Shelby: If the Big Three had only managed their business operations as well as the foreign companies

[NNN0LHI]

http://network.nationalpost.com/np/blogs/posted/archive/2008/12/16/more-on-those-taxpayer-friendly-foreign-automakers.aspx

More on those taxpayer-friendly foreign automakers

Posted: December 16, 2008, 12:07 PM by Shane Dingman

<snip>On Friday, the day following the Senate vote, Shelby told CNBC that if the Big Three had only managed their business operations as well as the foreign companies, known as transplants, they wouldn’t be scrambling now for a taxpayer-funded bailout.

“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.

[Sherman A1]

1. All depends on whose Ox is being gored.

If the situation was reversed, our Esteemed Southern Senators would be screeching at the top of their lungs (oh, wait they are screeching.....)

It's the theory of "Your Side of the Boat is Sinking".

[Hannah Bell]

2. I've read that the Japanese makers don't make much profit on manufacturing in Japan;

instead, they get higher profit per unit offshore, including in the US.

Does anyone know why this would be the case?

[safeinOhio]

3. The cost of a car

8 to 10 percent is labor and total transportation is over 30 percent. Sure Asian labor is less, but why are BMW and other European companies locating here? Unions in Germany make the UAW look tame.

[BeFree]

6. Ok

First, shipping a car across the Pacific meanwhile keeping it clean, free of dents, etc. to LA then having it sit on a parking lot there then loaded onto a trailer to be sent to Hoover, Ariz, to the McCain family dealership outside of Scot-Free where it sits for another month, is pretty expensive.

Two, the factories in Japan are turning out cars for their Asian markets and would have to build new plants to increase production. Cheaper to build the plants in America, and the labor here is cheaper too!

[NNN0LHI]

7. Don't they still have to ship all the parts to assemble them over here though?

I don't think they have any stamping plants or engine plants over here. Just assembly plants.

Don

[Joanne98]

4. The cotton growers in Alabama are subsidized 78% of their profits

Their NOT COMPETITIVE with foreign cotton growers. Let's cut them off next year and see how Shelby likes that.

[City Lights]

5. Sounds like a great plan! nt

[KharmaTrain]

8. USA USA USA... (Said In Droneline GOOP Fashion)

So I guess the GOOP decided that green means more than red, white and blue. Not that we didn't always know that...but now do American workers.

I'll never forget how our then repugnican governor all but assumed the position (and some claim he did even that) to get Mitsubishi to build a plant in this state. Among the perks were millions in infrastructure improvements, tax breaks that would make the company exepmt from property and sales taxes for up to 10 years and the subtle but implied promise that there'd be no unions at the plant. Yep, the plant saved some jobs, but it screwed over workers at nearby union factories who were busted down or out because if not their company couldn't be "competitive". Yep, it was the American way...pure profit and greed.

The rub on this issue for some, me included, is the need and importance of supporting auto workers and those who rely on the auto industry for their livelihood, but I want it to be a solid auto industry...and definitely not run by the jokers who had 30 years to build better, more fuel efficient vehicles but cranked out gas hogs and tanks instead. Unfortunately we've gone over a month since this auto mess flared up and still no changes in the management at these companies...many still believing shit just happened, they weren't responsible for the mess their company is in. And, no it's not a loan...I don't see any way the auto makers can pay it off in any reasonable time frame or assurances that this loans is what's needed to turn things around...if anything, it's just to save management's ass for another couple months and we'll be back to this shit again.

At least, we should thank the GOOP in their final days before they become backbenchers...pissing off workers and showing their true colors...the American people can go hang as long as there's profits and big campaign contributions to be made.

Cheers...