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So…what will happen to GM Fort Wayne Assembly, where they make Silverado and Sierra (gasoline powered) trucks?
It’s not going away. GM plans on converting its entire offering to electric-only in the 2030s. At some point, the Fort Wayne plant will likely also be converted to make electrics.
“will generate more than $35 billion in personal income during the next 20 years, Whitmer said.” – How the heck do they generate this information. That’s seems highly unlikely and I’m pro EV, and currently own Volt.
Math: $35 billion / 20 years = $1.75 billion per year. Given that those jobs are union jobs, I think it’s not unreasonable to figure that the pay and benefits are close to $80-100,000. The numbers might be puffed up or optimistic by 10-20%, but they’re not off by double. At $100K, they’re suggesting 17,500 full time equivalent jobs associated with these announcements.
5,000 jobs are mentioned in the article, plus however many jobs are in the existing two Lansing plants that will be “maintained” by additional investment (approximately 4,200 according to online records); that’s 9,200 direct jobs. Add GM salaried support staff housed in different locations, plus however many outside construction, maintenance, and support jobs will be involved in building the new plant(s), plus ongoing spinoff jobs at local suppliers and contractors (maintenance, repair, trucking/transportation, warehousing, etc.). It’s not crazy to suggest a total of 17,500-20,000 jobs would be supported by these plants.
Chris B. – Your calculations are in the ballpark, and they do even not include the residual economic benefits when those salaries are then spent in the local market on everyday consumer spending. This is a huge win for Michigan, and makes whatever incentives the state offered well worth it. Hoosier economic development leaders should be wondering why Indiana is being left in the dust consider both this deal and the recently announced Intel deal in Ohio. Indeed, what was the last big new deal that Indiana landed?
Indiana needs to start focusing on enhancing quality of life rather than incentives. Places like Pittsburgh, Minneapolis, Austin, and Columbus are eating Indy’s lunch. Meanwhile, our State Legislature keeps passing pre-emption laws as a way to punish Indianapolis and make people not want to live here with a visceral social agenda.
A T. – Good point, and I actually think it’s a combination of both economic incentives and quality of living that matter. Indiana falls short on both accounts because of its frugal fiscal mindset.
Thanks Brent. Back in the dark ages, when I studied economics, it was called “the multiplier effect” and large-item, large-scale manufacturing had the highest such multiplier.
I agree that my back of the envelope estimate is probably a little high on wages and low on number of jobs. 1:1 direct to spinoff jobs is low for this kind of factory and investment when you consider also the capital equipment manufacturers.