By Charles Sercombe
American Axle & Manufacturing found out that shipping jobs out of the country has its consequences.
On Tuesday, the Detroit City Council unanimously rejected the company’s request to extend its renaissance zone tax exemption to 2018.
American Axle had promised to invest $6 million into its new headquarters and hire 20 information tech employees if the tax break was continued.
But the Detroit council was ticked off that the company was given tax exemptions several years ago and then laid off thousands of workers and moved its manufacturing to a new plant in Mexico.
Hamtramck city officials are not entirely sympathetic to the company. Hamtramck lost $500,000 a year in taxes when American Axle suddenly announced it was closing down four years ago.
The company announced it was shutting down right after a 12-year tax break expired in Hamtramck, and also right after a bitter UAW strike that resulted in workers agreeing to slash their wages and benefits by half.
But never say never, despite the very bitter feelings left after the strike.
“Nobody is disposed toward giving a tax break,” said Mayor Karen Majewski, “but it depends what the plan is and what the trade-off will be.”
It is possible that American Axle will one day lease out its plant to another manufacturer.
That’s a plan city officials are hoping will happen.