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Should the public be celebrating the announcement that GM is investing $7 Billion in Michigan?

January 31, 2022

On January 25th, it was announced by Gov. Whitmer and the CEO of General Motors, that the the auto manufacturer would be investing $7 Billion in Michigan. Here is what MLive reported:

General Motors, building toward an all-electric future, plans to invest $7 billion and create 4,000 jobs across four manufacturing sites in Michigan.

Supported by $824.1 million in state incentives, the Detroit automaker will expand an Orion Township plant, build a Lansing electric battery manufacturing facility and make upgrades to two Lansing area plants.

The commercial news media has been treating this announcement as good news for the state, with almost celebratory coverage across the board. What we don’t find in the reporting since this announcement, is much critical inquiry or even basic questions/information that might be useful to Michigan residents. Here are a few things to ponder with the GM announcement. 

First, there are no eyebrows raised about the fact that the State of Michigan will be providing $824.1 Million of incentives. (Remember incentives, like subsidies, are costs that will be insured by public tax dollars) According to the Press Release from Gov. Whitmer’s office, the incentives are:

A Critical Industry Program grant in the amount of $600 million for the creation of up to 4,000 jobs related to the Orion Township and Ultium projects;

An 18-year Renewable Energy Renaissance Zone which will require a minimum investment of $1.5 billion with the potential for up to $2.5 billion, estimated to be worth $158 million;

A Strategic Site Readiness Program grant in the amount of $66.1 million awarded to the Lansing Economic Area Partnership (LEAP) for public infrastructure and utility upgrades.

These three state incentives were decided upon by the Michigan Strategic Fund. The Michigan Strategic Fund is governed by a Board of Directors, made up of state office holders and numerous business people. This means that the public has no say in the $824.1 Million incentives being provided to GM. Imagine how $824.1 Million could have served the public in the form of housing, health care or other basic necessities.

Second, the announcement told us that the $7 Billion GM investment would lead to 4,000 new jobs. Would those jobs be equivalent of the current rate for new union employee in the auto industry? Would these new jobs come with health care and other benefits? This is always a critical question to ask, especially since in the 2008/2009 federal government bailout of the three auto manufacturers, there were strings attached, like a two tiered income system, with cuts in pay and benefits. Unfortunately, the UAW, who also released a statement about the $7 Billion investment, said nothing about what was negotiated or what this will mean for rank and file workers. This is a far cry from the days when the UAW engaged in wildcat strikes in Michigan in the 1930s and 40s. 

Third, there is virtually no discussion in the news coverage of this announcement, what the environmental impact of the continued manufacturing of cars, even electric cars, will be. It goes without saying that fossil fuels-dependent vehicles create a great deal of carbon, which is a major contributor to Climate Change. However, there are ecological consequences of manufacturing electric vehicles. Electric vehicles still rely on extracting numerous minerals, both for the car in general and for the battery

Electric vehicle batteries rely on minerals such as cobalt, lithium and nickel. Most of these minerals are mined in developing countries, or the more honest term for these countries, the Global South. The mining of these minerals often takes place with no environmental regulation, with the pollution of local water systems often being the result. Another consequence of the mining of resources for electric vehicle batteries is that there is labor exploitation. A recent United Nations post stated:

Nearly 50% of world cobalt reserves are in the Democratic Republic of the Congo, which accounts for over two-thirds of global production of the mineral. About 20% of cobalt sourced from the central African nation comes from artisanal mines, where some 40,000 children work in extremely dangerous conditions, according to UNICEF, the UN’s children’s agency.

Then there are environmental consequences in the form of road, parking lots and all the things associated with the continued manufacturing of private vehicles. The economic and environmental costs associated with the construction and maintenance of road and parking lots is astronomical, costs which are usually incurred by the public.

Fourth, the failure of news agencies to question the announcement from GM also sniffles our collective ability to imagine other possibilities when it comes to transportation. Imagine what it would look like if during the Governor’s State of the State address would have included that there would be massive public incentives to create light rail systems in Michigan? What would it mean in terms of human and ecological sustainability to have mass transit be the primary solution to transportation, rather than the continued manufacturing of private vehicles? This is partly due to the fact that we have a for-profit media system, which relies on advertising dollars to make money.

I for one am not celebrating the announcement that public funding was used to offer incentives to a privately company, which is beholden to its stock holders and not those who work there. I am not excited that the shift to electric vehicles will not substantially reduce environmental catastrophe around the planet. I am not jumping for joy that the company that was part of a real conspiracy to buy up urban mass transit systems in the early part of the 20th Century – General Motors – will continue to dictate the future of our collective transportation needs. (See the documentary film Taken for a Ride) And I am not happy that public money will once again be used to primarily benefit the private sector, a decision which I and the rest of Michiganders had no say in.

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