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‘Story of the Year’ revolved around a key financial source

The future of the GM Poletown plant is our “Story of the Year” for 2019. GM had threatened to close the plant, which would have been financially devastating to Hamtramck.


By Charles Sercombe
Now that 2019 has come to pass, it’s time for our annual “Story of the Year.”
And what a year it was: there was the city’s long-standing housing discrimination lawsuit that was buttoned up by the final three houses, out of 200, that were built, or about to be built.
Longtime educator Tom Niczay retired as school superintendent, and his replacement was a first for the district and the nation: Jaleelah Ahmed became the first Yemeni-American woman to hold such a position.
In politics, there was a seismic shift on city council, with the election of three new councilmembers and the ousting of three incumbents.
Former Police Chief Max Garbarino made a dramatic — and for some, controversial — comeback in a newly-created position, a sort of liaison officer for the police department and the community.
But the number one story, the one that had the biggest impact – at least financially for the city – was that of the GM Poletown plant.
What a wild roller-coaster ride it was over the plant’s future.
The saga actually began in November of 2018, when GM suddenly – and unexpectedly – announced it was closing five north American plants – including the Detroit-Hamtramck Assembly plant, as it is formerly known.
Why did this matter so much?
GM had been paying Hamtramck about $700,000 a year, in a special payment plan, in lieu of paying property taxes.
If the plant were to close, the city would no longer have that revenue stream coming in each year. Hamtramck’s annual operating budget is about $16 million, and the loss of $700,000 a year would have been a huge financial blow.
City Manager Kathy Angerer didn’t varnish the truth.
“The GM plant closure is devastating financially to the city,” Angerer said. “This doesn’t include the impact on local businesses or families in our community.”
But as the year progressed, GM suddenly announced it was going to spare the plant (which had just been built in the early 1980s) and would produce electric vehicles there.
Great news, right?
Well, then the proverbial monkey wrench was thrown into the mix.
UAW workers went on strike at all of GM’s plants and facilities, in order to get a new employment contract.
Contract negotiations with the union had broken down, and the union used the age-old tactic of going on strike.
As the strike continued for a few weeks, GM did another turnaround, and announced it was going to close down the Poletown plant.
For city officials, it was “hello” financial crisis, once again.
Our head spinning didn’t stop there, however.
Once the strike was settled, GM announced that the Poletown plant will remain open after all.
Got all that?
Of course, that was not going to be the end of the story.
In short, it was “hello” financial crisis, redux.
The catch was, GM would need up to two years to retool and reconfigure the plant to be able to produce electric vehicles.
That means all of the union employees are going to be laid off.
And that means, the special deal with paying the city about $700,000 a year will be suspended until production returns.
So, once again, city officials have to figure out a way to carry on without this important revenue stream, albeit it only temporarily.
The solution to this challenge has yet to be hammered out.
But a key to this balancing act just might be the ongoing labor negotiations with the city’s firefighters.
Watch this developing story closely, folks.
Jan. 10, 2020

One Response to ‘Story of the Year’ revolved around a key financial source

  1. chris

    February 4, 2020 at 9:55 pm

    With the perspective of time, we can see that GM screwed both Detroit and Hamtramck in the 1980s deal to get the land for the Hamtramck Assembly. They have never come through with the numbers of jobs promised. When do communities begin to hold corporate America’s feet to the proverbial fire???

    This happens all over the country. Some corporation comes to town, demands the moon and dangles X numbers of jobs, but then wants tax breaks, and infrastructure improvements, etc., The corporation then reneges on the jobs. But, we are left holding the bag for the tax breaks and improvements. Many corporations have the gall to come after more tax benefits even before the initial tax abatement has run out…!!! In the Hamtramck GM example the city has had to absorb the loss of actual tax basis from the neighborhood destruction, the actual destruction of a thriving community and the lives lived there.

    So when GM gets the benefit of not forking over payments in lieu of taxes while production is shut down, somehow that’s a cost Hamtramck just has to absorb, oh but it’s only temporary…?!?! That just tastes a little bitter in the mouth. Maybe we should all negotiate for not paying taxes or maybe even the mortgage while we are either un- or under employed?


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