand electric vehicle manufacturing and supply chains.”
These incentives have grown beyond the federal government and are now coming directly from the hands of state taxpayers. In this Ford deal in June, Michigan granted another $50 million in tax exemptions for Ford’s electric vehicle plant in River Rouge.
Since taking office in 2019, Whitmer has invested well over a billion dollars in tax money to produce electric vehicles.
While Stellantis has mostly milked subsidies for electric vehicles in other states, such as Indiana, other companies still earn tax money.
Why are taxpayers forced to pay for the privilege of lost jobs and potentially unwanted electric vehicles, which have an average sticker price of $66,000?
These giveaways will all be sold positively in the future, but the downside is felt in the here and now. Layoffs are more real today than the hope for well-paid jobs tomorrow. Michigan already has half as many auto jobs as it did in 2000, the state’s recovery from the Great Recession has lagged behind the rest of the country, and investing billions of tax dollars in electric vehicle production will do little to bring those jobs back.
Job advertisements are somehow not being published. Giveaways for taxpayers are a bad deal. Nationwide, the agencies touted in subsidy announcements have a track record of never showing up, which partly reflects the uneconomic nature of giveaways for taxpayers.
If the promised electric vehicle jobs don’t arrive in Michigan, this will be the reality: These companies won’t work, even with the subsidies. Oops. We don’t have to keep learning this lesson the hard way.
Whitmer certainly knows this, given the history of failed green energy subsidies under one of her predecessors, Jennifer Granholm, the current US Secretary of Energy. But like many other supporters of giveaways for taxpayers, she also knows it won’t have any impact when it’s finally clear that tax money has been wasted.
Until taxpayers learn how these deals went, there will be no way to hold those who have stood up for them accountable. The conventional wisdom of reporters, pollsters, and political advisors will claim that “everyone has moved on.”
That’s why Michiganders and taxpayers across the country should be careful now. Grab the next one before it happens.
James David Dickson is Chief Editor of Michigan Capitol Confidential, one of the most important news stories of the Mackinac Center for Public Policy.