No not that one., this one:
“You look at the South,” Shelby said. “You take — not just Mercedes in my hometown — but BMW, Honda and all of them. These companies are flourishing with American workers made in America.”
But the flourishing of the transplants didn’t come without significant taxpayer help. Shelby’s Alabama, for example, secured construction of a Mercedes-Benz plant in 1993 by offering $253 million in state and local tax breaks, worker training and land improvement. For Honda, the state’s sweetener surrounding a 1999 deal to build a mini-van plant was $158 million in similar perks, adding $90 million in enticements when the company expanded the plant three years later. A 2001 deal with Toyota left the company with $29 million in taxpayer gifts.
Alabama is hardly alone. Corker’s Tennessee recently lured Volkswagen to build a manufacturing plant in Chattanooga, offering the German automaker tax breaks, training and land preparation that could total $577 million. In 2005, the state inspired Nissan to relocate its headquarters from southern California by offering $197 million in incentives, including $20 million in utility savings.
In 1992, South Carolina snagged a BMW plant for $150 million in giveaways. In Mississippi in 2003, Nissan was lured with $363 million. In Georgia, a still-under-construction Kia plant received breaks estimated to be $415 million. The list goes on.
Supporters of these deals contend that the economic activity spurred by the arrival of the automakers is worth the up-front costs. Yet some experts say that, considering the ever-growing size of the incentive packages, there’s little evidence to support that claim.
My question is to what end? Obviously these politicos will gain lots of electoral benefits by bringing business to their states but what does this do for the party nationally? Not much that I can see. The GOP is increasingly becoming a southern party. They torpedoed the auto bailout; seemingly to make a point about unions. They scream about free markets while trying to dictate wages at the Big Three. Where is this thinking taking them? Who are they representing? The Washington Independent story shows that doling out subsidies isn’t necessarily a win-win proposition for these states:
Others wonder if the incentive packages don’t go too far to divert taxpayer dollars from vital state services. When Tennessee courted Nissan in 2005, for example, its $197 million gift came about the same time the state was cutting 170,000 low-income adults from its Medicaid rolls. A 1998 Time magazine report found that an Alabama elementary school adjacent to the Mercedes plant was home to 540 kids in a building designed to hold 290.
“The Mercedes-Benz plant illustrates a fundamental principle of corporate welfare,” the article read. “Everyone else pays for economic incentives — either with higher taxes, fewer services or both.”
So what we have are GOP Senators potentially dealing a serious blow to the economy while trying to make things easier for foreign car companies in their home states. The same companies that already have a competitive advantage over our companies because they don’t have to worry about providing health insurance for their workers here, because they don’t have union employees, or back home, because their gov’ts pick up the tab. USA! USA! USA!
Shout out to Yglesias
Seems I’ve echoed Eugene Robinson on this one:
They have managed to position their party as being against unions, against America’s domestic industrial patrimony, against the blue-collar working class — and also, incredibly, against the Rust Belt states, such as Michigan and Ohio, that are home to UAW-represented auto plants and that also regularly tip the balance of presidential elections.
And for what? The Republican senators who voted to kill the bailout knew full well that the White House was determined to find some way to tide the automakers over. It was as if they couldn’t help themselves. Even lemmings must be shaking their heads in dismay.