The State of Michigan this week had great news for its constituents, with the officials nailing a deal concerning a new tax credit agreement with the second largest US automaker – Ford.
The duties deal is a good signal that Ford is going to invest another $3.1 billion in the state, with the latter also able to cope faster with a $9.38 billion liability created by businesses cashing in the tax credits. The new arrangement, which has been passed unanimously by the Michigan Strategic Fund board on Monday, has Ford under commitment to spend another $3.1 billion towards the development and production of electric vehicles, the only way the carmaker can be sure it would be given the maximum amount of tax credits. The company has not offered yet any details about how, where and when the additional investments would be made, though the deal specifically targets manufacturing equipment.
The deal is mutually beneficial – the state is guaranteed additional investment from one of Michigan’s biggest employers, which in turn could lead to new deals with other large companies on the same basis. On the other hand, Ford is promised new tax credit payments. “Michigan is Ford’s home and central to our business. This MEGA agreement will be a strong factor when we decide where to invest,” commented Charlie Pryde, regional director of government relations for Ford. The automaker was previously granted another two “MEGA” tax credits between 2009 and 2011 in an effort to assist the automaker retain jobs in the state – Ford currently employs 35,992 in Michigan.