Print 24 comment(s) - last by Ammohunt.. on Dec 30 at 2:37 PM

Michigan wants to build batteries for hybrid cars in the state

The U.S. auto industry is one of the nation’s hardest hit industries in the current economic climate. Several of the nation's largest automakers were facing the very real possibility of bankruptcy. Dwindling sales and minimum cash reserves led the automakers to seek help from the U.S. government.

The emergency loans were granted to GM and Chrysler recently totaling $13.4 billion. Governmental officials in Michigan aren't content to rely on these loans to power the major employers in the state and are looking to the future to lure new business into the sate that will bring jobs and bolster the economy.

Lawmakers and Gov. Jennifer Granholm from Michigan are offering up big tax incentives to battery firms to lure them away from Asia and into the U.S., specifically into Michigan where the battery technology can be used by automakers directly.

With hybrid vehicles and plug-in hybrids like the Chevy Volt at the core of the plan GM and other automakers have to save their companies, it makes sense for the state to want to bring the making of all key components to Michigan. The lithium-ion batteries are perhaps the most important component of any hybrid vehicle.

Sen. John Pappageorge told the Detroit News, "It is imperative that Michigan possess this technology to keep Michigan the center of car manufacturing."

Lawmakers from the state say that not only is Michigan lacking in battery technology companies, but the entire U.S. is lacking as well. Granholm said, "They [GM] are going to produce the Volt. ... The battery that is going to power the Volt -- we intend that to be made in Michigan."

Michigan is offering battery companies refundable tax credits to lure them to the state. Refundable credits go a step further than tax breaks; they are like a rebate for production expenses and can require the state to write checks to businesses if the credits exceed their tax liability. The tax measure was approved by the Senate 31-3 and was approved by the House 94-0.

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By TomZ on 12/29/2008 9:50:01 PM , Rating: 2
It is not correct to blame Michigan's economic problems entirely on the UAW. Yes, there is an impact, but in addition to that, there are a lot of white-collar jobs being lost in Michigan. So really the problem is the concentration of auto industry jobs in Michigan, and when the industry cycles down, so does Michigan's economy. Simple as that.

By Ringold on 12/30/2008 6:06:43 AM , Rating: 2
and when the industry cycles down, so does Michigan's economy.

That is true. Unemployment records for the state show Michigan almost completely missed the last economic expansion, and didn't seem to get a lot out of the last one either in terms of new jobs to sustain them the way some of the rest of the rust belt managed to diversify to some degree over the last 10-20 years. That's not all the unions fault. The union is a part of it, but a symptom of deeper problems with the states (and the controlling partys) entire approach to economic issues. As for the companies themselves, I do think they play a larger role than you do, but they're still not the only thing that's killed the domestic automakers. If nothing else, it takes two to tango; a government and corporate management that allows the union and the culture the union creates to go unchallenged. Economies can't hide from capitalism; disregard its edicts and the consequence is what Michigan is experiencing.

I was more attacking ToeCutters apparent refusal to consider any role the unions might play at all.

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