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Pritzker’s role in the UAW’s Stellantis deal

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Illinois

* My weekly syndicated newspaper column…

I told you back in January that if Gov. J.B. Pritzker managed to help convince Stellantis to reopen the Belvidere auto assembly plant and even expand, “he’ll have overcome some gargantuan hurdles.”

Credit where credit is due: Pritzker helped the United Auto Workers Union and the White House put together a deal with Stellantis to reopen the shuttered plant and expand it. According to Crain’s Chicago Business, the UAW told its members the company would spend $5 billion on the project. It’s not clear as I write this how much would come from the state.

It’s plainly obvious to anyone that overcoming the state’s lousy reputation with manufacturers is a monumental task. All any CEO has to do is turn on one of the business cable TV stations to see the Illinois-bashing in full glory, even though it’s often based on outdated claims from groups that make money from bad-mouthing the state’s reputation.

But the state incentives contained in Pritzker’s Reimagining Energy and Vehicles Act were instrumental in attracting the massive Gotion electric vehicle battery plant to Manteno.

At the same time, the state has also tried to help build a supplier and training infrastructure for manufacturers — which it calls an “eco-system.” More than two years ago, for instance, the state helped open an EV worker training program at Normal’s Heartland Community College as EV-maker Rivian scaled up its production.

The REV Act’s income tax credit program was then expanded to 75% of state payroll taxes, and to 100% for “underserved areas.” The REV Act was also expanded to include smaller companies with a minimum $2.5 million in capital investment.

That latter expansion was key to bringing to Decatur a new electric compressor manufacturing facility as a major component of the city’s TCCI Electric Vehicle Innovation Hub that the governor unveiled in August. An innovation and research lab and a worker training facility at the local community college (and in potential partnership with other higher education institutions) will also be part of the new Decatur hub.

Just last month, Netherlands-based EVBox announced it was establishing its new U.S. headquarters in Lake County. The company makes fast-chargers for EVs and hopes to build thousands of charging stations per year.

“We have got the parts suppliers, battery manufacturers, EV infrastructure suppliers, and there are more to come,” Pritzker said at the EVBox announcement, according to NBC Chicago.

The Stellantis plant deal is huge. The state has been working with the company since well before the automaker decided to put the plant on pause earlier this year. Because EV assembly plants usually need a nearby battery facility, the state optioned 250 acres of land across from the Stellantis plant, dangling the prize as just one more incentive to reopen and expand. The revitalized plant will likely build a light truck, and include a battery plant as well as a parts distribution center.

The UAW has had strong reservations about EV manufacturing because it requires fewer workers, and many cars and batteries are being made with non-union labor (including, so far, at Gotion’s future Manteno facility). But the union leadership insisted that reopening the Belvidere plant was a top priority during its bargaining with and subsequent strike of Stellantis. The White House was reportedly heavily involved as well.

Crain’s also reported that the revitalized plant could employ as many as 5,000 workers, which is far more than the 1,200 laid off in February.

If Illinois’ earlier failures fed off themselves in a vicious cycle, the hope now is the recent successes will lead to even more gains as corporations see that Illinois isn’t what they may have thought it was.

The idea has been to provide “white glove” concierge service to corporate execs through the Illinois Department of Commerce and Economic Opportunity. The governor’s office claims companies can easily and quickly obtain information and assistance from DCEO about their investments. DCEO also offers the companies help with permitting to cut through state and local red tape.

The governor himself has also taken a very active role, his office says, running down leads and making and fielding countless inquiries. He’s also positioned himself as the state’s top economic cheerleader.

This sort of “all hands on deck” approach appears to really be paying off. And it’s been darned impressive to watch. Everyone, including the General Assembly, deserves credit.

So maybe now the state can use this template to tackle some other problems, like high property taxes (business development is a big key, but not the entire solution) and the functioning of some notorious bureaucracies, including DCFS.

posted by Rich Miller
Monday, Nov 6, 23 @ 2:18 pm

Comments

It’s so refreshing to see a Governor pursuing business opportunities for the state instead of trashing it.

Comment by Norseman Monday, Nov 6, 23 @ 2:30 pm
Good last paragraph Rich. Those are the two biggest structural challenges

Comment by walker Monday, Nov 6, 23 @ 2:43 pm
=high property taxes=

They will have to increase other taxes and demonstrate to local government that the state would be a reliable source of revenue. If the state did that, property taxes would come down. History is not on their side on this one.

What Pritzker is doing is akin to what Reagan did in the 80’s nationally. Different political philosophies at work, but changing the morale and attitude to the positive.

Comment by JS Mill Monday, Nov 6, 23 @ 2:53 pm
Kudos to the Governor for his approach to this. Roger Smith of GM said the bidding for the Saturn plant (that ended up in Spring Hill, TN) got out of hand, and it started with Jim Thompson.

Excellent job Governor!

Comment by Anyone Remember Monday, Nov 6, 23 @ 3:03 pm
Great article and very realistic. No doubt Illinois has challenges, but it’s in better financial shape and position to offer corporate incentives packages. The “Mayor Daley approach” was a seat at the table for both business and labor, and a “let’s make it happen” attitude. That seems to be working well now with Pritzker.

Comment by Grandson of Man Monday, Nov 6, 23 @ 3:44 pm
The contrast with Rauner really is something. It shouldn’t feel this nice to have a Governor who actually cheers on the state.

Comment by Nick Monday, Nov 6, 23 @ 4:15 pm
===The governor himself has also taken a very active role, his office says, running down leads and making and fielding countless inquiries. He’s also positioned himself as the state’s top economic cheerleader.

This sort of “all hands on deck” approach appears to really be paying off. And it’s been darned impressive to watch. Everyone, including the General Assembly, deserves credit.===

Elections matter.

Great read, Rich. It’s this type of “look-see” that’s needed when the negative nelly thinking is pushed by the grifting vessels of the absurd.

Comment by Oswego Willy Monday, Nov 6, 23 @ 5:49 pm
Great deal-making straight out of “Big Jim” Thompson’s playbook. I hope, however, that it will not come at the expense of ordinary taxpayers and property owners. Local governments showered tens of millions of dollars in property tax abatements on Amazon for its Markham warehouse, even as Cook County property-tax reassessments are now resulting in skyrocketing assessed valuations.

Comment by Ares Monday, Nov 6, 23 @ 6:02 pm