By: Mark Glennon*
The positive side of the ledger has much that’s good for Illinois in the recently announced deal between the United Auto Workers and Stellantis.
“This will be thousands of jobs, billions in investment, and a huge win for Illinois,” Gov. JB Pritzker said in a statement last week. The Stellantis facility in Belvidere, idled with heartbreaking layoffs just before last Christmas, will be reopened to produce electric, mid-sized trucks. Belvidere will get a new battery plant and a regional parts distribution hub. Crain’s reported Friday that Stellantis will invest some $5 billion in Belvidere and headcount should be 4,000 to 5,000 by 2028.
But Pritzker “declined” to say how big the state’s incentive package will be, nor do we know what the federal government will be putting in. “It’s not yet clear how much money the feds or state and local governments will give Stellantis to rebuild and expand Belvidere,” says a Crain’s piece about how the Biden Administration helped get the deal. The White House, too, did not respond to a Crain’s request for comment.
What will the tab for taxpayers be? While it’s a relief that those laid off will be getting back to work, it’s a question that must be asked.
It’s “likely to be larger than the $536 million deal for Gotion Hi-Tech’s battery-assembly plant in Manteno,” says Crain’s.
That’s scary. Just Illinois’ portion of the subsidies for China-based Gotion comes to over $200,000 per job, an exceptionally big number in the government incentives business, and bigger than any incentive package in Illinois history other than one in 1985 for a Mitsubishi factory.
And we should certainly hope that the combined federal and state package for Stellantis is nothing like Gotion. Gotion is slated to get a total of $8 billion in state and federal subsidies for a plant that will cost just $2 billion to build. It will employ 2,600. In other words, government could have just handed a check for a million dollars each to 8,000 people — over three times the number to be employed by Gotion.
There’s also a question about how much the added employment in Belvidere will cannibalize employment elsewhere.
The new Belvidere hub would come through the consolidation of work from distribution centers in Marysville, Chicago and Milwaukee, according to The Detroit News on Thursday.
“The UAW has agreed to target 19 US facilities for closure in its sellout deal with Stellantis,” says the World Socialist Website, which obtained a copy of the written deal and is particularly unhappy with it. “With the closure of so many facilities,” it says, “it is virtually certain that many workers will be forced to choose between transferring to other Stellantis sites hundreds of miles away, accepting some form of buyout, or simply having to quit and attempt to find employment elsewhere.”
Evidence that at least some of the new jobs won’t really be new is already appearing.
Adding the Belvidere jobs means closing the 30-year-old Stellantis parts distribution center in Naperville, according to a Chicago Tribune Friday report. It will be consolidated into the new facility and its 95 workers may be able to transfer to Belvidere when it opens next year, says the Tribune.
And 100 UAW employees at a Milwaukee Stellantis facility that will be closed will be eligible to transfer to a new Stellantis hub in Belvidere, according to a Friday ABC Milwaukee report. The hub will open in Belvidere in 2024 through the consolidation of work from the Marysville, Michigan; Chicago; and Milwaukee facilities, the story confirmed.
All this comes as government’s massive bet on electric vehicles looks shakier and shakier. “More alarm bells sound on slowing demand for electric vehicles,” as a Reuters headline said last week. E.V. sales are growing, but not meeting expectations.
Ford loses $36,000 for every E.V. it sells. Rivian loses $32,600 for every electric truck it sells. Lucid loses an astonishing $336,000 per E.V. it sells. General Motors recently cut back its E.V. production targets citing slowing demand.
That’s all despite government subsidies that go far beyond the retail tax rebate consumers see. For E.V. batteries alone, there are layers of subsidies. The so-called Inflation Reduction act offers “cash money (tax credits) for mining battery minerals, for refining battery minerals, for putting together battery cells, and for putting together battery packs (or “modules”). If you do all of those things, you don’t get one bonus, you get four,” wrote CleanTechnica.
And who knows what technology may come along that would make current E.V. production obsolete. Toyota last month claimed it has new, solid state battery technology that could revolutionize the E.V. industry. Others think hydrogen power will eventually dominate, and California is already putting up $106 million for hydrogen fueling stations.
There’s a fellow who is better at gambling on technology than government. His name is Mr. Market. His track record is a whole lot better than politicians with industrial policies, and if he loses it’s not on your dime.
