The Michigan Legislature has committed nearly $2.1 billion in taxpayer-funded business incentives in recent years, but the spending isn’t producing the jobs promised.

Since lawmakers created the Strategic Outreach and Attraction Reserve program in 2021 with the intent to reel in major manufacturing investments, Gov. Gretchen Whitmer and others have touted more than 12,000 jobs created through billions in taxpayer funded incentives.

While many of the businesses that received the funds distributed through the Michigan Economic Development Corporation declined to discuss specifics with The Detroit News, it’s clear few of those promised jobs have materialized.

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The deals include $666 million in incentives for General Motors announced in 2022 for electric vehicle projects, including an expansion of its Orion Township assembly plant to produce an all-electric pickup, and a Lansing area battery plant through a joint venture with LG Energy Solution.

The two projects were slated to create 3,200 to 4,000 jobs.

GM has since pushed back its plans in Orion Township by a year, leaving the facility idle until an expected restart in 2026. On Monday, GM announced it’s selling its stake in the Ultium Cells Lansing battery plant, but suggested the South Korea-based LG will ultimately fulfill the jobs requirement to secure taxpayer funds.

Another $200 million from the SOAR fund to Novi-based Our Next Energy is intended to produce 2,112 jobs at a mattery manufacturing plant in Wayne County. That deal also included more than $36 million in other state funds.

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But ONE vice president of communications Dan Pierce refused to discuss progress with The News, both in terms of funding received to date and jobs created.

“ONE has received some SOAR funding from the state of Michigan to support the build-out of its battery cell factory and will continue to do so as long as the company meets all of the agreed-upon benchmarks for the facility, which is scheduled to be completed and at capacity by 2027,” he said.

ONE landed its grant in 2022, then laid off a quarter of its staff the following year. The company cut another 24 Michigan jobs in 2024 under the leadership of a new CEO.

In Marshall, Ford initially planned a $3.5 billion investment to build a new BlueOval Battery Park to produce EV batteries in partnership with the Chinese Communist Party-linked Contemporary Amperex Technology Co. Ltd., known as CATL.

The facility was subsidized by more than $1 billion from Michigan taxpayers on a promise to create 2,500 jobs, but Ford scaled back its investment by roughly $1 billion this year, prompting the MEDC to slash its incentives by roughly 60%.

Ford spokeswoman Lucy Hough wouldn’t tell The News how many jobs have been created to date, but said the company is hiring a leadership team that will begin hiring hourly workers in 2025.

Ford also gave up a $100.8 million in state incentives it was set to receive for creating 3,200 jobs at five existing Detroit Metro manufacturing facilities, due in part to less-than-expected demand for EVs.

Other major SOAR grant recipients have yet to start construction on announced projects.

Gotion, Inc. was approved for $715 million in taxpayer subsidies to create 2,350 jobs at a planned battery parts plant near Big Rapids in 2022, but that project remains mired in litigation and fervent opposition from Republicans and local residents over concerns about the company’s close ties to the Chinese Communist Party, impacts on the Muskegon River, and other issues.

Another $60 million in SOAR funds for a Muskegon wastewater pipeline project, and $27 million for a Hemlock Semiconductor expansion in Thomas Township are also expected to create hundreds of jobs, but are not yet complete.

“Once the line is online, then the new jobs will come,” Muskegon County deputy administrator Matthew Farrar told The News, referring to the 20-mile sewer line between Muskegon and Coopersville that’s slated to create 145 jobs.

“News headlines frequently tout the promise of new jobs, but rarely report when the programs fail to deliver on their promises,” said James Hohman, director of fiscal policy at the Mackinac Center and author of a new study on two decades of broken promises tied to taxpayer-funded business incentives.

“This creates a misunderstanding among the public that job announcements are the same thing as actual jobs created,” he said. “Yet lawmakers continue to rubber-stamp these ineffective and costly deals.”

The Mackinac Center study, titled Front Line Failures, found just 9% of the jobs announced in major state-sponsored deals from 2000 to 2020 were ever created.

Examples in the report:

• A 2007 deal with a Detroit pharmaceutical company promised to create 600 jobs. Instead, the company added zero new jobs and closed its facility by 2014.
• A 2009 deal with General Electric promised 1,200 jobs. Zero jobs were created.
• A 2008 headline announced, “State reels in jobs.” It announced 4,800 jobs. Companies created 112 jobs.
• One local official proclaimed she could not “overstate the impact” of a 2015 deal to create 1,000 jobs. The company created 26 jobs.

The ineffective business incentives are fueling efforts in Lansing to more closely scrutinize the deals, which are often negotiated in secret using nondisclosure agreements with select lawmakers.

Republican House Speaker-elect Matt Hall told The News he’d prefer if SOAR funds went through a more transparent process that requires full legislative approval for each project, a process that would allow the public to better evaluate the spending.

“They need to make the case on individual projects,” he said. “Not in secret. And not with a select group of members.”

“We have to set priorities,” Hall said. “That’s what this government has been missing the last two years especially. I’m just saying roads is a higher priority than giving the money to corporations.”

Hall recently introduced a Republican plan to shift some SOAR funds toward the state’s $3.9 billion annual funding shortfall for roads and bridge repairs.

Sen. Mallory McMorrow, D-Royal Oak, agrees the SOAR fund she helped create has not been a success, and is now promoting legislation up for hearings this week in the Economic and Community Development Committee she chairs to develop a strategic 10-year plan she believes will better steer the spending.

Michigan “missed out on something that could have been really great,” she said, “especially given the amount of money.”

McMorrow’s legislation is up for debate as lawmakers consider another roughly $270 million in SOAR spending on a Dow Chemical project in Midland, a copper mine in Gogebic County, and a Corning solar component manufacturing facility in Saginaw County.

“The state has delivered two decades of false promises as the companies and politicians involved in these deals rarely deliver on their promises,” Hohman said. “Michigan lawmakers should rethink their reliance on corporate welfare as an economic development tool and the media should use more skepticism when reporting on these deals. At a minimum, journalists should provide context that job announcements are different from actual jobs and have a poor track record of success.”