GM received $3.8 billion in tax credits from Michigan to keep jobs, automaker reveals




  • In Business
  • 2022-07-06 20:24:10Z
  • By Detroit Free Press
 

General Motors received a $3.8 billion tax credit from Michigan after it filed for bankruptcy in 2009 and during the Great Recession.

That revelation took a decade and a state Supreme Court ruling on a public records request to happen, but on Friday, GM finally revealed the amount of its credit.

GM originally accepted a $3.8 billion cap through the Michigan Economic Growth Authority (MEGA) program to cover 2010-29, Liz Winter, senior communications manager, told the Detroit Free Press in an email.

"The Michigan Economic Growth Authority (MEGA) Agreement is an incredibly successful program that encouraged GM to build and grow in Michigan," Winter wrote. "It provides companies a tax credit tied to job creation in the state."

More: Michigan Supreme Court: State must disclose value of tax credits issued to GM

GM received MEGA credits after it filed for federal bankruptcy protection in 2009 as a way to incentivize the automaker to keep jobs in the state.

But in 2015, GM and state leaders renegotiated the tax credit cap. But they did not disclose the new tax cap, which represented the total value of tax credits GM could claim under the MEGA Act over the term of the deal.

That's when David Sole, a Detroit resident, stepped in and in 2016 he requested the information through the state Freedom of Information Act from the Michigan Economic Development Corp. He asked for the amount of tax credit cap GM was given, but the amount was redacted in the response he received.

MEDC said the amount of the tax credits was exempt from disclosure under the Michigan Strategic Fund Act, which says the state does not have to disclose records or data related to financial or proprietary information submitted by an applicant for tax credits. The value of the credits was calculated using financial or proprietary information submitted by GM, making those numbers exempt, the MEDC said.

Sole took his claim to the courts.

On June 29, the Michigan Supreme Court court mandated GM disclose the full amount of tax credits the state issued to it, ruling the information is public. The MEGA program is now defunct but the state estimates it will be paying out credits until 2030.

GM reduced that tax credit by $325 million in January 2020 to $3.475 billion, Winter said. Between 2010-19, GM leveraged $1.2 billion of this tax benefit, she said.

Since 2011, GM said the investments helped it create 10,078 jobs and increase the volume of its popular and profitable heavy-duty pickups built at Flint Assembly plant.

The investments also will help with the construction of the Wallace Battery Cell Innovation Center in Warren, expected to open later this year.

More: GM to build new battery facility in Warren to support its EV strategy

It also helped fund the upgrades to Orion Assembly plant in Orion Township, Factory Zero in Detroit and Hamtramck and Pontiac Metal Center, all to support electric vehicles and self-driving car technology.

Winter said GM has invested a total of $18.6 billion back into the state.

Contact Jamie L. LaReau: 313-222-2149 or jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.

This article originally appeared on Detroit Free Press: GM reveals it received $3.8 billion in tax credits from Michigan

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