Senator Shelby, and the other southern senators who refuse to vote for auto bailout money, have big non-union foreign car factories in their states. The southern senators are backing foreign carmakers that have non-union factories in their states. They are willing to risk the safety of the whole country in order to bring down the UAW, and realize who-knows-what other benefits from those companies. There are 17 more non-union foreign car factories in the planning stage to be built in southern states.
It’s hard to believe that lawmakers, who are pledged to do their best for their constituents and the nation, would actually let the American car manufacturers go out of business. And it looks as if they are doing it not only to bring down the car union but also to line their own pockets. Their positions indicate they don’t appreciate, or don’t care about, the danger to the country as a whole.
“I cannot think of a more exciting day, even more so than Election Night, for me,” Bob Corker, the Republican senator from Tennessee , said in a conference call that day. The reason for his elation was the announcement that Volkswagen, lured by up to $500 million worth of incentives from the state government, had agreed to build a $1 billion plant near Chattanooga, Tenn. That is, not just in his home state, but in the suburbs of the city he once served as mayor.
Add VW to Nissan, which already has two plants and its North American headquarters in Tennessee, and you begin to see why Corker was so aggressive this month about trying to block — or at least dramatically rewrite — a proposal to float billions of dollars in emergency loans to domestic automakers. Most of the focus during this debate has been on lawmakers who represent Michigan, the home of the Big Three — Ford, General Motors and Chrysler. But Corker represents the other side of the coin: Tennessee and other Southern states have recently come to depend on foreign automakers and their non-union factories. If you’re from those parts, what’s good for American car companies may no longer be what’s good for the country — because your economy now depends on their foreign competitors instead.
A summary released by Good Jobs First of state and local subsidies given to foreign-owned auto assembly plants totaled $3.6 billion. “As elected officials debate aid for the Big 3, taxpayers have the right to know the full extent of government involvement in America’s auto industry,” said Greg LeRoy, GJF’s executive director. “And while proposed federal aid to the Big 3 would take the form of a loan, the vast majority of subsidies to foreign auto plants were taxpayer gifts such as property and sales tax exemptions, income tax credits, infrastructure aid, land discounts, and training grants,” he said. Here’s the summary-
Honda, Marysville OH, 1980, $27 million*
Nissan, Smyrna, TN, 1980, $233 million**
Toyota, Georgetown, KY, 1985, $147 million
Honda, Anna, OH, 1985, $27 million*
Subaru, Lafayette, IN, 1986, $94 million
Honda, East Liberty, OH, 1987, $27 million*
BMW, Spartanburg, SC, 1992, $150 million
Mercedes-Benz, Vance, AL, 1993, $258 million
Toyota, Princeton, IN, 1995, $30 million
Nissan, Decherd, TN, 1995, $200 million**
Toyota, Buffalo, WV, 1996, more than $15 million
Honda, Lincoln, AL, 1999, $248 million
Nissan, Canton, MS, 2000, $295 million
Toyota, Huntsville, AL, 2001, $30 million
Hyundai, Montgomery, AL, 2002, $252 million
Toyota, San Antonio, TX, 2003, $133 million
Kia, West Point, GA, 2006, $400 million
Honda, Greensburg, IN, 2006, $141 million
Toyota, Blue Springs, MS, 2007, $300 million
Volkswagen, Chattanooga, TN, 2008, $577 million
Total: more than $3.58 billion
* total of direct subsidies to all Honda facilities in Ohio
** includes about $200 million for expansions of Smyrna and Decherd plants
List does not include joint ventures with U.S. companies
These data, drawn primarily from contemporary media accounts, are very conservative. They do not account for inflation; some would be worth far more in today’s dollars. They do not include any estimate of subsidies granted to hundreds of foreign-owned auto supply companies that have located in the same areas, virtually all of which were also heavily subsidized. Finally, they do not reflect later news accounts, which often place higher subsidy values.
Good Jobs First is a non-profit, non-partisan research center promoting best practices in economic development and smart growth, based in Washington, DC, with offices in New York and Chicago.
SOURCE Good Jobs First
Copyright (C) 2008 PR Newswire. All rights reserved
The fiercest opposition to the loan proposal — and nearly a third of the 35 votes against ending debate on the deal — came from Southern Republicans, and the ringleaders of the opposition all come from states with a major foreign auto presence. Not coincidentally, nearly all of those states — except Kentucky — are also “right-to-work” states, which means no union contracts for most of the employees at the foreign plants. The Detroit bailout fell victim to a nasty confluence of home-state economic interests and anti-union sentiment among Republicans.
So the Southern Republicans had a chance to go to bat for foreign automakers while simultaneously busting a union. At a hearing last week, Corker explained that his constituents “have a tough time thinking about us loaning money to companies that are paying way, way above industry standard to workers- which may explain why his proposed alternative to the loan agreement between Congress and the White House would have required the United Auto Workers to agree to significant wage cuts next year, based on a spurious claim that union workers earn significantly more than non-union.
Even George W. Bush’s White House didn’t push to crush the UAW the way Corker and his buddies did, say Democrats involved in the negotiations with the administration. “It was all about the unions,” one senior Democratic aide said. “This is political payback for lots of things, and probably even more to come.” Labor officials expect Republicans to keep taking shots at unions whenever they can. “This cynical stance they took last night — they’re willing to jeopardize 3 million jobs so they could gain some advantage in their war against unions — is appalling,” said Bill Samuel, the chief lobbyist for the AFL-CIO.
As the Republican Party consolidates in the South, the fight this week could turn out to be a preview of many battles to come over Barack Obama’s economic plans. If those plans involve the domestic auto industry, the GOP pushback will come from somewhere down I-65, the new auto corridor that runs from Kentucky south to Alabama. Expect to hear more not just from the very vocal Bob Corker, but from the rest of a core group of Southern senators whose bread is buttered by the Japanese, Germans and Koreans. Here’s a guide to the major players.
Treasury Secretary Paulson and President Bush may be the only hope left to ward off disaster. The economy of the country is teetering on the edge of disaster unless American carmakers are saved. Bush has been wrong many times during his administration. Let’s hope he gets this one right and decides to allow the diversion of some TARP money. That is the $700 billion already advanced to save the failing financial businesses. We are told that at least $15 billion has to be advanced to the Big Three to keep them in business until Barack Obama’s new administration can take further action to keep the American automotive industry alive.