Three years after lawmakers created the Strategic Outreach Attraction Reserve Gov. Gretchen Whitmer said would “create tens of thousands of good paying jobs,” not a single one has materialized.
Michigan taxpayers have shelled out more than $670 million to five multibillion companies to prop up the electric vehicle and renewable energy industries in Michigan with a promise to create a total of 8,812 jobs, but a report from the Michigan Economic Development Corporation that oversees the spending shows zero “actual qualified jobs created.”
“The program was poorly designed from the start,” said James Hohman, director of fiscal policy at the Mackinac Center for Public Policy. “It allows companies to cash in on taxpayer subsidies without having to create jobs. Lawmakers must wait years to ask for taxpayer money back if deals fail to deliver. It’s good that House lawmakers are working to redirect this money to roads.”
The taxpayer funded incentives through SOAR’s Critical Industry Program include $480 million for General Motors to create 1,840 jobs, $120 million for Ultium Cells to create 1,360, $125 million for CCP-linked Gotion to create 2,350, $200 million for Our Next Energy to create 2,112, and $68 million for Solar Technology to create 1,150.
MEDC has disbursed the full amounts for GM, Ultium Cells, and Our Next Energy, while no payments have yet been made to Gotion or Solar Technology, according to the report, which covers fiscal year 2024 that ended Sept. 30.
The incentive deals were negotiated in secret by the Whitmer administration and select lawmakers through non-disclosure agreements mandated by the MEDC, which is controlled by an executive committee appointed by Whitmer.
“I am proud to sign another bipartisan bill that will build on Michigan’s growing economic momentum, attract billions in investment, and create tens of thousands of good paying jobs,” the governor said when she approved legislation to fund SOAR in 2022. “The bipartisan legislation will help us grow, attract, and retain businesses in Michigan, ensuring we can lead the future of mobility and electrification and bring supply chains of chips and batteries home to Michigan.”
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Not only have the jobs failed to materialize, companies awarded taxpayer funds have backed out of their commitments, or laid off employees.
Earlier this month, Our Next Energy cut two dozen Michigan jobs in a second round of layoffs since receiving its $200 million payout. The company also laid off 128 workers in November to focus on “core priorities,” according to The Detroit News.
In December, GM announced it is selling its ownership stake in Ultium Cells, leaving its joint venture partner, South Korea-based LG Energy Solution, to fulfill the SOAR job commitments.
GM has also delayed plans to expand its EV factory in Orion Township, despite $480 million in SOAR funding for that project.
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Those decisions came as GM laid off thousands of employees in 2024.
“Someone has to finally put the taxpayers and Michigan workers first, not sell out to big corporations making billions in profits,” Michigan House Speaker Matt Hall, R-Richland Twp., said in December. “These bad deals leave us all twisting in the wind.”
Republicans have since introduced legislation to divert a large portion of the business incentives to road repairs, while imposing new guidelines on funding projects that will require lawmakers and the MEDC to justify the spending.
The Republican roads plan, which diverts $550 million from the SOAR fund, cleared the lower chamber on a vote of 63-45 on Wednesday to pump a total of $3.1 billion per year into road repairs and fulfill Whitmer’s campaign promise to “fix the damn roads” without raising taxes.
While the vote for legislation was mostly along party lines, seven Democrats, including former House Speaker Joe Tate, D-Detroit, backed parts of the bill package, according to Bridge Michigan.
The Republican roads plan now heads to the Democratic majority in the Senate, where Senate Majority Leader Winne Brinks, D-Grand Rapids, described the proposal as a “nonstarter.”
“Republicans are asking you to pay more but get less,” Brinks told Bridge.
Whitmer, meanwhile, continues to insist on increasing taxes on businesses and wholesale marijuana to address the state’s $3.9 billion road funding shortfall, with press secretary Stacey LaRouche alleging the Republican plan “does not achieve” the governor’s goal of finding and sustainable, long-term solution.
“The governor is open to suggestions from Republicans and Democrats, but inaction is not an option,” LaRouche told Bridge.
So far, Democrats haven’t offered any ideas.
“Maybe Democrats do need to come up with some sort of plan that stakes out our broad principles about what we would view to be a meaningful step forward on roads,” state Rep. Noah Arbit, D-West Bloomfield, said.