State gave company $1.4M to choose Michigan, after it had already chosen

Three months after an automotive company started construction on a factory in the Grand Rapids suburb of Wyoming, the state’s economic development agency granted it $1.4 million.

The Michigan Economic Development Corporation said the money helped the recipient choose Michigan. German company Benteler Automotive had, however, already bought the property for the $100 million plant, WGVU Public Media reported Sept. 4.

The development corporation said the money helped persuade the company to choose Michigan for the facility instead of another state, MLive reported Dec. 10. Benteler says it will create up 147 jobs at the site.

Three of Benteler’s six facilities in the United States are located in Michigan, according to a Dec. 4 MEDC press release.

The company, which will provide parts for electric vehicles, is rehabilitating the site of a former General Motors stamping plant. It started work Sept. 24, MLive reported.

A spokesman for the development corporation suggested the potential of the state subsidy factored into Benteler’s decision.

“Once a site has been selected, and potential state support has been discussed, it is not uncommon for companies to begin the process as quickly as they can to begin production as soon as possible,” Otie McKinley, media and communications manager at the MEDC, told Michigan Capitol Confidential in an email.

Companies deciding whether to invest can look at multiple sites throughout the process, McKinley said, and state support is often a key factor.

“As is typical when working to secure large, complex investment and expansion projects with companies, discussions with Benteler Automotive regarding project considerations began nearly two years prior to the (state) approval of incentives, when the company was beginning its site selection process,” said McKinley, adding that the company was also negotiating with other states for support.

Benteler did not respond to an email seeking comment.

Though state officials often claim that giving billions in taxpayer money aids job creation, a recent study from James Hohman, fiscal policy director at the Mackinac Center for Public Policy, says the efforts usually don’t succeed.

Only 11% of jobs the state said would be created thanks to corporate subsidies from 2000 to 2020 came to fruition, Hohman wrote.

The state has paid $4.6 billion since 2023 in corporate subsidies in the name of job creation.