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Posted on Thu, Mar. 18, 2004

State offers GM, German supplier, tax breaks to retain manufacturing jobs

Associated Press

DETROIT - General Motors Corp. and a German auto supplier have been offered tax credits by the state in a bid to retain and create new manufacturing jobs in southeast Michigan.

Gov. Jennifer Granholm announced Wednesday the approval of a $10.4 million Single Business Tax Credit over 20 years to entice GM to invest $299 million in upgrades at its Warren Transmission plant. The move, if approved by GM, could save 518 jobs at the plant.

The incentives were offered through the Michigan Economic Development Corp. and come at a time when the state is trying to curtail further losses in manufacturing sector jobs.

"Michigan continues to fight aggressively in the global arena to retain manufacturing jobs," The Detroit News quoted Granholm as saying in a statement. "The incentive package...puts us very close to sealing the deal and ensuring that these jobs stay in Michigan."

Separately, Dr. Schneider Automotive Systems Inc. of Kronach, Germany, will receive a $3.1 million tax credit over 15 years to build a plant in Brighton that could employ 350 people by 2011. Schneider, which makes interior trim parts for automobiles, is expected to break ground in April. The plant is scheduled to open in early 2005.

The offers come after legislators last week also approached Southfield-based Lear Corp. to see whether credits or incentives may encourage it to not merge two Grand Rapids plants. The mergers could eliminate at least 400 jobs.

But some economists are skeptical whether the incentives will have much of an impact on the companies' decisions.

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