Announcements by U.S. cities of subsidy packages for new automobile plants have become commonplace, but the most recent one is fraught with irony. Last week, the city council of Flint, Michigan voted unanimously to grant several tax breaks to General Motors in connection with the construction of a facility that will produce engines for the company’s planned plug-in electric car called the Chevrolet Volt, which is expected to start production in 2010.
The deal includes a 15-year, 50 percent abatement of real property taxes on a new 500,000 square-foot plant, a 100 percent abatement of taxes on personal property (i.e. equipment) and the designation of the site as a brownfield redevelopment, which would make the plant eligible for additional state tax breaks. Flint officials have not yet released an estimate of the total cost of the package.
Flint … General Motors … electric car … subsidies -- where to begin?