Undeterred by alternative technology vehicle industry setbacks and the sluggish consumer adoption of electric vehicles, Gov. Gretchen Whitmer and the Michigan Economic Development Corporation continue to write taxpayer-funded checks to meet zero-emission goals and create jobs in the state.
The governor announced Tuesday that the MEDC’s Michigan Strategic Fund approved a $10 million performance-based grant for Scout Motors’ new research and development facility in Novi. Scout is an independent automotive manufacturer “making the next generation of all-electric trucks and rugged SUVs for American drivers,” backed by Volkswagen and based in Virginia.
“We’re thrilled to welcome Scout Motors’ new R&D facility to Michigan, creating 200 good-paying engineering jobs right here in Michigan,” Whitmer said in a statement. “Winning this investment proves that Michigan offers the best opportunity for automotive companies – from R&D to manufacturing.”
For its part, Scout Motors will invest $11 million of its own capital.
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“The MEDC grant to Scout Motors is intended in part to support the company’s recruitment efforts,” Center for Economic Accountability President John Mozena told The Midwesterner. “If I ran an existing automotive engineering firm in Metro Detroit, I’d be pretty unhappy that my tax dollars would support another company’s efforts to hire away my most mission-critical employees.”
Mozena told The Midwesterner no private-sector investment advisor would recommend investing nearly 50% of the funds for such a risky venture.
“Gov. Whitmer and other politicians love to use the language of ‘investment’ to describe what they’re doing with taxpayer dollars,” Mozena said in an email to The Midwesterner. “But no private-sector investment advisor or portfolio manager would ever follow Michigan’s strategy of throwing good money after bad by doubling down on the automotive industry like this,” he said.
Mozena and CEA last week dubbed the Ford Motor Company’s BlueOval EV battery plant in Marshall “the worst economic deal of 2023.” That deal, since scaled back significantly, put Michigan taxpayers on the hook for $1.7 billion for the proposed $3.5 billion plant. As the BlueOval project currently stands, it will cost the manufacturer $2.2 billion. Additionally, Ford and the Whitmer administration boasted BlueOval would create 2,500 jobs. That number has been reduced to 1,700 jobs.
Additionally, EV battery storage company Our Next Energy received $236 million of MEDC funding for its $1.6 billion plant, but laid off 25% a battery storage company laying off 25% of its staff.
“There’s no good evidence that these subsidies do anything meaningful to move the state’s economy, but even if they did the answer wouldn’t be to keep putting all of Michigan’s eggs in the automotive industry’s basket,” Mozena said. “Rather, a real investment advisor would be telling Michigan to diversify and reduce its exposure to another ‘single-state recession’ like it saw in the early 2000s.”
Oakland County is providing a $150,000 grant in support of the project.
“This investment is the result of Michigan leading the way in the transition to electric vehicles, and Novi is a premier destination for the future mobility sector,” state Rep. Kelly Breen, D-Novi, said. “Michigan is open for business, and this announcement is further proof. Thank you to Governor Whitmer and Scout Motors for bringing these new, high-paying jobs to Novi.”
On Monday, a planning memo from Ford Motor Company indicated the company was cutting production of its Ford Lightning 150 EV by 50% in 2024 because of “changing market demand.”