July 22, 2014 at 8:10 pm

Michigan tax breaks to spur GM, supplier expansions

Since 2009, GM has invested up to $2.8 billion in Michigan. (Getty Images)

General Motors Co. and several auto suppliers are ramping up investment in Michigan to the collective tune of hundreds of millions of dollars, and plan to create thousands of jobs after the Michigan Strategic Fund approved tax breaks for the companies.

GM says it could create up to 1,750 new jobs and up to $800 million in new investment in the state as the Michigan Strategic Fund approved Tuesday an amendment of the automaker’s global state tax credit. The amendment boosts the number of employees for which GM is able to receive tax breaks.

The amendment increases the number of jobs allowed for the state tax credit to 6,750 from 5,000 at GM’s Warren Technical Center. That indicates the new jobs are targeted for the Tech Center.

“The $800 million in new investment will be the result of upgrading various facilities in Michigan in anticipation of future vehicle platforms and programs,” according to a memo from the Michigan Economic Development Corp. to the Michigan Strategic Fund. “The 1,750 additional new jobs will be the result of the consolidation of various engineering functions from outside of Michigan to a site in Michigan.”

GM declined to disclose specific plans, but spokeswoman Heather Rosenker said in a statement, “GM’s prospects are bright, and we want Michigan to play an important part in the company’s growth. We are pleased with the state of Michigan’s action which makes a strong business case for potential future jobs and investment at GM facilities across Michigan.”

Rosenker said the investments and jobs would be new. She declined to say when the investments would be made, or when jobs would be added.

But GM has been working to consolidate engineering operations and it operates vehicle engineering centers across the globe. Then-GM CEO Dan Akerson, in a June 2011 Detroit News interview, questioned why the automaker had so many engineering centers around the world.

Rosenker wouldn’t comment on whether GM plans to move jobs from other engineering centers.

The company in 2013 announced it was investing $200 million to expand its Global Powertrain Engineering headquarters in Pontiac, bringing work done at several sites in Michigan and out of state to Pontiac. That consolidation led to about 400 jobs in Pontiac.

Warren Mayor Jim Fouts said Tuesday he was not aware of plans shift employment to the Tech Center, but said, “We want to do everything we can to make sure that General Motors continues to be a vital part of the city of Warren.”

Suppliers coming back

Auto suppliers were battered during the Great Recession and industry downturn, with dozens filing for bankruptcy and many suppliers being absorbed by bigger suppliers.

Many parts companies are struggling to meet expanded demand — and now are finally adding jobs and building new facilities. Nationally, auto suppliers have added 25,000 jobs over the past year, according to the Bureau of Labor Statistics.

Gov. Rick Snyder, in a telephone interview Tuesday, attributed some of the job creation and investment in Michigan to trade missions he has made to China, Italy and Canada. “It’s great overall to see the automotive industry come back ...,” he said. “We’re seeing good projects come to our state.”

GM now has 34,750 workers eligible for the tax credit, up from 33,000. Employees of its subsidiary, GM Subsystems Manufacturing in Brownstown Township who assemble battery packs for vehicles such as the Chevrolet Volt, now are eligible for GM’s global tax credit as long as they aren’t located at the Brownstown Township plant.

GM received a global retention MEGA tax credit in June 2009 that gives the automaker tax breaks worth more than $1 billion over 20 years. That initial credit included GM’s then-existing retention tax credits and the Orion Township plant, and up to a 100 percent retention employment tax credit for up to 20,000 employees. The credit at that time included 17 facilities. But it has been amended to also include GM’s Renaissance Center headquarters and development center at the Tech Center.

In 2012 it was amended to add 3,000 jobs in the state and an information technology innovation center in Warren.

The automaker is likely to invest at its Lansing Grand River assembly plant to produce the next-generation Chevrolet Camaro. GM announced in late 2012 that production of the muscle car is moving to Lansing from Oshawa, Ontario.

Other projects OK'd

The Michigan Strategic Fund also Tuesday approved other auto-related projects:

■A $2 million grant went to Brembo North America Inc., which said it plans to invest $100 million to build a cast-iron foundry in Albion Township, creating more than 250 jobs. Italian parts-maker Brembo SpA, which has its North American headquarters in Plymouth, will begin construction in 2015 and said some of the new jobs will in Plymouth. Brembo will get $1.5 million in Community Development Block Grant funds for job training.

■A $2.25 million grant went to H.A. Automotive Systems Inc. The subsidiary of automotive lighting supplier Shanghai Changhui Industry Development Ltd. is based in China. It plans to invest $28.8 million in Troy and create 368 jobs. H.A. Automotive plans to buy a building on Coolidge Road in Troy for its North American headquarters.

■It amended YanFeng USA Automotive Trim Systems Inc.’s state tax credit and added a Warren location for eligible jobs for the credit as YanFeng plans to invest up to $56.2 million and create 519 jobs in Harrison Township. The supplier, which expects to double North America production between 2016 and 2017, plans to buy the Harrison Township building, according to the MEDC.

■The fund approved a brownfield plan from the Oakland County Brownfield Redevelopment Authority valued at $2.93 million to capture local and state taxes on behalf of Challenge Manufacturing Co.’s new assembly plant in Pontiac. The Detroit News reported in May the Walker, Mich.-based company planned to spend up to $50 million to build a components assembly plant on a site at the former General Motors Pontiac East Assembly Plant, creating up to 450 jobs.

The Michigan Strategic Fund in May approved a $2.5 million grant for the project. The state Tuesday awarded the company a $2.3 million grant for its planned investment of $65.5 million for a plant in Watertown Township in Clinton County, expected to create 420 jobs.

■Increased a grant by $507,000 for Magna Exteriors and Interiors USA Inc., which in January received a $822,000 state grant for $3.6 million in expansions in St. Clair and Benzie counties. The expansion created the expected 274 jobs and 169 more have been hired.

Staff writer David Shepardson contributed.