‘Michigan's economy is on the line,’ Gretchen Whitmer warns at Detroit Auto Show

• At Detroit Auto Show, Gov. Gretchen Whitmer called for bipartisan support of business incentives and long-term road funding
• GOP-majority House open to road funding, wary of incentive deals benefiting big business
• Whitmer warns President-elect Donald Trump’s proposed tariffs could hurt Michigan automakers

DETROIT — Michigan Gov. Gretchen Whitmer on Wednesday renewed her calls for more investments in roads and economic development, promising to work with incoming President Donald Trump and new Republican state House leaders in the year ahead. 

“This is a serious moment,” Whitmer said in a speech at the Detroit Auto Show, which her office billed as a major address to lay out the “road ahead” for Michigan before Trump takes office later this month. 

“The very core of Michigan's economy is on the line,” she said, referencing the state’s still-dominant auto industry, which is undergoing a shift toward electric vehicles but is expecting major policy changes under Trump, including potential tariffs on imported parts.

“For America to win, we must all recognize that all of us are on the same team.” 

Whitmer struck a bipartisan tone as she spelled out her top priorities for 2025: building off of existing corporate incentive programs designed to lure big businesses to Michigan, coming up with a long-term road funding solution and collaborating with world leaders on potential Trump tariffs to protect Michigan’s auto industry from backlash.

With funding for the state’s controversial Strategic Outreach and Attraction Reserve (SOAR) fund set to end this year, Whitmer proposed replacing the incentive program with “new, better tools” to help the state attract large factories and technology hubs. 

She also reiterated support of a payroll tax cut and a “more streamlined” program for scoping out and readying potential project sites, as well as additional investments in housing and public transit. 

Failing to adopt new economic development measures could put Michigan’s auto industry at risk, she warned, citing European automakers’ struggles as Chinese EVs and batteries encroach on their market share. 

“If we do not act, that could be our future,” she said. “I know securing these big factories hasn’t always been easy, but we gotta keep working on it. We can’t just unilaterally disarm, like some on the far left and far right would have us do.” 

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Her continued push for economic incentives could be an uphill battle with legislative Republicans, many of whom supported creation of the SOAR fund in 2021 but later criticized many of the state’s subsequent awards. 

Speaking with reporters last week in Lansing, the new House Speaker, Richland Township Republican Matt Hall, said he wanted to put a projected state budget surplus into roads — "not economic development."

That will make it “much easier” to get a road funding deal done without raising taxes,” he said of new revenue projections showing the state is expected to bring in $1.7 billion in extra tax revenue this year and next.

In one of his first acts since Republicans took control of the state house this year, Hall created a dedicated Oversight subcommittee to examine state incentives awarded under Whitmer and approved by what had been a fully Democratic-led Legislature.

"I want members who are constantly thinking about these economic development deals and looking at, what is the return on investment? Are the companies doing what they're saying they're going to do. If they're not, is the MEDC doing clawbacks?"

Hall said he was "tricked" into supporting incentive awards in the past, but subsequent reporting suggests "they're all terrible, and they're not worth the investment," he said. "That's why we're creating a subcommittee just dedicated to getting those answers."

Bridge Michigan has reported extensively on the major state incentives. Among the prior findings:

• As of June 2024, Michigan had spent $1 billion on corporate incentives and pledged hundreds of millions more for major EV and battery projects that had so far created about 200 jobs.
• Michigan spent $335 million on job-growth subsidies in 2023, with 40% of the promised jobs paying less than $22 per hour. About 60% of the jobs didn't pay middle class wages.

Another try on roads

Whitmer said Wednesday that she “won't go looking for fights, but I won't back down from them, either.” 

She indicated that she’s prepared to try again on a long-term road funding plan, which was a key plank of her winning 2018 gubernatorial campaign. The governor in 2020 adopted a $3.5 billion road bonding plan after the Legislature dismissed her initial proposal for a major gas tax hike, but money from those bond sales is running out. 

Brokering a roads deal will require Democrats and Republicans alike to “recognize some hard truths,” she said, arguing a workable long-term plan will likely mean a mix of new revenue sources and “fiscally responsible cuts” to other areas of the state budget. 

Late last year, Hall proposed dedicating existing corporate income tax revenue to roads, including $500 million a year that Whitmer and fellow Democrats had been setting aside for economic development deals.

"Back in November of 2024, he made it very clear that Michigan deserves a solution that prioritizes local and county infrastructure without taking more hard-earned dollars from taxpayers," Hall spokesperson Greg Manz said Wednesday in a statement responding to Whitmer's speech.

“That’s the plan he put forward then — and it’s the plan that remains on the table now. We’re hopeful the Governor will finally see that a pothole-free path doesn’t require further burdens on hardworking Michigan families.”

Whitmer is expected to elaborate further on her policy priorities in the coming weeks at the annual State of the State address in Lansing. 

The administration is also expected to announce its budget plans next month, building off a projected surplus in state tax revenue. 

A warning on Trump tariffs

As he prepares to return to office, Trump has promised aggressive tariffs on imported goods, including cars and trucks, in an attempt to encourage domestic production. 

But Whitmer, in her speech, warned that could hurt automakers and other industries in Michigan that rely on trade with Canada – the state’s neighbor to the north. 

The Detroit-Windsor border crossing is the most active in North America, driving more than a quarter of the annual $700 billion in trade between the US and Canada, she said. 

While Whitmer said she is not opposed to tariffs outright, she wants to make sure they aren't used to "punish our closest trading partners."

“Every time a Michigan auto part crosses over the border and gets taxed, those costs will be passed on to you at the dealership," she said. 

"The only winner in this equation is China,” the governor continued. “They would love nothing more than to watch us cripple America’s auto ecosystem all by ourselves. This is a matter of national security."

Whitmer said her office has been in "active discussions" with Ontario Premier Doug Ford's team about "ways we can collaborate on tariffs, lower the cost of doing business, and protect Michigan industry and consumers."