General Motors to announce $6.5bn spending and 4,000 new jobs at Michigan EV factories

US carmaker General Motors is poised to announce major electric vehicle investments in Michigan next week, with plans to spend $6.5 billion and create up to 4,000 new jobs at two plants.

The state's economic development board is expected to approve an incentives package on Tuesday, according to a meeting agenda posted online.

The Associated Press previously reported the Detroit automaker's plan to partner in a joint venture to build a $2.5bn EV battery factory in the Lansing area, adding as many as 1,700 workers. GM also plans to spend $4 billion and create up to 2,300 new jobs by designating an existing plant in Orion Township as its third electric-vehicle factory, along with plants in Detroit-Hamtramck and Spring Hill, Tennessee.

The selections are a big win for Michigan, which missed out on three Ford Motor battery factories and a Ford electric-vehicle assembly plant that will be built in Kentucky and Tennessee.

Michigan state lawmakers and Governor Gretchen Whitmer recently enacted a new $1bn fund designed to land major business projects.

“The Ford announcement felt like a punch in the nose," Quentin Messer Jr, chief executive of Michigan Economic Development and president and chair of the Michigan Strategic Fund, said last month. “Michiganders have always responded to every punch with a more forceful counterpunch.”

The Orion Township plant, about 64 kilometres north of Detroit, now makes the Chevrolet Bolt electric hatchback and small SUV, employing just over 1,100 workers. The company said it would soon announce that an existing factory would build electric pickup trucks. Bolt production has been suspended due to a battery recall.

The battery plant will be constructed on the site of GM’s Lansing Delta Township Assembly factory, which makes the Buick Enclave and Chevrolet Traverse SUVs.

“GM appreciates the support it has received from the Governor, the State Legislature, Orion Township, the City of Lansing and Delta Township related to two prospective projects that GM is considering in Orion Township and Lansing," company spokesperson Dan Flores said in a written statement. "Until these projects receive final approval, we have no comment on potential announcement timing,”

GM says it is also spending $154 million to revamp an ageing factory near Buffalo, New York, so it can make a key part for electric vehicle motors.

EVs amounted to less than 3 per cent of US new auto sales last year, but forecasters expect big increases in the next decade. Consumers bought about 400,000 fully electric vehicles.

The LMC Automotive consulting firm estimates EV sales will jump to 763,000 this year and more than 1.2 million by 2023. The firm expects EVs to make up nearly 44 per cent of new vehicle sales by 2033, with nearly 7.4 million sold.

Short-term let permits explained

Homeowners and tenants are allowed to list their properties for rental by registering through the Dubai Tourism website to obtain a permit.

Tenants also require a letter of no objection from their landlord before being allowed to list the property.

There is a cost of Dh1,590 before starting the process, with an additional licence fee of Dh300 per bedroom being rented in your home for the duration of the rental, which ranges from three months to a year.

Anyone hoping to list a property for rental must also provide a copy of their title deeds and Ejari, as well as their Emirates ID.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

General Motors to announce $6.5bn spending and 4,000 new jobs at Michigan EV factories

State lawmakers and Governor Gretchen Whitmer recently enacted a new $1bn fund designed to land major business projects

Short-term let permits explained

COMPANY%20PROFILE%20