BorgWarner’s Akasol Announces Plant Closures in Michigan

News Summary

BorgWarner’s subsidiary, Akasol Inc., is set to close two plants in Michigan, leading to substantial job losses for local workers. The closures, impacting 188 employees, coincide with a controversial history of government grants that promised job creation. This shift aims to move production to South Carolina, raising concerns about the future of Michigan’s automotive sector amidst the increasing focus on electric vehicles.

Sad News for Michigan Workers as BorgWarner’s Akasol Announces Plant Closures

In the latest round of economic shifts affecting the local workforce, Michigan is bracing itself for major job losses as BorgWarner’s subsidiary, Akasol Inc., prepares to shutter two plants in Hazel Park and Warren. This news comes as a shock to many, especially considering the long-term impact on the community and the 188 workers who will soon find themselves without jobs.

Details of the Closures

The layoffs, which are scheduled to occur between April 14 and July, will affect the employees at both facilities engaged in testing and producing critical components for electric vehicles, such as battery modules, fast charging equipment, and even technologies for microgrid operations. With the automotive industry increasingly leaning towards electric solutions, the timing of these closures raises eyebrows.

Promises Made, Promises Broken

Back in 2019, the Michigan Strategic Fund made a substantial investment in Akasol, awarding the company a grant of $2.24 million with the expectation that it would create 224 jobs at the Hazel Park facility. Unfortunately, after a modification of the grant in 2022, this amount was reduced to $900,000, and the company only managed to create 66 jobs, falling dramatically short of the original promise. This raises questions about the effectiveness of such government incentives and whether taxpayers are seeing a worthwhile return on their investment.

Shift to South Carolina

As part of the restructuring, BorgWarner revealed that the production of batteries will be moved from Michigan to an established plant in Seneca, South Carolina. A company representative has expressed optimism regarding the eMobility sector, believing in a positive future for their battery products, despite the unfortunate closures in Michigan.

Accountability Issues in Government Grants

The struggle between promised job growth and actual outcomes has a troubling history in Michigan. In fact, a study by the Mackinac Center for Public Policy indicated that only 1 in 11 jobs promised by government grants over the past twenty years have been created. This puts the Michigan Economic Development Corporation (MEDC) under scrutiny, with critics arguing that there’s little accountability for companies receiving these subsidies.

Political Perspectives

Concerns about how taxpayer money is being utilized have been voiced by various economic watchdogs. Lawmakers approved a staggering $4.6 billion in subsidies for selected private companies in 2023 alone, with some individuals calling this a cycle of ineffective job creation incentives.

A Notification Under the WARN Act

According to the Worker Adjustment and Retraining Notification (WARN) Act, Akasol has formally filed notice with the state of Michigan regarding the impending closures and associated job cuts. They have also reached out to local mayors to keep them informed, clearly indicating the seriousness of the situation.

The Impact on the Local Community

As these layoffs loom on the horizon, the community is left grappling with the implications—fewer jobs mean less income for families and potentially less spending in local businesses. The ripple effect of these closures could be significantly felt across Hazel Park and Warren.

A Broader View of the Automotive Landscape

BorgWarner, headquartered in Auburn Hills since 2005, has long been a significant player in supplying technologies to almost all major automotive manufacturers worldwide. However, as the company transitions towards focusing on battery production in South Carolina, questions arise about the future of Michigan’s role in the evolving automotive landscape, particularly as it relates to electric vehicles.

In the face of these changes, the community’s hopes and resilience will undoubtedly be tested. As we look to the future, the emphasis on job creation and the accountability of those responsible for fostering local economies becomes even more crucial.

Deeper Dive: News & Info About This Topic

• Michigan Capitol Confidential
• Wikipedia: Electric Vehicle
• Detroit Free Press
• Google Search: BorgWarner Akasol closures
• Associated Press
• Google Scholar: Michigan Economic Development Corporation
• MLive
• Encyclopedia Britannica: Job Creation Incentives
• WWMT
• Google News: BorgWarner job losses