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After getting $824M in state aid, GM to cut 900 jobs at Orion Assembly

michigancapitolconfidential.com

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Re: After getting $824M in state aid, GM to cut 900 jobs at Orion Assembly

#21

Post by culi »

legitster wrote: post #3

> Taxpayers spent $600 million to create 4,000 jobs Taxpayers spent $0. They gave up the potential to make $600 million. And that was only if Orion created the full 4,000 jobs. So they potentially only forwent ~$135 million based on the actual amount of people hired. But it's ridiculous to frame it this way. If a store gave you a coupon for $20 off your order, no one in their right mind would say the store "spent $20…

This is not at all like a coupon that you never cashed in. The company actually received $824 million in corporate welfare. Meaning if it weren't for the state they would literally have $824 million more and the state would literally have $824 million more.

Re: After getting $824M in state aid, GM to cut 900 jobs at Orion Assembly

#22

Post by redserk »

legitster wrote: post #6
JumpCrisscross wrote: post #5

Earlier quoted context omitted.

> $66.1 million in site readiness This sounds like cashs spent up front. But you're correct, I don't think it went to GM.

It's hard to know exactly what "site readiness" includes, but it usually means putting down roads, traffic control, etc. In this case, it could literally also mean the real estate costs of permitting and clearing the lots for their construction. But again, these are usually improvements the state gets to keep, or are marketing costs for the land they were trying to develop. So not ideal but not a total loss either.

If that's the case, it's possible the money could be considered spent to overdevelop an area that will now be underutilized and will create an increase in maintenance costs for no good reason.

Re: After getting $824M in state aid, GM to cut 900 jobs at Orion Assembly

#23

Post by oivey »

legitster wrote: post #14
oivey wrote: post #11

Earlier quoted context omitted.

It isn’t a tax cut. It’s a tax subsidy unevenly distributed to one company. Extremely not free market.

It clearly states several times in the article that it is a tax cut. And is there any evidence that it is unevenly distributed to one company? It seems like Michigan offers an open Express application program with clear requirements: https://www.michiganbusiness.org/pre-app/

Not once in the article does it mention tax cuts. It mentions tax abatements, which are very much not the same thing.

Any abatement of this size is going to be inherently political. I would be surprised if someone at GM used this web form to put in a request, even.

Re: After getting $824M in state aid, GM to cut 900 jobs at Orion Assembly

#24

Post by MR4D »

rbetts wrote: post #16
legitster wrote: post #3

> Taxpayers spent $600 million to create 4,000 jobs Taxpayers spent $0. They gave up the potential to make $600 million. And that was only if Orion created the full 4,000 jobs. So they potentially only forwent ~$135 million based on the actual amount of people hired. But it's ridiculous to frame it this way. If a store gave you a coupon for $20 off your order, no one in their right mind would say the store "spent $20…

Respectfully, I do not think this is fully correct. These are in part state tax dollars being paid to industry. I’d welcome a good source to the contrary. https://www.legislature.mi.gov/documents/2021-2022/billanaly...

Page 9 of the document you linked to:

* A provision that all money subject to a clawback or repayment provision must be paid within 90 days of notification by MSF. Amounts not paid within 90 days would be subject to a penalty of 1% per month, prorated on a daily basis. *

That word "clawback" is key. Elsewhere in the document it refers to benchmarks, so I presume if the benchmarks are not met that the clawback would take effect. In this case I have no idea what the contract is with GM, so we also don't know the benchmarks that would impact the clawback.

This is a good start though - hopefully someone can find the actual contract with GM.

Re: After getting $824M in state aid, GM to cut 900 jobs at Orion Assembly

#25

Post by tshirthoodie »

legitster wrote: post #20
rbetts wrote: post #16

Earlier quoted context omitted.

Respectfully, I do not think this is fully correct. These are in part state tax dollars being paid to industry. I’d welcome a good source to the contrary. https://www.legislature.mi.gov/documents/2021-2022/billanaly...

Maybe! This article could be mistaken calling this a tax abatement. The original press release refers to this as a "grant" (perhaps still tax abatement with financial shenanigans). Still, under the terms of the grant program, the state has lots of options to claw back any grant money if the recipient doesn't fulfill their requirements: https://www.michiganbusiness.org/48f6cb/globalassets/documen... I can't find any s…

You should update your original comment. HN is full of desperate efforts to dodge any skepticism of sketchy and dishonest capitalist behavior. It doesn't need more of them.

Re: After getting $824M in state aid, GM to cut 900 jobs at Orion Assembly

#27

Post by tshirthoodie »

bcrosby95 wrote: post #13

For anyone that doesn't know - in these deals, "creating" 4,000 jobs means 4,000 person-years worth of jobs. The requirement is satisfied if they hire 4,000 people for 1 year, 1,000 for 4, 500 for 8, etc.

In otherwords, it's outright lying unless they create the 4,000 jobs for 1 year, in which case it's still extreme dishonesty at best, given the importance of the 1 year term.

Capitalists and capitalist politicians should never be taken in good faith.

Re: After getting $824M in state aid, GM to cut 900 jobs at Orion Assembly

#28

Post by andsoitis »

tshirthoodie wrote: post #27
bcrosby95 wrote: post #13

For anyone that doesn't know - in these deals, "creating" 4,000 jobs means 4,000 person-years worth of jobs. The requirement is satisfied if they hire 4,000 people for 1 year, 1,000 for 4, 500 for 8, etc.

In otherwords, it's outright lying unless they create the 4,000 jobs for 1 year, in which case it's still extreme dishonesty at best, given the importance of the 1 year term. Capitalists and capitalist politicians should never be taken in good faith.

What, do you think, is a proper way to describe the number of jobs an organization or economy creates?

Re: After getting $824M in state aid, GM to cut 900 jobs at Orion Assembly

#29

Post by MuffinFlavored »

legitster wrote: post #3

> Taxpayers spent $600 million to create 4,000 jobs Taxpayers spent $0. They gave up the potential to make $600 million. And that was only if Orion created the full 4,000 jobs. So they potentially only forwent ~$135 million based on the actual amount of people hired. But it's ridiculous to frame it this way. If a store gave you a coupon for $20 off your order, no one in their right mind would say the store "spent $20…

> no one in their right mind would say the store "spent $20 on a subsidy"

I could be wrong but... when you sell a business, the people buying it very much want to know about outstanding liabilities in gift cards and 100% add it to some accounting column to count them as "in-existence"?...

Re: After getting $824M in state aid, GM to cut 900 jobs at Orion Assembly

#30

Post by tshirthoodie »

andsoitis wrote: post #28
tshirthoodie wrote: post #27

Earlier quoted context omitted.

In otherwords, it's outright lying unless they create the 4,000 jobs for 1 year, in which case it's still extreme dishonesty at best, given the importance of the 1 year term. Capitalists and capitalist politicians should never be taken in good faith.

What, do you think, is a proper way to describe the number of jobs an organization or economy creates?

Just say the number of jobs actually being created. Nobody in Michigan thinks any job is permanent no matter what you say.

Or just say "job-years". Anyone reading such an article will know what it means but there's no harm in defining it either.

There is obviously no excuse for just lying, and if it was unintentional then the responsible person should lose some job-years of their own.

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