Nonprofit names EV battery plant in Marshall 'worst economic development deal'

A small section of land near Michigan Avenue and 13 Mile Road bought by Ford Motor Company has the ground worked on during Wednesday, July 12, 2023 for the eventual location of footers to be used in the construction of the Ford EV plant in Marshall.
A small section of land near Michigan Avenue and 13 Mile Road bought by Ford Motor Company has the ground worked on during Wednesday, July 12, 2023 for the eventual location of footers to be used in the construction of the Ford EV plant in Marshall.
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The $1.75 billion in planned subsidies for Ford Motor Company's electric vehicle battery plant in Marshall has been dubbed the "Worst Economic Development Deal of the Year" for 2023 by the Center for Economic Accountability.

The award recognizes a government subsidy of a private company in the name of “job creation” and economic growth that goes further than any other that year to "massive wastefulness and ineffectiveness," the nonprofit said in its announcement.

Michigan’s subsidy of the the Ford plant won the award, according to Center for Economic Accountability, due to its $700,000 per-job price tag, use of unrealistic “job multipliers” and an uncertain future for labor negotiations, consumer preferences, federal policy and technological advancements.

Ford and local economic development officials, meanwhile, say such an assessment is premature.

“Michigan’s elected officials used numbers pulled out of thin air to commit taxpayers to a 15-year payment plan for a project that held up for just nine months before economic headwinds, regulatory uncertainty and industry trends intervened with a dose of reality,” CEA president John Mozena said in a statement.

Michigan Gov. Gretchen Whitmer speaks about the BlueOval Battery Park Michigan to be built in Marshall during a press announcement at Ford Ion Park in Romulus on Monday, February 13, 2023.
Michigan Gov. Gretchen Whitmer speaks about the BlueOval Battery Park Michigan to be built in Marshall during a press announcement at Ford Ion Park in Romulus on Monday, February 13, 2023.

Ford in February announced its plans to invest $3.5 billion to make the EV battery plant — known as BlueOval Battery Park Michigan — a reality in Marshall, an investment that it said would create 2,500 jobs when production of lithium iron phosphate batteries begins at the plant in 2026.

The automaker has since reduced its commitment to the Marshall-area EV battery facility by 800 jobs and more than $1 billion, moves that company officials said will reduce the plant's production capacity by roughly 40%. State officials have indicated incentives for the project will likewise we revised in accordance with the new investment parameters.

"The government incentives have not been resized with the smaller scale of the plant and employment and so, absent that, it seems like any kind of assessment would be premature," Ford spokesperson T.R. Reid explained Tuesday. "The plant is going to be smaller, the number of employees will be fewer and we fully expect that the scale of participation by the state and others would likewise be smaller. But what form that takes hasn’t been determined, so I don’t know how you assess whether a project is good or bad when the terms aren’t fully defined.

"With the reassessment of the economics a few weeks ago complete, for us it’s full speed ahead," Reid continued. "We’re anxious to not just be a corporate resident of Marshall, but a real, true member of the community and contribute to an even better Marshall."

Jim Durian, CEO of the Marshall Area Economic Development Alliance, reiterated that BlueOval Battery Park will have a positive impact on the Marshall community for years to come.

“It will mean 1,700 local jobs and opportunities for young people so they aren’t forced to move away to find good-paying jobs," Durian said in a statement. "This game-changing project will also raise property values, pump money into our local economy and drive traffic to small businesses across the region. In fact, the impact is already being felt today as hundreds of workers are on the site and more will be added in the coming year.”

The $1.75 billion in subsidies announced earlier this year included $630 million in road, infrastructure and site development incentives, $772 million in tax credits over a 15-year period through the Michigan Strategic Fund, a $120 million grant through the Michigan Strategic Site Readiness Program, a $210 million grant through the Michigan Critical Industry Program and $36 million through the Jobs for Michigan Investment Fund Loan Program.

Michigan Gov. Gretchen Whitmer, left, and Ford Motor Co. CEO Jim Farley, right, take questions during a media scrum following the announcement of the BlueOval Battery Park Michigan to be built in Marshall during a news media announcement at Ford Ion Park in Romulus on Monday, Feb. 13, 2023.
Michigan Gov. Gretchen Whitmer, left, and Ford Motor Co. CEO Jim Farley, right, take questions during a media scrum following the announcement of the BlueOval Battery Park Michigan to be built in Marshall during a news media announcement at Ford Ion Park in Romulus on Monday, Feb. 13, 2023.

In September, the Detroit Free Press reported that political groups tied to Gov. Gretchen Whitmer spent an estimated $100,000 to run a public relations campaign against local Marshall-area residents who vocally opposed the deal.

“At the end of the day, the reported use of political consultants to run a smear campaign against skeptical local residents that really set Michigan’s subsidies for Ford’s Marshall battery plant apart from all the other terrible corporate welfare deals across the country,” Mozena said.

Founded in 2018, the Center for Economic Accountability is an independent and nonpartisan 501(c)(3) that works for transparency, accountability and market-based reforms of state and local economic development programs across the country, according to its website.

Mozena formerly served as the vice president for marketing and communications at the Mackinac Center for Public Policy, a nonprofit research and educational institute that "advances the principles of free markets and limited government."

Contact reporter Greyson Steele at gsteele@battlecreekenquirer.com

This article originally appeared on Battle Creek Enquirer: Nonprofit names Ford's EV battery plant in Marshall 'worst economic development deal'