Saturday, December 20, 2008

Think Detroit Can't Compete Because the South's Throwing Money at its Competitors? Guess Again.

Bashing Southern states, always a pastime for much of the country and liberals, is once again in vogue as Detroit tries to avoid bankruptcy. A typical scare tactic used by them is the complaint the Big 3 can't compete with foreign competition because the Southern states pay them to build their plants in the South.

The president of the Mississippi AFL-CIO provided a perfect example of this excuse in the Jackson Free Press (a Mississippi free "progressive" weekly) recently “What they do is they come to America and start a bidding war between these southern, right-to-work states, and taxpayers wind up subsidizing their arrival by paying for infrastructure and tax subsidies. Then they get to sell a product for less than their American counterparts."

This statement was disingenuous as it assumed Northern states are NOT themselves giving huge tax breaks to the Big 3. A quick search on Google reveals Northern states haven't exactly sat on their hands when it comes to shoveling out the dollars to Detroit (The governors are in parenthesis, Democrats are highlighted):

Arlington, 1991. Faced with closure, Texas (Anne Richards) and Arlington offered a tax incentive package with abatements and training funds as well as a reworking of worker's comp laws worth $30 million.

Lansing, MI 1999. Michigan (John Engler) gives GM a $98.9 million incentive package to build a new plant. Governor Engler justified the help: "The GM project will provide more than $2.163 billion in revenue to the state over the life of the agreement, resulting in a net positive gain to the state of over $2.090 billion after the MEGA credit. The project is expected to generate over $27 billion in personal income.
"While this package of incentives is large, the benefit to the community and to the state is much larger," Engler said. "For every dollar we invest in this project, we will collect more than $21 dollars in new tax revenue. This is a wonderful return on investment on a project worth fighting for."

Warren, MI 2004. Michigan (Jennifer Granholm) gave GM and Germany's Dr. Schneider Automotive Systems Inc. over $43 million in incentives while the Warren City council also awarded GM nearly $20 million in tax abatements at the same plant. The same story reports Four years ago, Michigan's $256-million state and local incentive package helped persuade GM to announce two new plants just outside Lansing. The two projects, a stamping plant and an assembly plant, involved 2,800 new jobs. Addition Story, scroll down

Lordstown, OH 2008. GM gets $80 million from Ohio (Ted Strickland) for its Cruze production plant.

Yuma County, AZ 2007. Arizona gives GM $500,000 to build a grounds testing facility in that county.

Dayton, OH 2008 Ohio offers GM $56 million to keep a plant open but GM says no thanks.

Jaynesville, WI 2008. Wisconsin (Jim Doyle) gives GM $5.4 million for training costs.

Flint, MI 2008 MI offers GM $122.5 million to expand its plant in Flint.

Michigan 2008 State grants GM more than $130 million in tax credits for future Volt production at several plants.

Ohio 2008 State gives Ford $1.7 million in tax credits for an engine plant.

Detroit, MI 2008 State gives Ford $151 million for several plants.

Ontario, Canada 2008 Canadian government gives Ford $75 million in incentives to reopen plant.

Auburn Hills, MI 2008 State awards Chrysler over $115 million in a tax incentive package for the building of a new plant in partnership with Mitsubishi.

Kenosha, WI, 2007 State announces Chrysler will receive $16.7 million in tax incentives for plant upgrade.

Toledo, OH 1997 Ohio gives Chrysler $280 million in tax incentives for a plant.

The total incentives, credits, and abatements on this list total $1,456,300,000 with nearly $1 billion of it coming from Michigan alone. (This list is incomplete as it was compiled after only spending 20 minutes on Google.).

There is nothing wrong with states creating tax breaks and other favorable economic conditions for such plants if it leads to a stronger economy and increased tax revenue. However, it is more than a little hypocritical for the unions and their lapdogs to blame the South for Detroit's meltdown when the North has been doing the same thing for years. If the union apologists want to blame someone, perhaps they should look in the mirror and start taking responsibility for ridiculous work rules, jobs banks, and a chronic absenteeism rate of ten percent instead of blaming the South.

Note: If I missed any similar aid by states outside of the South, please free free to send examples to mewith supporting articles.


Anonymous said...

Don't expect the JFP to do research like that. They've got an agenda to live up to.

Kingfish said...

Who cares? I'm more concerned with the unfair bashing of the South when the North has been giving Detroit over a billion dollars for some time.

Conservative Belle said...

Excellent post.

Anonymous said...

I think there's some zeros missing in your total tax abatement figure...

Kingfish said...

How so?

Anonymous said...

Great post! Maybe the ridiculous tax policies and union rules have more to do with it

Anonymous said...

Great work!

I think there's some zeros missing in your total tax abatement figure...

He means in the first line of the next-to-last paragraph. The figure is written as "$1,456,300" (1.4 million) but should be over a billion.

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Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

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This is definitely a Beaver production.

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