Gov. Whitmer calls for action on roads, preserving Michigan's auto industry

DETROIT — Gov. Gretchen Whitmer sounded the alarm during a Wednesday speech, saying Michigan is facing a "major funding cliff" for road improvements and its auto industry is seeing new threats from other states and companies subsidized by the Chinese government.

Whitmer, a second-term Democrat, delivered her remarks at the Detroit Auto Show inside the Huntington Place convention center, where she laid out her policy agenda for the 2025-26 legislative term.

"Right now, the future of the entire auto industry is at stake," Whitmer said at one point Wednesday. "The very core of Michigan’s economy is on the line."

Whitmer, who has two more years remaining in her final term as governor, noted that a state program that shifts $500 million in corporate income tax revenue to economic development efforts would end later this year.

Likewise, Whitmer warned that the $3.5 billion her administration borrowed five years ago to fund highway reconstruction projects across the state will also soon run out, exacerbating the state's longstanding annual shortfall in road funding.

"Losing both without better, more comprehensive replacements will throw us off track," Whitmer said. "It’ll harm both our state and national economy."

Amid the challenges, Whitmer will have to begin working with a state House that is controlled by a new set of Republican leaders and with a Republican in the White House, Donald Trump, who is scheduled to take office Monday.

Whitmer said she's looking forward to working with both new state House Speaker Matt Hall, R-Richland Township, and Trump, with whom she's clashed in the past.

"Michiganders elected both me and Donald Trump twice, just two years apart," the Democratic governor said. "We all swore an oath to the people we serve. And the people expect us to find common ground."

For road and bridge funding, Whitmer told reporters she's seeking a "compromise" with state lawmakers.

“We’re going to have to probably make some cuts," the governor said. "We’re probably going to have to find some revenue that makes some sense for us.”

Hall, when he was House minority leader, proposed in November a plan to dedicate about $2.7 billion within current state revenues to infrastructure improvements in a bid to get the Legislature to negotiate during the lame duck session. Democrats said they were open to negotiation but also were concerned his idea would create financial problems for K-12 schools.

"Speaker Hall has been consistent in his commitment to providing value for taxpayer dollars by fixing our roads responsibly," Hall's spokesman Greg Manz said Wednesday. "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."

'New, better tools'

On economic development, Whitmer said the needs to replace the existing program with "new, better tools."

She called for a fund "to help us close deals and move faster as we compete with other states and nations to land big factories and engineering and tech centers" and for an initiative that would allow certain businesses to capture a portion of new employees’ income tax that would usually be withheld and surrendered to the state.

Whitmer said she also wants a program to prepare sites for development, similar to a strategy that state has been using through its Strategic Outreach and Attraction Reserve (SOAR) Fund, and to invest in housing.

If Michigan doesn't act, Whitmer said it risks a future similar to what's playing out in Europe, where "Chinese electric cars and batteries are gobbling up market share."

"European automakers are falling behind," she said. "More than 12 million European direct and indirect auto industry jobs are at risk."

Whitmer also said Michigan is "still the No. 1 auto state," but "others have gained ground especially in the south."

"These other states are using every tool at their disposal," the governor said. "Some are just writing blank checks to companies. That’s bad policy.

"We can do this in a more thoughtful, more strategic way that’s accountable to taxpayers. But the truth is, today, we lack the speed and flexibility to win. And the tools we do have are going away."After the speech, Quentin Messer, CEO of the Michigan Economic Development Corp., said there are ways to make it easier for Michigan to compete.

"I am still very optimistic," Messer said. "Michigan is going to win."

'Solution' for roads?

On roads, the Whitmer administration's past round of $3.5 billion in bonds issued in early 2020 for construction projects is ending. It will ultimately cost state taxpayers $6 billion with interest payments over 25 years, the Michigan Department of Transportation has said.

"We need a sustainable, long-term solution so we can fix the damn roads using the right mix and materials," Whitmer said Wednesday

She didn't lay out a specific plan for that solution on Wednesday but said she wanted to work with her partners in the Legislature, where Republicans control the House and Democrats have a majority in the Senate.

Lawmakers would need to look "for new, fair sources of revenue" and implement "fiscally responsible cuts" to free up existing dollars, she said.

Senate Minority Leader Aric Nesbitt, R-Porter Township, posted on social media Wednesday that Whitmer was calling for "a tax increase to fix the roads."

"Taxpayers gave her more than enough money to get the job done," Nesbitt said. "If she had spent it properly our roads would be fixed."

Nesbitt announced Tuesday that he'll run for governor in 2026. Whitmer can't seek reelection because of term limits.

Bradley Wieferich, director of the Michigan Department of Transportation, said the state needs to find about $3.9 billion more annually for roads, citing a number used in a report from the Growing Michigan Together Council in December 2023.

"It is a lot of money," Wieferich said. "But really is an investment at the end of the day. It's an investment in our transportation system that we know people need, that communities need."

On tariffs

As Trump floated the idea of imposing 25% tariffs on Canadian imports before his inauguration, Whitmer reacted Wednesday by arguing that tariffs shouldn't be used to "punish our closest trading partners."

The comments were Whitmer's strongest remarks since the November election about a tariff strategy that was a centerpiece of Trump's winning campaign against Democratic Vice President Kamala Harris.

Trump has said he wants to use tariffs to penalize companies that make their products elsewhere and boost the economy and the federal government's budget.

"There’s been a lot of talk about tariffs," Whitmer said. "I’m not opposed to tariffs outright, but we can’t treat them like a one size fits all solution."

Every time a Michigan auto part cross the border and gets slapped with a tariff, costs will be passed on to consumers, the governor said.

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

U.S. Rep. John Moolenaar, a Republican from Caledonia who chairs a House committee focused on economic and national security issues concerning China, said Whitmer's concerns about China are "hypocritical" because her administration has approved taxpayer support for two Chinese-linked manufacturing plants in Michigan.

Ford Motor Co. plans to license battery technology from China-based Contemporary Amperex Technology Co. Ltd., or CATL, to assemble electric vehicle batteries at a Ford-owned plant under construction near Marshall. Gotion Inc., a U.S. subsidiary of a Chinese battery maker, plans to construct a battery components plant on the outskirts of Big Rapids. Both projects have been controversial.

"The fact is she has given hundreds of millions of taxpayer dollars to Chinese auto suppliers," Moolenaar wrote on X. "... If @GovWhitmer is serious about stopping the (Chinese Communist Party) from taking over our auto industry, she will end the subsidies she approved. Until then, her words are empty."

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