Flint Offers GM Millions in Tax Breaks for Locating Volt Engine Plant There

Flint Offers GM Millions in Tax Breaks for Locating Volt Engine Plant There

Flint, Michigan -- the city made famous by a Michael Moore documentary about the devastating financial and emotional hits the city suffered as General Motors laid off thousands of workers there while reaping record profits -- has agreed to give GM millions of dollars in tax incentives if the automaker builds an engine plant for the Chevrolet Volt in the poverty-sticken community.

GM asked for the tax breaks to help support its $359 million investment in a new plant where workers will build 1.4-liter turbo engines for the Volt plug-in hybrid, as well as GM's new compact car, the Chevy Cruze. The proposed 500,000-square-foot facility, which would be built near Flint Engine South and Flint Truck, would retain about 300 jobs.

The automaker plans to begin production of the Volt in late 2010.

GM's request for incentives, approved Monday by the Flint City Council, stirred unease among some residents in GM's birthplace, where thousands of jobs have been eliminated over the years.

"A lot of people still feel ... General Motors owes us more than just a couple hundred jobs," Councilman Jim Ananich said the other day, according to an article in The Detroit News. "But as competitive as the market is and the trouble General Motors is having, we have to help them with whatever we can do to keep them competitive."

The city extended an existing abatement of 100 percent of the personal property taxes until 2033 and granted GM a 50-percent, 15-year abatement of real property taxes.

The City Council also approved a GM redevelopment plan for the proposed engine plant that makes GM eligible for state tax credits. The automaker is further seeking billions of dollars in low-interest loans from Congress to develop fuel-efficient vehicles such as the Volt, and GM is lobbying Congress for a $7,000 federal tax rebate for Volt buyers.

The Census Bureau reported Tuesday that a whopping 35.5 percent of Flint residents live in poverty, with more than one in every three Flint residents out of work.

Scott Doggett, Contributor

Scott Doggett:  is an AutoObserver.com Associate Editor.