CHICAGO - The battle between a Michigan township and General Motors Corp. over a property tax abatement and jobs at a soon-to-be shut-down auto plant is moving to the state Supreme Court.
Yesterday, the Michigan Court of Appeals overturned a lower court decision that ordered the plant to remain open.
The appeals court reversed a February decision by Washtenaw County Circuit Court Judge Donald Shelton that General Motors has an "informal contract" with Ypsilanti Township to maintain 4,900 jobs at the Willow Run assembly plant in return for a 50% tax abatement granted by the county in the 1980s.
Doug Winters, the township's attorney, said Ypsilanti will take the case to the Michigan Supreme Court.
"The township remains confident that the supreme court will take this appeal, which presents issues of vital public importance, and will reinstate Judge Shelton's opinion," Winters said in a press release.
"The township feels it will ultimately prevail in its position that General Motors made a binding promise that it cannot breach with impunity," Winters said.
Ypsilanti Township filed the suit in April 1992, two months after the automaker announced it would shut the plant in September 1993 as part of a consolidation plan.
General Motors called the lower court ruling "unprecedented" and appealed the decision to the state appeals court.
Yesterday, Lee Shutzman, General Motors' attorney, said the automaker was pleased with the reversal.
"The court of appeals decision confirms that the decision of the circuit court was plainly wrong," Shutzman said in a press release. "Aside from its obvious importance to [General Motors] and the thousands of [General Motors] employees directly affected by the decision, the issue has statewide and even nationwide significance."
Employees and local governments "are better served by working with [General Motors] through a joint transition process rather than by engaging in this type of meritless litigation, which only hurts everyone involved," Shutzman said.
But Winters argued that corporations might be tempted to view the appeals court decision as "a license to mislead municipalities."
"We have not yet begun to fight," he said.
Last month, Standard & Poor's Corp. affirmed and removed from CreditWatch the ratings on $3.2 million of Ypsilanti Township Building Authority and Ypsilanti Community Utilities Authority debt. The rating agency placed the ratings on CreditWatch with negative implications in March 1992 after General Motors said it would close the Willow Run plant.
Standard & Poor's officials said thatwhile the plant closing would be a "big economic shock to the area," there would be no immediate impact and the governments would have time to make budgetary adjustment.