Ypsilanti v. General Motors Case Brief Summary | Law Case Explained

Ypsilanti v. General Motors | 506 N.W.2d 556 (Mich. Ct. App. 1993)

Cities often give tax breaks to businesses they hope to attract, reasoning that the businesses will provide jobs and improve the local economy. In Ypsilanti versus General Motors, a town that had sweetened the pot for years cried foul when a car manufacturer decided to pull up stakes and relocate.

General Motors operated two car manufacturing plants in Ypsilanti, Michigan, employing thousands of workers. State law authorized municipalities to create industrial development districts and grant tax exemptions to businesses to create and maintain jobs in the state. Accordingly, Ypsilanti had created industrial development districts for both these plants and granted G M numerous tax abatements over the years.

In the eighties, it granted the Willow Run plant two sizable abatements for G M’s multi-million-dollar investment in the new Chevrolet Caprice. The Willow Run plant manager stated that the tax abatement would allow the plant to continue production and maintain employment for its employees.

In nineteen ninety-one, citing lower-than-expected sales of the Caprice, G M announced that it would be moving the work done at Willow Run to Arlington, Texas.

Ypsilanti sued General Motors, alleging breach of contract based on the tax-abatement statute and promissory estoppel. The trial court found that the abatement statute hadn’t created a contract between the township and the corporation. It did, however, find that G M was bound by promissory estoppel to produce the Caprice in Ypsilanti. It issued an injunction ordering G M not to transfer production of the Caprice from Willow Run to any other facility. G M appealed to the Michigan Court of Appeals.

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