* Crain’s…
Illinois’ efforts to lure a major electric vehicle battery plant here finally may be close to striking gold, as Gov. J.B. Pritzker is personally negotiating with multiple companies to come here.
Among the lures: hundreds of millions of incentives, in part coming from a recently authorized state “deal closing fund,” and in part a willingness by local municipalities to consider the type of long-term property tax breaks that factory owners are demanding. […]
Much of the chatter is about a site just off of Interstate 80 in Morris, 24 miles southwest of Joliet and 62 miles from downtown Chicago in Grundy County.
The deals are serious enough that Pritzker interrupted leadership talks in Springfield on a new state budget a few days ago to travel to Morris and meet with executives of the interested company to tour a site on the east end of town, multiple sources with direct knowledge report. It’s not known if Pritzker joined in the helicopter tour of the land, but he reportedly offered more than $600 million in potential incentives for the plant.
Fingers crossed, but not counting on anything.
* As you’ll recall, Stellantis’ Belvidere plant was idled months ago. From January…
Illinois has submitted what could be its best offer to keep the Belvidere Assembly Plant operating and save what could be thousands of jobs.
U.S. Sen. Tammy Duckworth, D-Illinois, said during a visit to Rockford that her office is supporting local and state officials in their efforts to keep the Stellantis plant open in Belvidere where 5,000 people worked a few years ago. Although details are unavailable because talks are on-going, Duckworth said the state submitted its latest offer Friday night.
Almost five months later and still no word on Illinois’ “best offer.”
* And this is ominous news from Ford…
Ford Motor Co (F.N) on Monday unveiled an ambitious strategy to profitably ramp up electric vehicle sales but faces a challenge to slash $7 billion in costs and regain credibility on Wall Street. […]
Ford, whose shares fell 1% at midday, estimated its total costs are $7 billion higher than its competition.
Also…
One way is to reduce investment in hypercompetitive market segments such as two-row smaller SUVs, [Ford CEO Jim Farley] told industry analysts.
Uh-oh. Ford’s Chicago plant, the oldest factory the company operates, assembles the two-row Ford Explorer. It does, however, assemble the three-row Lincoln Aviator.
And, of course, Rivian is having its own problems. Oy.
* Remember this column I wrote in February?…
Volkswagen filed a federal lawsuit in December describing a bill that overwhelmingly passed both Illinois legislative chambers and was signed into law in 2021 as “crony capitalism at work: redistributive legislation that takes hundreds of millions of dollars from some (but not all) motor vehicle manufacturers and, for no public purpose, deposits that money directly into the pockets of politically favored Illinois [car] dealers.” […]
The manufacturers say the law is costing the industry $240 million a year. Yes, you read that right. $240 million. Per year. They claim Illinois has the highest warranty repair costs in the nation. By far. […]
The subsidies the state can offer simply don’t compare with the gigantic annual cost of that 2021 law. Couple that with our high local property taxes (these electric vehicle plants take up huge amounts of space) and other costs and hurdles (Ohio, like Illinois, is not a “right to work” state but has a new concierge system to quickly clear red tape), and you can see why the state hasn’t yet convinced a national or international corporation to construct an electric vehicle-related facility here.
If Pritzker can lure a big, jobs-rich EV-related plant here, convince Ford to keep its plant open and prod Stellantis into reopening its plant, then he’s a hero. But color me skeptical on all three.
I try hard not to be a negative Nellie, but this state has a well-deserved toxic reputation with the auto industry.
…Adding… According to this article, Georgia gave Hyundai a $1.8 billion incentive package for an electric vehicle plant. North Carolina used $1.2 billion in incentives to land VinFast, a Vietnamese electric vehicle manufacturer. And South Carolina’s $1.3 billion state incentives package for Volkswagen included a $200 million loan from the state. Illinois’ $600 million kinda pales in comparison.
- Adam Laroach's son Drake - Thursday, Jun 8, 23 @ 12:21 pm:
Great coverage on this, thank you.
