Governor John Engler announced today that the promise of a Michigan Economic Development Corporation (MEDC) incentive package has convinced The Dow Chemical Company to expand in Midland. The MEDC helped win the project by making a competitive business case for the company to expand in Michigan with a Single Business Tax credit and an abatement of the State Education Tax.
Dow has selected Midland for the company's administrative offices expansion once the Union Carbide merger is approved. It is estimated that this expansion will create 479 new jobs, 350 by the company, for Michigan workers.
"Once again, Michigan has proven it can retain and nurture a Fortune 100 company like Dow," said Governor Engler. "Dow's decision to locate its administrative office in Midland clearly demonstrates how Michigan has established itself as a rising high-tech presence."
Once the regulatory approval has been received, this new facility will consolidate various administrative functions from across the U.S. to Midland. Dow plans to spend more than $40 million on the project, including relocation, building, and equipment costs.
The new jobs are related to and contingent upon Dow's pending merger with Union Carbide Corporation. The merger is currently undergoing regulatory review with the U.S. Federal Trade Commission, but Dow hopes to receive regulatory approval soon.
"When we announced the merger in August 1999, we also announced that the combined companies would be headquartered in Midland," said Randy Croyle, director of Dow's Merger Program Management Office. The new jobs in Midland are salaried administrative and management jobs in areas such as Executive Management, Finance, Human Resources, Information Systems, Legal, Public Affairs, Purchasing, and Environmental Health and Safety.
Of the new jobs, 129 spin-off jobs will be created from increased spending by people who receive income from the jobs at Dow, according to an economic analysis completed by the University of Michigan.
A key feature of the MEDC incentives package is a Michigan Economic Growth Authority (MEGA) tax credit, approved today by the MEGA board, worth an estimated $24.2 million over 20 years. The MEGA program, which is administered by the MEDC, is used to promote high quality economic growth, job creation and retention in Michigan.
In addition, the incentives package includes an abatement of the six-mill State Education Tax for 12 years with a value estimated at $138,000.
This project will provide over $48.4 million in revenue to the state over the life of the agreement, resulting in a net positive gain for the state of over $24.2 million, after the MEGA credit. The project is expected to generate over $605 million in personal income during that time.
"Around the world, mergers and acquisitions are changing the face of our business environment. When global companies like Dow make critical business decisions as to the location of their headquarters, it is important for our state and country to be able to compete with communities around the world," said Jenee L. Velasquez, executive director of the Midland Economic Development Council. "For more than 100 years, Dow has been the major employer in Midland. We're pleased that the Michigan Economic Development Corporation was able to partner with our community to enable us to retain the global headquarters of the state's fourth largest employer and attract new jobs and investment to Michigan."
Dow is a leading science and technology company that provides innovative chemical, plastic and agricultural products and services to many essential consumer markets. The company operates Michigan facilities in Midland, Southfield, Auburn Hills, Hillsdale, Harbor Beach and Ludington. With annual sales of $22 billion, Dow serves customers in 162 countries and a wide range of markets that are vital to human progress, including food, transportation, health and medicine, personal and home care, and building and construction, among others. Committed to the principles of sustainable development, Dow and its 41,000 employees seek to balance economic, environmental and social responsibilities.
The Michigan Economic Development Corporation, a partnership between the state and local communities, promotes smart economic growth by developing strategies and providing services to create and retain good jobs and a high quality of life. For more information on the Michigan Economic Development Corporation's initiatives and programs, visit the website at www.michigan.org.
|TOTAL JOBS CREATED||479|
|NET POSITIVE STATE REVENUE IMPACT||$24,204,000|
|Personal Income Generated Over Life of MEGA Agreement||$605,760,000|