Clearcover, an automotive insurance provider based in Chicago, has fallen short of an employment growth target linked to an incentive package it received from Detroit in 2020. The $4.65 million stimulus was contingent on Clearcover establishing a downtown Detroit office and creating over 300 jobs, which did not occur within the agreed-upon timeframe.
Four years after receiving the award, Clearcover has not yet met its employment target, sparking conversations about the possible reclamation of funds. This situation has prompted a substantial shift in the company’s operation plans, with a major lean towards a remote work model.
The Detroit Economic Growth Corp (DEGC) has announced that none of the $750,000 merit-based grant intended for Clearcover has been disbursed, due to the company’s non-compliance with the set conditions. These conditions stipulated that Clearcover lease a downtown office and employ a minimum workforce of 100, at least 40 of whom should be Detroit residents, by the end of 2023.
Clearcover’s failure to meet its employment obligations has prompted a legal response from the Michigan Strategic Fund, which is now seeking return of the previously allocated $500,000 from a $3.5 million state award.
Clearcover’s missed Detroit employment targets
This reaction is spurred by Clearcover’s unmet promise to create 303 jobs over three years, resulting in not just financial losses for the state, but also strained relations with the Michigan Strategic Fund.
Clearcover has reportedly reduced its workforce by nearly 30%, in response to challenges faced by its CEO in sustaining business operations amidst economic turmoil. Despite these obstacles, staff members have demonstrated resilience, offering exemplary customer service. The CEO expressed recognition of their efforts during a town hall meeting, while also revealing plans for future growth once the economy stabilizes.
Finally, the Michigan Strategic Fund has granted a $400,000 merit-based award to Clearcover through the Jobs Ready Michigan Program. The grant aims to support the hiring and training of new employees. However, it seems this grant remains undispensed to date.
