General Motors bestowed something on Orion, and now the township has made good on the promise that helped keep the carmaker here.
There was no opposition from the audience at the public hearing concerning the generous 25-year tax abatement for GM. Instead, the crowd clapped after the Orion Township Board of Trustees approved the motion 7-0 at their regular meeting July 20.
The 100-percent abatement will allow GM to not pay any taxes on new personal property. Since GM has said it plans to spend about $600 million retooling the plant for a new, unnamed small car, the break is significant.
According to Gary Malkus, plant manager of Orion Assembly, the abatement will apply to the upgrades necessary to prepare the plant for the new line.
Area suppliers will benefit by providing products and services for the retooling, Malkus said.
It’s been estimated the township will give up around $100 million in taxes in the 25-year period.
It was part of a high-drama deal brokered while Orion competed with plants in two other states for the new car.
In the end, Michigan and Orion Township proposed the sweetest deal. The state, through the Michigan Economic Growth Authority (MEGA), granted GM a 20-year, 100-percent tax credit. This is what made GM eligible for the township to offer such a large abatement, Supervisor Matt Gibb said.
In addition to incentives from Oakland County, it was enough for GM to pick the Orion plant over others in Wisconsin and Tennessee.
‘This proposed investment would not be possible without the outstanding cooperation of this township and the state of Michigan,? Malkus said. ‘With [it], GM will be the only automaker, foreign or domestic, here in the United States, to build a small car. And we’ll do it right here in Orion Township.?
There will be about 1,200 hourly and salaried workers on an expected two-shift operation, Malkus added.
Gibb said he was hopeful the number of workers would rise in the future. He was also quick to point out that the abatement didn’t mean GM wasn’t going to be completely safe from the taxman.
‘They’ll still pay taxes,? Gibb said.
The township will still capture money from real estate taxes and perhaps on personal property already in place that is under a 50-percent abatement.
But the tone of officials suggested keeping GM in Orion–and the related jobs–was of utmost importance.
‘I think it’s significant to note, for the record, that none of the taxing units came forward to object to this tax abatement, which means we have the support of the school district, the community college, the library, and…the county,? said Trustee JoAnn Van Tassel.
Only two people came to the podium during the public hearing, both from Oakland County and both lending their support.
Lynda Earhart, a senior business development representative with Oakland County, said she was there on behalf of Maureen Krauss and Doug Smith. Earhart said Oakland County is committed to about $1.5 million in job training support for the plant.
Oakland County Commissioner and former Orion trustee Mike Gingell also urged the board to grant the abatement to GM.
‘The plant is a major economic source in our community. The new investment is going to give us all a future,? said Gingell.