We don’t yet know what the new Stellantis deal will cost. Maybe the full package is still being worked out, but if the deal is finalized enough to announce and brag about, we should know more than we do.
Whatever the number is, it will be part of government’s monumental bet on electric vehicles, and it will be your problem if it doesn’t work out.
*Mark Glennon is founder of Wirepoints.
Audio and summary 
If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
“ Is not good to ask questions of the central committees decisions regarding how we spend your rubles. Is counterproductive to the people’s revolution. Da “ says the Czar of the Midwest, comrade Pritzgerov.
All of those employees will be losing their jobs soon. Stellantis will go bankrupt. No one will be able to afford the higher price of their product. It’s just a matter of time. We all think we should be paid more than we are. But, losing your job means you’re not paid at all. Times are tough for all of us under this government. Some words of caution, never blindly follow a Union. Pigs get fatter, hogs get slaughtered.
Living in Belvidere it is good news for the citizens. My hope is that Stellantis will make some type of hybrid Jeep since the plant already made them.There needs to be a smooth transition and going full EV is NOT the answer since the charging stations are sparse at best and takes a long time to charge. The Toyota Rav4 Hybrid is in demand with a waiting list for the 2024 model is over 6 months so a jeep hybrid makes sense. There are some large projects going on here. I just drove by the new WalMart cold storage facility… Read more »
Interesting that you bring up Toyota. Toyota has USA plants just not in Illinois and I assume with the Illinois business climate they wont ever be locating here. Toyota has invented a solid state battery that will offer a traveling distance of 900 miles. So why would the climate alarmists buy a hybrid when they will be able to get a full EV using Toyota technology? Assuming Toyota markets the product Stellantis hybrids will be DOA which is not surprising as Chrysler was a dying brand anyway. Pritzker bought a loser with someone else’s money to provide headlines and buy… Read more »
Another costly and tone-deaf Pritzker move, spending state monies to chase woke policies that are already proven to be unrealistic, wasteful of taxpayer resources, and detrimental to best interests of most people. There’s probably a very narrow sliver of upper-middle class progressively-minded folks who truly desire an EV truck, rather than a Tesla. Manufacturing and selling an EV vehicle that requires substantial government subsidy to sell, that generates a substantial financial loss to manufacturer with every sale, is not a prudent business decision. Not prudent fiscal policy for government agencies subsidizing the EV vehicles. Not prudent business strategy for manufacturers… Read more »
JB said the other day he wants to be the quantum computing capital of the world, or something like that. This is delusional stuff he’s peddling.
The complete lack of transparency strongly suggests that this deal, like the Gotion deal, is primarily for the benefit of a few special interests at the expense of taxpayers and possibly other workers and companies. Prove us all wrong – be transparent.
The government is pulling out all the stops on EVs in an effort to breathe life into them. The American public is largely unimpressed and demand is waning. I like the reliability, cost and infrastructure that supports the 200 year old internal combustion engine so I’ll stick with that. There are plenty of questions and inconveniences associated with EVs. Once Mayor Pete figures it all out maybe enough people will actually support EVs so the government doesn’t have to spend billions to support an unsustainable business model.
I think the Powers That Be (PTB) have been loud and clear: In the future, not everyone will drive, and those who do drive will be wealthy elites in EVs. They understand what this means for the future, limited transportation, 15 minute walkable cities, scarcity of products on store shelves, and ultimately, the deaths of hundreds of millions, if not billions of humans who rely on abundent energy to survive. And they’re OK with that. There’s no shortage of clips from very famous people, saying very loudly, that there are too many humans on the planet, and we need to… Read more »
When Bill Gates needs the USA Today to ‘fact check’ his own comments, you know the jig is up.
https://www.usatoday.com/story/news/factcheck/2023/03/23/fact-check-post-misleads-bill-gates-comment-vaccines-population-growth/11527555002/
What happens to all these EV plant subsidies if Republicans win big in ’24’? I’m sure any new additional fed subsidies are dead. Is Stellantis or Gotion obligated to build plants if the fed $tap$ is cut off?
Of course the answer is “NO”.
Hopefully the cronyism will stop and there will be clawbacks, and possibly prosecutions.