McDonald Rivet voices doubts about effectiveness of corporate welfare

U.S. Rep. Kristen McDonald Rivet expressed skepticism of state business subsidies in recent comments about the closure of a taxpayer-supported tech business, a view in sharp contrast to her past support of taxpayer subsidies for private businesses.

The Bay City Democrat blamed President Trump’s economic policies for the closure of SK Siltron CSS, which manufactures silicon carbide wafers used in electric vehicles and other high-powered products. But McDonald Rivet also acknowledged that the subsidies she supported in the past failed to benefit Michigan taxpayers or bring success for the project.

“We did not lose the SK Silitron plant because of an economic incentive plan. We lost because the (EV) market is collapsing,” she said in an Aug. 20 news conference addressing the failure of the business. “But it's the market forces that keep businesses alive. Not tax incentives, not economic incentives. It's market forces. And when those winds are blowing against you, it's very hard for businesses."

SK Siltron announced in July that it would close the Bay County facility and lay off 140 workers.

“Based on changes in market conditions, SK Siltron will wind down its U.S.-based SK Siltron CSS subsidiary,” spokesman Joe Guy Collier told MLive. “SK Siltron appreciates the hard work and dedication of its Michigan employees as well as the strong support from local, state and federal officials.”

The plant received nearly $6 million in incentives. McDonald Rivet supported that largesse, along with millions in other taxpayer subsidies, when she served in the Capitol as a state senator.

"I secured funding that helped bring new manufacturing sites to mid-Michigan, including Corning, SK Siltron, and Hemlock Semiconductor, and, hopefully, a major project in Mundy Township soon," McDonald Rivet told the Midland Daily News in October 2024.

During her senate career, McDonald Rivet supported a subsidy of more than $100 million to Corning, a company that manufactures solar components. Those incentives include a $68 million performance-based Critical Industries Program grant through the Strategic Outreach and Reserve Fund, a 15-Year State Essential Services Assessment Exemption valued at $12.3 million, and a $29 million Strategic Site Readiness Program grant to Thomas Township for public infrastructure, according to a 2024 press release.

SOAR was defunded in the 2025-26 budget.

McDonald Rivet praised the Biden administration’s 2024 $325 million grant to Hemlock Semiconductor in 2024.

“The return on this investment, and all the high-paying jobs it will generate, will have a positive impact on mid-Michigan families now and for generations to come,” she stated in a press release.

McDonald Rivet voted in the Senate Appropriations Committee to approve, at the time, $175 million in subsidies for the hotly disputed Gotion battery manufacturing plant in Big Rapids, a project that made national news when local residents pushed back against the plan.

McDonald Rivet blamed “misinformation” for the dustup during a 2023 event at MI Element in Midland. The project eventually collapsed when the Hefei, China-based company pulled out of plans to open its doors in Michigan.

She also called the Michigan Economic Development Corporation’s March 2024 award to four companies “good news for our Bay region’s economy and workers.”

McDonald Rivet did not respond to a request for comment.

In the Aug. 20 press conference, McDonald Rivet posited that the failure of SK Siltron was attributable to Trump’s tariff policies and the elimination of electric vehicle subsidies via the One Big Beautiful Bill.

The White House did not respond to an email seeking comment, but a Michigan expert noted that McDonald Rivet’s assessment omits the history of low demand for electric vehicles.

Chaotic tariff policy and the Iran war have hurt Michigan’s economy and raised energy prices, Chris Douglas, associate professor of Economics at the University of Michigan-Flint, told CapCon in an email.

“However, what we are seeing in the case of this business and others is that there is very little consumer demand for electric vehicles absent government subsidies. My guess is that cost (including the cost of installing a charger at home), range, and charging time are all limiting factors that are preventing many consumers from switching from internal combustion engines to EVs. If anything, high oil and gasoline prices should have made EVs more desirable to consumers, but this does not appear to have happened. Essentially through tax subsidies, the government created a demand for a product there otherwise would be little consumer demand for, so it is not surprising that as these subsidies are removed, demand is subsequently falling.”