Auto Employment In Lansing Plunged Despite Earlier Round Of State GM Subsidies

In 1999, the Lansing State Journal published an editorial with the headline: “Job-maker MEGA a true success.”

The editorial praised a state bureau called the Michigan Economic Growth Authority for its involvement in General Motors locating a new plant in Lansing. The plant was projected to create as many as 2,000 jobs.

“Taken with other, auto-related industries locating regionally, it means more than 2,500 jobs for mid-Michigan,” the editorial claimed.

That 1999 editorial also singled out the Midland-based Mackinac Center for Public Policy for its criticism of MEGA.

“Critics of MEGA, such as the conservative think tank Mackinac Center, liken the program to corporate welfare for a favored few. ... MEGA is a true success story and should be trumpeted by Michigan – and by the Lansing region in particular. Quite literally, MEGA means work.”

As with many media reports promoting high profile corporate subsidies awarded the state, the big job projections and promises this one repeated for the Lansing region did not pan out.

General Motors did locate that plant in Lansing, but the grand benefits projected for the region were never realized.

In 1999, the year this subsidy was granted, there were 15,400 transportation equipment manufacturing jobs in the Lansing region. By 2005 that figure had plummeted to 8,000. In the years since the Lansing area jobs in this sector have never recovered to the 1999 level, much less exceeded it. As of December 2021 the number was 8,100, practically unchanged from 2005, and a little more than half of the 1999 level.

The news at the end of January 2022 has again been filled with glowing stories about another round of state subsidies for four new GM projects. A Jan. 25 Detroit Free Press story pronounced, “Economists say that, in turn, will create thousands more ancillary jobs.”

Michigan Capitol Confidential is published by the Mackinac Center for Public Policy.