No New Permanent Jobs From State Corporate Subsidy

In October 2014, the Michigan Economic Development Corporation, a state government agency, announced another round of what it called “performance grants” to select companies planning business expansions in Michigan.

One was Nexthermal, a manufacturer of coil heaters and related products, for $250,000. In return, the Battle Creek-based company was to invest $1.96 million in an expansion and create 50 new jobs. It chose Battle Creek for the project over competing sites in Alabama, Georgia, Oklahoma, China and India, according to a news release from MEDC.

Former MEDC CEO Michael Finney said at the time: “These new investments show Michigan’s highly competitive business climate and talented workforce mean real opportunities for growing companies.”

Nexthermal had earlier received a $9,000 state “business connect” grant to support its research on competition and markets. A Nexthermal executive also traveled with then-Gov. Rick Snyder on a trade trip to China in 2013, according to a report by MLive.

Whatever growth followed was apparently not sufficient to meet the terms of the grant agreement, however.

The official program report to the Legislature in 2016 made no mention of Nexthermal. The 2017 report said that the company had received $50,000 of its award, but the agreement was terminated and Nexthermal was in default on it. The following year, the MEDC reported that the company made a repayment of $30,000.

The agreement resulted in no new permanent jobs. The company remains in business, but it did not respond to a request for comment. MEDC officials declined to provide additional information absent a formal Freedom of Information Act request.