Whitmer Spent $1.8 Billion to Create 602 Jobs

The problem with corporate welfare, in theory, is that it lets government pick winners and losers. The risks of a business venture are socialized, shared by millions of taxpayers. The rewards are privatized, held by a few.

The problem with corporate welfare, in reality, under Gov. Gretchen Whitmer, is that the government almost always picks losers.

A new report from the Mackinac Center’s James M. Hohman carries a startling headline: “$1.8 billion for 602 jobs.”

“All told,” Hohman writes, “the governor said that her major subsidy projects would create 20,595 jobs in Michigan. So far, these deals have created 602 jobs, just 3% of expectations. Of the $2.7 billion offered, $1.8 billion has been spent—transferred either to companies or to local economic development agencies.”

These numbers will shock most of Michigan, which only hears about these government giveaways on the front end. In news reports, this corporate welfare is always presented as an “investment” that “creates jobs.” Skepticism and history are never included in the report. Whitmer sends out the press release, and repeaters rewrite it.

Whitmer welfare doesn’t create many jobs. But it’s good at producing headlines from a Michigan media too eager to take Whitmer at her word, without any follow-up.

Hohman covers eight highly touted projects that received corporate welfare and positive headlines.

These deals entail cash giveaways and tax breaks for some of Michigan’s largest firms—Ford, GM, whatever they call Chrysler these days.

Some of them are among America’s largest companies. As such, they should be able to get funding by taking on debt or selling equity, as any normal company would do. But when you are politically connected, and can always raise the specter of sending jobs elsewhere, you don’t call the bank and ask for a loan. You call the governor’s office and ask for Whitmer bucks.

In June 2022, Michigan lawmakers approved a $100 million welfare package for Ford. Whitmer said the money would help Ford and Michigan “lead the future of mobility and electrification.”

The deal never closed; Ford gave up the $100 million to take a larger welfare package for its Blue Oval Battery Park in Marshall.

Hohman writes: “The company built the new packaging center without state subsidies, and it still operates all the plants included in the deal. But, because the deal was cancelled, whatever jobs Ford may have created were not generated by the subsidies the state offered.”

Turns out, Ford was able to expand and operate these facilities without the government. By that point, the governor’s job was done—she already got the flashy headline. No media outlet reported that the $100 million giveaway fell through.

By 2023, Democrats held all the gavels in Lansing, after a clean sweep in the 2022 election. They then threw massive amounts of money at a Whitmer pet project, the EV battery project in Marshall. Ford’s partner in Marshall was CATL, which the U.S. Department of Defense later said is a Chinese military firm.

Immediately, the Democrats ramped up the corporate welfare.

“Legislators then authorized an additional $630 million for site preparation in March 2023,” Hohman writes. “Later the same month, lawmakers gave $120 million more to the local development authority, for even more site preparation. The plant was expected to add 2,500 jobs.”

To date, Hohman reports that the local development agency received $780 million for site development. The facility is still under construction. The jobs projection was scaled back from 2,500 to 1,700.

“Elected officials treat the economic development deals they make as a wellspring of broad economic prosperity,” Hohman writes. “Yet, these deals rarely deliver on their promises.”