- Google Is Your Friend - Thursday, Jun 8, 23 @ 12:33 pm:
==Uh-oh. Ford’s Chicago plant, the oldest factory the company operates, assembles the two-row Ford Explorer. It does, however, assemble the three-row Lincoln Aviator.==
Not that there isn’t reason to worry, but the Explorer is Ford’s best-selling SUV model and is second overall in that mid-size segment. Considering how much the reintroduced Bronco is growing, it’s less likely Explorer is eliminated and more likely that Edge is eliminated.
https://www.goodcarbadcar.net/2023-us-midsize-suv-sales-figures/
https://www.newsweek.com/ford-americas-top-selling-vehicle-brand-so-far-this-year-1785153
- fs - Thursday, Jun 8, 23 @ 12:37 pm:
== Not that there isn’t reason to worry, but the Explorer is Ford’s best-selling SUV model and is second overall in that mid-size segment. Considering how much the reintroduced Bronco is growing, it’s less likely Explorer is eliminated and more likely that Edge is eliminated.==
I also read that to be aimed at more of the Edge models. Explorers have an option for a third row.
- Rich Miller - Thursday, Jun 8, 23 @ 12:38 pm:
===Not that there isn’t reason to worry===
There is. The absenteeism rate at that plant is said to be astronomical.
- Steve M - Thursday, Jun 8, 23 @ 12:46 pm:
The Explorer seems to be pretty popular with police fleets as well since rear drive sedans have gone the way of the dodo. While they can’t get good mileage, they’re probably a more efficient option than the full-size Chevy Tahoes for the PDs.
- Dan Johnson - Thursday, Jun 8, 23 @ 12:46 pm:
It would be better if we solved the structural issues with the auto industry instead of spending scarce public funds on company-specific deals to overcome the (real or perceived) costs of those structural issues.
Then lots of smaller companies could create or maintain the jobs instead of expecting an elected official to be responsible for luring a large company here.
Big gap between what the economists say about company-specific deals (almost always useless as broader factors drive decision making plus the money would be better spent elsewhere on lower taxes or higher investments for all) and the public perception of some voters / voices of the role of elected leaders (if you spend enough of our money to buy the jobs, good! if not, bad!).
A structural problem.
- Anon221 - Thursday, Jun 8, 23 @ 12:48 pm:
Rivian’s worth woes might impact their planned Georgia plant, too.
https://www.ajc.com/news/appeals-court-largely-sides-with-state-in-case-over-rivian-incentives/AJITP33C7ZBKLAG7JW5V3TIF7A/
- Donnie Elgin - Thursday, Jun 8, 23 @ 12:48 pm:
“Georgia gave… North Carolina used… And South Carolina’s $1.3 billion state incentives package… Illinois’ $600 million kinda pales in comparison”
Those locations all are in RTW states – so Illinois comes up short on the cash/tax incentives and the labor environment.
- Let's be real on this... - Thursday, Jun 8, 23 @ 1:45 pm:
“Then lots of smaller companies could create or maintain the jobs instead of expecting an elected official to be responsible for luring a large company here.”
Whether we like it or not, incentives are the name of the game for luring manufacturers. Other states throw money at these opportunities so unless we want to close up shop to manufacturers, we need to be very competitive.
“I try hard not to be a negative Nellie, but this state has a well-deserved toxic reputation with the auto industry.”
And you should. Illinois was warned not to pass that ridiculous bill but they ignored the warning and told the industry to get stuffed. It will take years to overcome that mistake. I’m hoping we will land or keep these facilities but also remain skeptical.
- thisjustinagain - Thursday, Jun 8, 23 @ 2:22 pm:
Can Illinois afford bigger give-aways, unlike the Southern states??
- Lucky Pierre - Thursday, Jun 8, 23 @ 3:15 pm:
I thought the Governor was against long term property tax certainty to facilitate huge developments?
Nice to see him acknowledge these incentives create a lot of jobs and generate incremental economic growth
- DMC - Thursday, Jun 8, 23 @ 3:30 pm:
We should be very concerned about the Ford Plant. They can’t keep workers, c’mon new Mayor and just left Mayor who say they want to solve crime with jobs, and the gangs messing with the plant is a recipe for disaster. It could be closed within the year.
- Lamb - Thursday, Jun 8, 23 @ 3:51 pm:
Correct me if I am wrong but I believe the Explorer only comes with a 3rd row. Maybe thinking of the Escape?