LANSING – Fiat Chrysler on Tuesday was awarded a Michigan Business Development Program grant from the Michigan Strategic Fund to the tune of $4.5 million in exchange for the creation of 700 jobs when it begins production of the next-generation Ram 1500 pickup truck at its Sterling Heights Assembly Plant.

In July, the company announced it was investing $1.48 billion to retool and reconfigure the plant and so it was awarded then an exemption from the State Essential Services Assessment valued at $11.3 million (See Gongwer Michigan Report, July 26, 2016). That investment was welcome news for those whose jobs had been eliminated or faced indefinite layoffs (roughly 1,300 employees) due to Chrysler’s decision to reduce production of its Chrysler 200 throughout this year.

The 700 jobs from Tuesday’s announcement would be a net gain after all those previous employees are recalled for work at the redesigned plant.

The grant received Tuesday by Chrysler is a cash-based program and would be complete by 2018, Steve Arwood, CEO of the Michigan Economic Development Corporation, told reporters after the meeting.

“I think the impetus is pretty clear: That’s a big plant, and that’s a big investment they’re making in that plant which could’ve gone anywhere,” Arwood said. “That’s foundational to Michigan and we’re certainly going to want to fight for any of those jobs we can get. But I look at it and say, you have to look at the competition. We’re not using MEGA. We’re not using tax credits, so I think it’s a very legitimate use of our (business development) program.”

The MEDC has made numerous incentives available over the last year to not only Chrysler but also Ford and General Motors as well. Asked whether he ever saw a scenario in which the state might turn down one of the Big 3 automakers for such assistance, Mr. Arwood said every case has to be evaluated on its own merits.

Pointing to the MSF’s April approval of Ford Motor Company’s SESA exemption as a result of its $1.4 billion investment in its Livonia Transmission plant as another example (See Gongwer Michigan Report, April 26, 2016), Arwood said there are two ways to look at that investment, which is similar to how he views these other investments for the automakers: “You can look at that and say that’s a major investment for a plant built in the 1950s, or that investment potentially could go somewhere else.”

He continued, “You have to look at that and say, ‘What does that speak to?’ That speaks to our fundamentals. These are jobs that provide a gigantic supply chain, and you have to look at that and see what am I competing for? Who am I competing with? And choose from that.”

JACKSON NATIONAL LIFE INSURANCE: The MSF also approved Tuesday an amendment to Jackson National’s Michigan Business Development program grant originally approved in 2013 for a headquarters expansion projected to create 400 jobs over five years, with a total of 1,000 new jobs over the next 10 years.

While the company has completed the expansion, is meeting its hiring milestones and has invested more than $100 million in the Lansing region, the MEDC said in a statement that the amendment was necessary to ensure the project was supported as originally intended. The amendment approved Tuesday also supports the creation of 304 additional jobs toward the overall goal of 1,000 jobs.

“The program in the past was a program requiring jobs to be at a certain wage – good news for the Lansing area, Jackson National is employing a lot of people at a lot higher wage than was ever anticipated,” Arwood explained to reporters after the MSF meeting. “That became a problem for the program because of the way it was structured, so we just changed programs and took a different route. It resolved an issue that needed to be resolved.

“They’re a great company. They’re continuing to grow. I think it’s going to be a significant opportunity for Lansing and the community,” he said.

Lt. Governor Brian Calley also praised the investment in a statement, saying, “Jackson’s investment and the jobs it has generated demonstrate that Michigan’s business climate and world-class talent are putting our state at the top of the nation’s best places to locate, expand and grow new jobs.”

FLINT WATER PIPE: The MSF also approved a $3 million investment to finance a new water connection pipe in Flint for the acquisition, construction and installation of a water pipeline to connect the city’s water treatment plant with the Karegnondi Water Authority’s water supply system. The Investment supplements a 44.2 million grant by the Department of Environmental Quality to cover the estimated total cost of $7.5 million. Construction is expected to be completed by the end of the year, officials said Tuesday.

But Senate Minority Leader Jim Ananich (D-Flint) was not exactly impressed the loan to help build a federally required parallel pipeline to test water from the new KWA.

“My neighbors can’t drink their tap water. Flint is not recovered. A year has passed and we’re still in the same situation,” he said in a statement late Tuesday. “This recovery could have been handled so much better. Loans will not solve this problem – we expect real change.”

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