In yet another blow to the state of Michigan, General Motors has announced a plan to cut 35,000 jobs in the state in a $2 billion cost-saving measure. Although the company has not said that it will lay off employees, they are attempting to buy workers out of their contracts.
The announcement comes after the company received nearly $1 billion in tax incentives from the Michigan government last year. General Motors promised to create thousands of new jobs from the creation of new battery and electric vehicle plants. However, the company is now planning to cut tens of thousands of jobs in the state.
General Motors has often been a beneficiary of government subsidies. In fact, the Michigan legislature recently promised another $650 million in subsidies to Ford to build a battery plant. This is in addition to the $2.9 billion in corporate handouts that Michigan Democrats have given out in less than two months in office, according to a Mackinac Center analysis. Taxpayers will reportedly be stuck with an over $300,000 bill for every job created, meaning that the state will only recover a fraction of the tax revenue it cost to create the jobs.
General Motors is announcing job cuts in the same week that the #mileg is trying to repeal Michigan’s Right-to-Work law while simultaneously shoveling hundreds of millions into the state’s corporate welfare slush fund. Folks, I’ve lived through the 1980s already, once was enough.
— John Mozena (@johnmoz) March 9, 2023
According to MLive, the majority of salaried General Motors workers were offered a voluntary buyout by the automotive company on Thursday, March 9. Michigan makes up roughly 60% of GM’s overall salaried workforce. There are 35,000 salaried workers in Michigan across 25 facilities and offices. The buyouts are part of GM’s plan to reach $2 billion in cost savings by the end of 2024. The company is not disclosing a target goal for buyouts.
In a statement, GM spokesperson David Barnas confirmed that all U.S. salaried employees with at least five years of service and all global executives with at least two years of service were offered a voluntary separation package. The filter captures the majority of GM’s 58,000 U.S. salaried employees. Barnas said that the goal of the program is to accelerate attrition and help avoid the potential for involuntary actions.
“By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market,” he added.
The news of General Motors’ job cuts is yet another example of the impact of corporate handouts on Michigan taxpayers. Instead of investing in the state and creating jobs, companies are taking taxpayer money and then cutting jobs. This is not sustainable and needs to be addressed.
The state should focus on creating an environment that is conducive to business growth and job creation, rather than handing out corporate welfare. It’s time for Michigan to take a hard look at its economic policies and make changes that will benefit taxpayers and businesses alike.
Sources: 100PercentFedUp, MLive
