Michigan awards GM $130 million in tax incentives

GM's proposed $838 million in projects includes upgrades at the automaker's Detroit-Hamtramck assembly plant, Pontiac Metal Center, Bay City Components Plant, and the GM Technical Center in Warren, Mich., along with construction of the new facility on a brownfield site in Flint, Mich., the automaker said.

The Michigan Economic Growth Authority approved a state tax credit worth about $122.5 million over 15 years, the Michigan Economic Development Corp. said in a statement. The authority also approved a brownfield tax credit worth $10 million.

In addition, the cities of Flint, Pontiac and Bay City approved tax abatements related to the project.

Neither the state nor GM would detail the products GM is planning for the five facilities, but the MEDC's statement said the incentives would "encourage General Motors to develop and produce the new Chevrolet Volt in Michigan, along with additional advanced energy and conventional fuel vehicles and components."

GM has said it plans to build its Chevrolet Volt electric car at the Hamtramck plant, and Flint has been pegged as the site of a new plant to build four-cylinder engines for the Chevrolet Cruze, a new small car that will go on sale in the U.S. in mid-2010.

GM spokeswoman Sharon Basel said the tax incentives are important for GM to build a business case for the projects, given the competitive nature of the automotive industry.

The Detroit-based automaker said it would make an announcement Thursday at its Flint Engine South plant related to its powertrain operations and technologies in the city. GM Chief Executive Rick Wagoner and other company officials, Michigan Gov. Jennifer Granholm, and Flint Mayor Donald Williamson are among those scheduled to attend.

If GM decides to go forward with the projects, they are expected to retain 3,723 jobs at GM and a total of 14,380 jobs in Michigan, according to the MEDC.

GM shares fell 86 cents, or 7.4 percent, to $10.72 Tuesday.