General Motors is selling its ownership interest in a Delta Township electric vehicle battery plant that is funded in part by the largest taxpayer incentive package in state history.
“General Motors is demonstrating, once again, a troubling pattern of fleecing Michigan taxpayers and workers,” Michigan House Speaker-elect Rep. Matt Hall, R-Richland Twp., said in a statement. “Cutting a side deal to pull out of Michigan and keeping taxpayer money is egregious, especially as they continue to kill family sustaining jobs in the process and seek taxpayer support to redevelop the Renaissance Center.”
GM announced Monday it reached a non-binding agreement with it’s joint venture partner, South Korea-based LG Energy Solution, to sell its stake in the Ultium Cells LLC battery cell plant near Lansing in the first quarter of 2025.
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The plant, which is nearly complete, is subsidized by Michigan’s controversial Strategic Outreach and Attraction Reserve Fund, accounting for two-thirds of the initial $1 billion set aside by lawmakers for taxpayer-funded incentives in 2022.
The widely celebrated deal includes $186 million in subsidies for the Ultium Cells plant, along with another $480 million for GM to expand its EV factory in Orion Township, and $158 million in tax incentives.
Taken together, the package represented the biggest taxpayer-funded business incentive in state history, Bridge Michigan reports.
GM promised to invest $7 billion, create 4,000 jobs and retain another 1,000 as part of the deal.
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The state’s second-largest company said Monday the Ultium Cells Lansing facility currently has nearly 100 employees and “remains on track to meet its previously announced employment goals.” The announcement stated GM intends to recoup its investment in Lansing.
“Our EV profitability is rapidly improving thanks in part to our strategic decision to build battery cells in the U.S. with LG Energy Solution. It will be years before some of our competitors approach this level of performance,” said Paul Jacobson, GM executive vice president and CFO. “We believe we have the right cell and manufacturing capabilities in place to grow with the EV market in a capital efficient manner. When completed, this transaction will also help LG Energy Solution meet demand by leveraging capacity that’s nearly ready to come online and it will make GM even more efficient.”
Ultium Cells operates plants in Ohio and Tennessee that currently power GM EVs including the Chevrolet Silverado EV, GMC Sierra EV, Cadillac LYRIQ, Chevrolet Blazer EV, Chevrolet Equinox EV, and GMC Hummer EV.
GM said it will continue to rely on those facilities to supply its battery needs and the decision to sell its stake in Lansing will not change it’s ownership interest in Ultium Cells.
“LG Energy Solution will have immediate access to the nearly completed Lansing facility to begin the installation of equipment,” the GM statement read.
The Monday announcement follows just two weeks after GM laid off 1,000 employees, including 507 salaried and hourly employees at its Global Technology Center in Warren amid waning interest in EVs.
Last week, GM unveiled plans to renovate the Renaissance Center it co-owns with billionaire Dan Gilbert’s Bedrock Detroit development firm that assumes taxpayers will cover $250 million of the $1.6 billion plan.
After several state lawmakers on both sides of the political aisle balked at the $250 million ask, GM officials this week threatened to tear down all five towers at the Renaissance Center if the project doesn’t secure taxpayer support.
“Sadly, and for far too long, Michigan’s leaders have bent over backward to pay taxpayer money to appease GM. For a while, I have questioned GM’s commitment to our state, and this latest development solidifies those concerns,” Hall said of GM reneging on its commitments in Lansing.
“Someone has to finally put the taxpayers and Michigan workers first, not sell out to big corporations making billions in profits,” he said. “These bad deals leave us all twisting in the wind, and our government leaders should ensure GM not only honors its current deals but also demonstrates a real commitment to Michigan to reflect that reality. Simply put, if these are not GM jobs, the company should give back all the taxpayer money.”
GM’s decision to sell its stake in Ultium Cells plant in Lansing is only the latest incentive deal inked by Gov. Gretchen Whitmer to fall flat. This summer, officials with the Michigan Economic Development Corporation was forced to cut $1.03 billion in incentives for the company to build a BlueOval EV battery park near Marshall by 60% when the state’s largest company reduced it’s investment and job projections for the facility.
Another secretly negotiated $715 million incentive package for Gotion, Inc. to build an EV battery component plant near Big Rapids remains mired in litigation and opposition from locals and Republican lawmakers concerned about the company’s close ties to the Chinese Communist Party.
Whitmer’s office referred questions about GM’s decision to sell out in Lansing to the MEDC, and spokesman Otie McKinley told Bridge the incentive package remains on track despite the sale.
“The commitment to move forward with the Ultium facility in Delta Township remains, including the thousands of good-paying, permanent jobs it will bring to the community,” McKinley said.
Whether that changes, and whether the jobs actually materialize, remains to be seen.
Republicans regain control of the Michigan House in January, and many have called to reform the SOAR incentive fund. A Bridge analysis shows that with the first $1 billion in business incentives for EVs spent through June, only 200 jobs, or less than 2% of jobs promised, have come to fruition.
The EV industry, meanwhile, continues to sputter.
New EV sales in the U.S. are up about 7.2%, dropping from a 47% increase in 2023, according to Motor Intelligence data cited by WDIV.
The EV share of new vehicles in 2024 is 7.9%, far less than projections and just 0.3% higher than last year.