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Automotive Interests
Michigan is always associated with the automotive industry. Expanding on that, a 1997 study by the U.S. Bureau of Labor Statistics indicated that Michigan ranked 4th in the nation for high-tech industries employment. State officials point to the significance of this finding, since many of these high-tech industries have associations in the automotive industry as vehicles become more fully loaded with electronics. "We have felt for some time that the auto industry is unduly viewed as not being part of the so-called New Economy," says Doug Rothwell, president and CEO of the Michigan Economic Development Corporation (MEDC). A MEDC study, undertaken with the Michigan Automotive Partnership, found that 65,674 works in the auto industry alone are in high-tech occupations. Although the Southeast has stolen headlines lately for its involvement in this industry sector, Michigan remains the undisputed auto capital of the world. America's Big Three automakers operate over 80 major facilities in the state. More than 11,000 companies are involved in supplying technology or parts to the industry, and 500 R&D facilities are located in Michigan with 360 directly involved in industrial technology. Michigan is the R&D Center for the global automotive industry. These companies would not be located in Michigan if it weren't of the state's highly educated workforce, its transportation network, and its proximity to the Canadian market. On top of that, the state says it has in place over 425,000 miles of fiber optic cable. But key to Michigan's success is its pro-business environment.
Site Selection Magazine recently rewarded MEDC for its economic development efforts by designating it as one of the top 10 development agencies in the United States. A primary reason MEDC made the magazine's top 10 list was its success in attracting 2,174 major new projects to the state for a total investment of $21 billion.
One of the state's biggest announcements involves General Motors, which is building two plants outside of Lansing, representing an investment of approximately $1 billion. The factories are expected to add 2,800 new jobs. To help GM decide on the Michigan sites, a $284.6 million state incentive program was approved. The job creation tax credit is estimated to be worth $61.8 million over 20 years. The state will also offer job training assistance of $1,000 each for up to 2,800 retained jobs for a total of $2.8 million, and $4 million in funds for the Michigan Technical Education Center (M-TEC) to support this project. Construction on one of the plants began in January. The new Lansing Grand River (LGR) Assembly Plant is GM's first new assembly plant in the United States since beginning construction on the Saturn plant in Spring Hill, Tenn. in 1986. LGR will build the next generation Cadillac Catera and other luxury vehicles. GM is investing about $558 million in the project, including buildings and equipment. Production is targeted to begin in the fourth quarter of 2001, and the plant is projected to employ 1,500 people by its third year of operation. "Lansing Grand River gives us the opportunity to merge our best manufacturing processes from around the world," says G. Richard Wagoner, GM president and chief operating officer. "We'll apply what we have learned from benchmarking our competition, from working with our global partners and from operating our own facilities worldwide. The experience gained and the lessons learned from these projects will help make Lansing Grand River a truly world-class facility." To attract and retain other business in the state, MEDC is also encouraging technology industry growth by introducing a new research and technology fund designed to foster local creativity and leadership in Michigan's higher education institutions. The Emerging Technology Challenge Fund plans to grant $1 million per year for the next three years to help increase the number of development opportunities that arise from research and technology developed at Michigan universities. Michigan's Renaissance Zones also provide tax advantages for companies that locate in established tax-free areas. Nearly all state and local taxation is waived. Tax credits are attractive to companies wishing to expand or relocate in the state. A high-tech MEGA tax credit worth an estimated $1.9 million over 10 years; a Single Business Tax Credit, an abatement of the six-mill state education tax; and job training assistance valued at $59,000 were key factors in attracting BorgWarner Cooling Systems of Michigan's research and development facility to Marshall. The company selected Marshall over Indianapolis, Ind. "The Marshall facility will be part of BorgWarner's global technology network that gives us a competitive edge as a product leader in engine and transmission systems," says John McGill, president and general manager of BorgWarner Cooling Systems. MEDC incentives worth nearly $16 million over 14 years swayed Kmart Corp. to select Troy over Louisville, Ky., for its new high-tech development center. The $50 million center will spearhead the overhaul of corporate-wide information systems. In addition, $450,000 in job training assistance was offered to the retailer. Forest Health Services Corp. selected Ypsilanti over Sylvania, Ohio, for its new $20 million corporate headquarters. The national company received an estimated $3 million over five years in MEGA tax credits.
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