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Michigan’s Automotive Innovation Deserves Equally Innovative Policy

December 7, 2021
By Glenn Stevens Jr.

Michigan is uniquely positioned to lead the electrified mobility revolution, but it needs new economic development policies and that match the innovation occurring across the industry.

Michigan voters get it. And they get it across party lines with overwhelming agreement that our state needs comparable incentives to those offered Ford Motor Company for new electric vehicle plants in Kentucky and Tennessee.

Just look at a few of the numbers in the recently released statewide poll by Business Leaders for Michigan, the Detroit Regional Chamber and Michigan Manufacturing Association

  • Only 28.0% of Michigan voters believe the state will remain the center of the automobile industry. 63.5% of Michigan voters believe the automobile industry will shift to other parts of the country.
  • Despite the concern that the automobile industry will leave the state, Michigan voters believe the state is well positioned to compete with other states to be the center of the electric vehicle industry by a margin of 60.0%-30.2%.
  • By a margin of 86.5%-7.5%, voters support the state taking steps to make sure Michigan maintains its role as the state that leads the automobile industry.
  • 86.8% of Michigan voters believe it is important that Michigan designs and builds the vehicles of the future. And by a 2-1 margin, Michigan voters believe the state is well positioned to compete for the electric vehicle industry.
  • By a margin of 83.2%-12.0%, voters support Michigan offering incentives similar to Indiana’s 100% income tax credit, Texas grants of $10,000 per new job created, and Tennessee’s $500 million cash incentive to Ford.

Those numbers reflect the urgency of where we are as a state. And they reflect agreement at a time when Michiganders don’t seem to agree on anything.

So let’s capitalize on this consensus and ensure that the vehicles of the future are indeed engineered and built in Michigan.

First, we need competitive incentives over the short term. When it comes to tax incentives and available mega sites, we’re not in position to compete, and all the while effective tools like Good Jobs for Michigan have been allowed to expire.

According to the poll there’s support for incentives tied to job creation. In fact, 58.7% of Michigan voters strongly support direct cash incentives provided that the incentive money is tied to a specific promise to create a minimum number of jobs or the company would have to return the incentives.

Our short-term efforts however need to accompany longer term policy, largely revolving around talent. The key to incentivizing automotive and mobility businesses to expand and invest in Michigan will be based on its ability to thrive in the knowledge-based economy. Attracting new companies will depend on our ability to produce and attract significantly more high-tech talent, software engineers for example, needed to win the digital economy, which will define the next era of automotive and mobility.

We know that our elected officials are aware more needs to be done. Governor Whitmer has a new Michigan Economic Development Corporation director who has hit the ground running. And State Senator Ken Horn has a very promising proposal tying incentives to job creation – something voters also support strongly per the poll.

But there’s still too much partisanship and not enough collaboration.

That needs to change and in a hurry. When 80% or more of voters in this day and age agree on something, there’s plenty of political benefit to get behind it.

Eroding a global leadership position built over the century since the Model T, doesn’t happen in a moment, or a year, or a decade.  It erodes over a century, or a century’s worth of innovation. As anyone in our beloved automotive industry will tell you, we’re seeing more innovation every five years than we saw in the last 50. That means our leadership can erode – or be fortified faster than ever.

That’s not hyperbole, it’s fact.

If Michigan doesn’t get on the same page from a policy stand point and ensure we’re competing in all facets – that loss of leadership narrative could be the story of the 21st century.

Glenn Stevens Jr is Vice President, Automotive & Mobility Initiatives for the Detroit Regional Chamber and Executive Director, MichAuto.