Whirlpool Corp. project in Benton Harbor gets boost with approval of Michigan tax incentives

Whirlpool project receives Michigan tax incentives

LANSING, Mich. — Whirlpool Corp. received a state tax incentive Tuesday for consolidation of its headquarters in southwestern Michigan, a move that will bring much-needed investment to Benton Harbor.

The $86.8 million project is expected to help the appliance company retain nearly 870 jobs while transforming a Benton Harbor site that now includes an abandoned car dealership and shuttered stores. It’s welcome news in a city of 10,800 that has long been considered one of Michigan’s most economically distressed areas. The city has lost roughly 15 percent of its population since 1990 and has been run with the help of a state-appointed emergency financial manager since April.

“We have a commitment to Michigan,” Whirlpool corporate vice president Jeff Noel said at a Lansing news conference shortly before the tax credits were approved. “Michigan has a commitment to us. And we think it’s the right decision, long-term.”

Michigan officials had said Benton Harbor was competing with areas in Illinois and Georgia for the Whirlpool investment.

Whirlpool announced plans last week to consolidate operations from several owned and leased facilities at three spots in and near Benton Harbor. The investments include a new building near the city’s riverfront.

The Michigan Economic Growth Authority board on Tuesday approved a tax credit worth more than $19 million over five years for Whirlpool. Local governments also are considering incentives packages for the project.

Michigan’s tax incentive policies have been criticized by some Republicans running for governor. They say the state has been too focused on picking winners and losers under Democratic Gov. Jennifer Granholm’s administration.

Granholm defended the state’s tax incentives policies Tuesday while announcing grants for Whirlpool and several other companies. The state is hungry for new investment because its unemployment rate, 13.2 percent in June, has been among the highest in the nation for the past several years.

“Those who say we should not be going after these companies with tax incentives would have us unilaterally disarm,” said Granholm, who can’t run for re-election because of Michigan’s term limits law. “These companies would not be choosing Michigan if we didn’t have the economic tools to make a good business case for them. Every state is competing.”

Also Tuesday, Whirlpool said its second-quarter net income more than doubled as it cut costs and benefited from shoppers taking advantage of federal rebates to buy appliances. But worries about whether it can keep it up gave investors jitters.

Whirlpool cautioned that its momentum will likely slow in the coming months as the benefit from U.S. subsidies erodes. That drove shares down 2.9 percent to $88.70 in Tuesday trading.

Associated Press retail writer Ashley M. Heher contributed to this report from Chicago.