Incentives - what the media hasn't reported about those southern auto plants

[merh]

The Big Three need to ask for incentives, not a bailout.

Here is what Mississippi did to attract the foreign automobile companies:

Mississippi's incentive package includes $293.9 million for Toyota, much of which will cover costs for infrastructure such as roads and water and sewer lines for the 1,700-acre site at Blue Springs, near Tupelo. The package also has $30 million from the state for top-tier Toyota suppliers and $60 million from local governments for land acquisition and water supplies. Barbour signed the bills Friday afternoon, and they became law immediately.
Barbour and company officials announced Tuesday that Mississippi had been chosen as the site for Toyota's eighth vehicle assembly plant in North America - part of a growing pattern of auto companies choosing sites in the South.

In 2000, when Ronnie Musgrove was governor, Mississippi gave Nissan a $363 million incentive package to lure the state's first auto manufacturing plant. The Nissan plant opened in 2003 near Canton, about 25 miles north of Jackson and nearly 200 miles south of the Toyota site. The Nissan plant employs about 4,000 people and produced 278,000 vehicles last year.

Barbour, a Republican who defeated Democrat Musgrove four years ago, said the Nissan package did not include incentives for suppliers.
The Toyota plant near Tupelo will be part of what Barbour called a "Southern automotive manufacturing zone" that now includes the Nissan plant at Canton; a Hyundai plant at Montgomery, Ala.; a Mercedes plant at Tuscaloosa, Ala.; a Honda plant at Anniston, Ala.; a Nissan plant at Smyrna, Tenn. He said that "box" of plants should help spur development of suppliers.

"We're going to pursue suppliers aggressively," he said. "Because not every place is like Tupelo and the PUL Alliance big enough to have an automotive assembly plant. But every place is big enough to have a supplier that employs 50 or 150 or 500 people."
The bills are Senate Bill 3215, 3212, 3213, 3214.

http://www.dra.gov/media/article_detail.aspx?articleID=851

Some of the Katrina recovery monies were used to build a road for the Toyota plant.

And here is just a snippet about Alabama's incentives.

With the fate of the Big Three hanging in the balance, the chief of the United Auto Workers late last month singled out Alabama for criticism, saying the state has ponied up $700 million in tax breaks and perks for foreign automakers.

Ron Gettelfinger, whose union also is imperiled, complained that Alabama lawmakers are among those opposing a bailout of General Motors Corp., Ford Motor Co. and Chrysler LLC.

Sen. Richard Shelby has become a target for barbs after the Alabama Republican emerged early on as a leading opponent of government aid for the Big Three. In a harshly worded letter, a Detroit computer company CEO denounced Shelby as a hypocrite since Alabama dangled $253 million in incentives to snag Mercedes-Benz in 1993.

http://blog.al.com/businessnews/2008/12/alabama_in_he_middle_of_auto_b.html

This is NOT ABOUT A regions ideology - this is about the lying pieces of shit in office that are trying to use the US auto industries troubles to bust the unions. It is about lies and hypocrisy of a few, not about the region they come from.

[HopeFor2006]

1. It was brought up on MSNBC this morning

by none other than Pat Buchanan.

[elleng]

2. Good to hear that,

but what did he say about it?

[HopeFor2006]

5. He talked about the financial incentives and tax breaks offered to foreign car companies

Made it clear that this hurt American workers and created an unfair playing field.

[merh]

3. Buchanan may be an ass but he knows what the destruction of

the Big 3 could mean to the US.

I'm glad he brought it up, others need to scream it from the roof tops.

[merh]

4. Tennessee - Coker's state & the incentives for the auto industry

Tennessee offered its richest incentive package — and perhaps the most government assistance and tax breaks ever for an American automobile plant — to lure Volkswagen to Chattanooga.

But the state’s chief business recruiter said Wednesday that the benefits from VW’s $1 billion assembly plant far will exceed what could top $500 million in government assistance and tax breaks for the project.

-snip-

Depending upon the final calculations of training assistance, site preparation work and property tax breaks, the total incentive package for VW in Chattanooga is likely to top the previous record high of $419.4 million offered in 2006 to recruit Kia to West Point, Ga.

Sujit CanagaRetna, senior fiscal analyst with the Southern Legislative Conference group and an expert on auto industry incentives in the South, said Tennessee’s incentives could set a new record for an auto plant with its offer of worker training programs, site preparations, highway, rail and utility connections and property and business tax breaks.

http://www.timesfreepress.com/news/2008/jul/24/chattanooga-vw-incentives-largest-state/

[merh]

6. Louisiana needs the big 3 to survive -

General Motors has a large production plant in Shreveport producing three different vehicles; Hummers, Colorados, and Canyons. 1500 workers produce these vehicles, and plant officials were hoping this number would increase to 3000 by the middle of next year. But that's only one aspect of the auto financial impact throughout the state. Shreveport, Baton Rouge and New Orleans all have become relay stations where American cars are stockpiled as they are transported to other parts of United States. Estimates are that as many as 1000 jobs are involved in the state relay operation alone.

Several large trucking companies are involved in moving GM products from Shreveport to dealerships located throughout the United States. Rail networks operating throughout Louisiana also are actively involved in auto transportation. Sen. Bennett Johnston was successful some years back in garnering federal money for a rail spur allowing train traffic to come into the Shreveport GM plant. A number of good paying jobs are involved in the effort of moving vehicles once they come off the assembly line.

