CEOs urge lawmakers to pass incentive legislation
Two prominent Detroit area business leaders are urging state lawmakers to quickly pass state incentive legislation to help Michigan land a new Foxconn plant and the thousands of jobs tied to it.
Gerry Anderson, chairman and CEO of DTE Energy, and Matt Simoncini, president and CEO of Southfield-based automotive supplier Lear Corp., said Thursday that the state needs strong tax incentives to woo businesses such as Taiwan-based Foxconn Technology Group, which manufactures the Apple iPhone. The two made the comments during the Michigan Chronicle’s Pancakes & Politics event.
Simoncini said while he knows there is concern over the past use of incentives in Michigan, the state needs them to land big developments.
“If we get a company like Foxconn to come in here, that’s going to be here for a like a long time,” he said. “We’ve got to get it done. We need to demand it gets done.”
Foxconn is considering a $4.2 billion liquid-crystal screen factory that could employ about 5,200 people, according to documents circulated among state legislators. Gov. Rick Snyder and Detroit Mayor Mike Duggan traveled to Japan less than two weeks ago to meet with the company. Wisconsin also is in the running for the Foxconn plant.
The House Tax Policy Committee held a Wednesday hearing on the legislation — which would allow companies creating new jobs in the state to capture personal income tax revenue associated with new hires — but did not vote on it. The plan cleared the Senate in a 32-5 vote in March.
The committee has a meeting scheduled Thursday after session.
Anderson said the Foxconn manufacturing plant would diversify the local economy. He said other states use tools and incentives to attract businesses.
“I know we had a bad experience with incentives in Michigan. We need to figure out how to do that the right way...,” Anderson said. “Wisconsin’s put $100 million on the table and Lansing has got to figure out, in committees, whether we’re even willing to talk about it. The long-term benefits of that facility are huge and we need to figure out where we’re going to play in terms of tools to attract development.”
Gov. Rick Snyder and lawmakers were forced in early 2015 to make more than $400 million in midyear budget cuts to fill a shortfall caused by an unexpected surge of companies cashing in tax credits, which the state no longer offers but businesses can redeem through 2032. Michigan owes an estimated $9.38 billion from Michigan Economic Growth Authority credits, according to a 2015 state analysis that will be updated this fall.
Cindy Pasky, CEO and president of Detroit-based Strategic Staffing Solutions, and entrepreneur William F. Pickard, founder of Global Automotive Alliance LLC, an automotive logistics company which recently opened its headquarters in Detroit, also talked about the need for job creation in Detroit. They said it’s key to helping turn around the city and its neighborhoods.
Anderson, Simoncini and Pickard agreed the state needs to provide a one-stop shop for potential investors and businesses to use to cut through the red tape, something other states and countries provide.
“We don’t have our act together on regional economic development,” Anderson said. “We’re too fragmented and competitive.”
Simoncini also said the country and state need tax reform to spur investment. He said businesses in the state are highly taxed. “ Whether you have incentives or not, the ongoing tax structure is not competitive. I think we need to address that.”
Snyder said Tuesday he was in Japan for “dinner and a day” to discuss a pending trade deal. The governor did not say more, citing nondisclosure agreements.