CHICAGO -- Michigan governments are fighting back against the loss of jobs caused by auto-related plant shutdowns or moves.
The latest volley has been fired by Highland Park and Wayne County officials, who are seeking at least $42 million from Chrysler Corp. to help pay for bond-financed plans to rejuvenate the city of 25,000 when the automaker moves to another Detroit suburb.
Officials this week will ask Chrysler for cash and development funds that equal or exceed the $6 million in annual income taxes, personal property taxes, and real property taxes the city and the county will lose when the company relocates, according to Arthur Blackwell, the county commission's chairman. He added that the county and city would seek from the automaker at least $6 million a year from 1993 to 2000.
In September, Chrysler announced it would move its headquarters employing more than 6,000 workers, to Auburn Hills in Oakland County, Mich. The phased move would be completed by 1995. Since 1925 the company has been located in Highland Park, which is surrounded by the city of Detroit.
Blackwell said negotiators will ask Chrysler to help attract new business to the Chrysler site. Suggestions include transforming the site into a high-technology auto plant or a wholesale-retail shopping or distribution center, Blackwell added.
Blackwell expects the issuance of bonds to be a part of any future development plans for the city. "We would assume that an authority would be set up to create indebtedness for a long-range capital improvement plan," Blackwell said. He added that it was premature to estimate the amount of bonds that would be issued.
Chrysler's headquarters in Highland Park covers 144 acres and includes 25 buildings.
However, if the existing Chrysler buildings cannot be used, the city will request that the automaker pick up the tab for demolition and environmental cleanup of the facility. Those tasks could total over $80 million, Blackwell said, adding that the money would be better spent on capital improvements for the city.
"But we'd much rather use the $80 million for a joint venture partnership" with Chrysler, Blackwell said.
If the talks fail, Blackwell said, county and city officials will consider taking legal action against Chrysler.
Tom Houston, spokesman for Chrysler, declined to comment specifically on any of the proposals.
"We are open to hear what they have to say," Houston said. "We will listen to them and reach a fair and equitable agreement."
Chrysler is not alone in raising the ire of local governments. The announcement by General Motors Corp. in February that it was closing an assembly plant in Ypsilanti Township next year led the township to file suit against the automaker in April.
The suit, which has been supported by the Michigan attorney general's office, charges that General Motors cannot close the plant because the township granted a personal property tax abatement for the facility. Officials at General Motors have argued the suit has no merit. The case is scheduled for trial in Washtenaw County Circuit Court on Jan. 11.
While the Willow Run plant in Ypsilanti Township was one of five slated for closure by General Motors earlier this year, the state got more bad news last week when the company announced that three more plants are slated for shutdowns.
One is a truck assembly plant in Flint employing 4,450 people that will continue to operate through the 1995 model year. Another is metal fabricating plant in Kalamazoo that employs 3,100 workers and will cease operation at the conclusion of the 1995 model year. The third closing is a component plant in Livonia with 2,000 employees, scheduled to shut down in the fourth quarter of 1993.
Many Michigan communities have also been the target of appeals by General Motors to lower the company's property valuation. Earlier this year, Flint, which now has two auto plants slated to close in 1995, agreed to pay General Motors $7.2 million over nine years to compensate the automaker for the inflated value of its properties between 1983 and 1991.
General Motors has been appealing its property values in the state since 1985 and has seven appeals currently pending before the Michigan Tax Tribunal. Those appeals concern the company's properties in Constantine, Delta, Grand Blanc, and Orion townships and in the cities of Grand Blanc and Warren.
John Truscott, spokesman for Gov. John Engler, said the governor hopes to stem the tide of auto-related job losses in the state by pushing a plan in the Legislature next year that would include a minimum 20% cut in property taxes and a cap on assessments. A similar plan was rejected by voters last month.
For cities devastated by plant closings, Truscott said the governor supports assistance that would make cities more attractive to economic development through the expansion of enterprise zones and increased job training.
In Highland Park, Chrysler's relocation announcement was just the latest bad employment news for the city. City officials have projected that 57% of the job base, or about 8,500 employees, will be lost over the next few years from Chrysler and two of the city's other major employers, Detroit Osteopathic Hospital and Sears Roebuck and Co. Those two employers have already closed.
Highland Park does not have any debt rated by Standard & Poor's Corp., Moody's Investors Service, or Fitch Investors Service Inc.
"No city in America has had to face what we are up against," Highland Park Mayor Linsey Porter said. "But Highland Park still has tremendous assets which can help our recovery."
Meanwhile, with the assistance of state officials, Highland Park and Wayne County officials have formed a public-private partnership to help the city confront its ongoing economic decline, Blackwell said. The partnership is expected to announce an economic master plan for the city by April, Blackwell said.