There are a variety of other subsidiary manufacturing plants in northwest Louisiana servicing GM. Several stamped metal body companies in Louisiana produce the frames for GM cars and deliver them to the production site in Shreveport. GM officials estimate that besides the 1500 employees operating at their Shreveport site, the ancillary production operations and transportation impact creates an additional 1500 jobs.

And how about the various domestic auto dealerships spread throughout Louisiana? Of a total of 345 dealerships, 221 sell American made cars. That’s 65% of all dealers in the state. And each of these dealers hires, on average, 54 workers totaling approximately 12,000 employees throughout Louisiana. Right now, these dealership owners and employees are deeply concerned.

-snip-

What about bankruptcy? A number of companies in industries like airlines, steel and retailing have shown that, by taking bankruptcy, they can restructure and offer a fresh start to preserve a future for their workers. It would seem like a reasonable alternative for companies like G. M. to submit a prepackaged bankruptcy plan, laying out steps they will enact once it receives Chapter 11 protection. This would buy some time for an orderly shakeout.

But again, there’s a danger for Louisiana auto dealerships and their employees if bankruptcy becomes the alternative. Car dealerships selling American automobiles are independently owned, and have contractual relationships with the Big Three to sell their cars. If the producers go bankrupt, then the contract with the dealer is abrogated and is no longer in effect. Producers like GM will then be at liberty to pick and choose what dealers sell their cars, and what contracts they want to void under the bankruptcy protection. That means a number of Louisiana car dealers could be out of business.

Another big problem with bankruptcy is that car buyers could well see it as a sign that the cars they bought may not retain their value. Who wants to buy a car from a company that is in deep trouble and may completely go under? A recent poll involving over 6000 consumers found that some 80% of them would not purchase a car from a company that files bankruptcy. If someone purchases a ticket on a bankrupt airline, it is a one-shot transaction that is over quickly. A car on the other hand is a major investment where families want the assurance that it will perform for a period of time. Maybe three or four years, because that's all part of the bargain.

But the biggest danger for any company considering bankruptcy is finding liquidity. Where can you locate a lender? With the severe downturn the country is facing today, and banks themselves in line for bailouts, who's going to loan any money to GM and other auto producers if they are trying to reorganize under court protection?

-snip-

http://www.bayoubuzz.com/News/Louisiana/Business/Louisiana_Economy_Needs_Automotive_Industry_Bailout___7946.asp

Vitter's vote against the unions (the big 3) is a vote against the interests of his state.

[QC]

7. Excellent point, and going after these people about their conflicts of interest

and their ugly ideology makes a lot more sense than attacking them for their places of birth, though, admittedly, it doesn't allow the usual suspects here to gratify their hatred of Southerners.

[merh]

8. It makes no sense to attack the entire region.

The media is failing us all again and instead of trying to hold them accountable others choose to blame the south.

It's pitiful.

[QC]

9. For many people here, politics is not about making the world better or anything like that.

It's about getting to preen and posture and bash people they don't like.

It's amazing how many people in these parts seem to think that all there is to being a good progressive/liberal is not liking George W. Bush.

[merh]

10. Sadly, there is much truth to your post.

n/t

[QC]

12. It's the thing that I find most disheartening about the New and Improved DU.

Hard to believe that there was a time here when we spent most of our time discussing issues and exchanging information, isn't it?

[merh]

14. I remember those days, they weren't too long ago

I am afraid it will get worse too. For some, because of all they are used to is attacking GWB and his administration, they don't know what else to do than attack any administration. It is a habit and one they don't know how to break.

Then there are those who have fear of success, they don't know what it is like to trust the admin, to be happy about the government, so they sabotage any hope for success.

Then there are those that attack now so that if and/or when Obama does mess up, they aren't so hurt or disappointed.

And there are those that attack to attack - the art of discourse has taken a back seat to snarks and snipes and slams.

[SoCalDem]

11. Alabama raided the EDUCATION funding...on 2 projects paid over $128K PER JOB created

did those workers of the 3200 jobs created MAKEc $128K a year?? in your dreams!
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4643059

[merh]

15. the republicans are notorious for "creating a great deal"

the problem is, the deal is usually a sham.

We had a vaccuum cleaner manufacturing company come to the coast, they were giving tax credits and incentives - hired hundreds, it looked so good.

Then when the period of time on those tax breaks ran out, they closed the plant - up and left. They took the money and ran.

Thanks for the link, I bookmarked it.

Being informed is necessary to combat the bullshit being spread about.

[Uncle Joe]

13. Kicked and recommended.

Thanks for the thread, merh.

[merh]

16. thanks for the K&R

and for paying attention to the real issues.

the other crap is just crap, sadly those who are content with rolling in it are only smelling up the place.

:hi:

[retread]

17. Mississippi gets $1.77 of Federal money for every $1.00 in Federal tax. Alabama

gets $1.71 for every $1.00, and Kentucky gets $1.45 for every $1.00. Michigan gets $0.85 back for every dollar.

[merh]

18. Michigan needs to hire a PR firm - they need to go on the road

with the facts - do Oprah and Rush and O'Liely - put the true numbers out there