"Transplant" Automakers Get Over $3.6 Billion in Subsidies; More Unions, Ralph Nader Comment
This post has the latest news on the billions in subsidies which off-shore transplant carmakers have received from state and local governments. Also, press releases from several unions supportive of the UAW and comments from Ralph Nader. We're running the first release, from Good Jobs First, in its entirety and have shortened those below it for space considerations. All quotes are verbatim.
(Working on an automotive assembly line is inherently dangerous and tiring, especially when sharing the work with powerful robots).
Responding to many queries, Good Jobs First today released its summary of state and local subsidies given to foreign-owned auto assembly plants, totaling $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.
(The BMW logo is modeled after ... what? If you said an airplane propeller, you're right).
"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.
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
(This is the logo for Maybach, a name resurrected by Mercedes-Benz a few years ago for a ridiculously long and powerful version of their S-class sedan, M-B's top of the line, their version of BMW's Bentley cars. Maybach's large "62" model has a base price well over $400,000 ).
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 supplier 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.
Machinists Union Blames McConnell, Shelby and Corker for Killing Auto Rescue Plan
The International Association of Machinists and Aerospace Workers (IAM) today rejected attempts by a trio of Senate Republicans to deny responsibility for their campaign to force General Motors, Chrysler and Ford into bankruptcy and possible liquidation.
"In a move worthy of Benedict Arnold, a handful of Senate Republicans this week successfully conspired to deny federal aid to U.S. automakers," said IAM International President Tom Buffenbarger. "It ranks second only to their attempt to blame autoworkers themselves for failing to provide sufficient concessions to satisfy GOP demands."
An Attack on the American Dream
The following is from Change to Win executive director Chris Chafe regarding the Senate Republicans' obstruction of legislation to provide emergency financial support for the auto industry.
"The ghost of Herbert Hoover must be whispering in the ears of the Republican minority. The Republican Senate Caucus in an ideological fit threatens our entire economy as well as the hopes of working families with demands to immediately reduce wages and to effectively void the workers' union contract in the auto industry.
"Hoover took a Wall Street collapse and turned it into a national calamity that lasted more than a decade. Today's Republicans seem determined to do the same. Driving down wages in the face of faltering consumption is not a recipe for recovery, but a shortcut to a prolonged crisis. We need policies to promote and expand good jobs, not obstructionism that will destroy the jobs that have been the backbone of the working middle class."
USW Condemns GOP U.S. Senate Leaders for Auto Loan Rejection
'Thousands of steel, rubber, glass, auto parts and mine workers impacted too'
Leo W. Gerard, President of the United Steelworkers (USW), condemned Thursday night's U.S. Senate vote that rejected the proposed auto industry bridge loan being supported by the UAW, the White House and the Democratic leadership.
"We have hope that the Bush administration and Treasury Secretary Henry Paulson will respond to the Republican Senate leadership failure to save America's auto industry and the millions of manufacturing workers who will be affected," the USW President declared.
Nader Comment on Auto Bailout
The following is a statement from consumer advocate Ralph Nader and Robert Weissman, director of the advocacy group Essential Action:
"In an effort to break the United Auto Workers -- a union that historically has been responsible for raising wages and benefits not just for unionized auto workers but for all working Americans -- Senate Republicans are apparently willing to permit the collapse of the U.S. auto industry."Unionized auto workers have made steady concessions over the last quarter century, including in the 2007 contract, which will have many new workers start jobs at $14 an hour. These employees will be making about half of what their co-workers earn.
"It is both an outrage and illogical for the Senate Republicans to suggest UAW worker wages and benefits should be driven down to the levels at non-unionized Japanese plants in the United States. It is an outrage because it disrespects the hard and dangerous work done by auto workers, explicitly aims to undermine the benefits of workers joining together to exercise their right to bargain collectively, and accelerates the United States' trajectory to ever-descending wages and benefits. It is illogical, too. Although the Japanese plants keep wages close to UAW rates as an anti-union strategy, they can always lower their wages further, on a unilateral basis, in a never-ending race-to-the-bottom.
"The action by the Senate Republicans is extraordinarily reckless, challenging the most important institution for advancing working peoples' living standards -- unions -- and threatening to worsen drastically an already severe recession."
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The United States is set to become the source for unencumbered, inexpensive labor for foreign auto manufacturers. In other words, as India has become the "Offshore" cheap labor source for the U.S. Information Technology Service Industry, the United States has become the "Offshore" cheap labor source for foreign auto manufacturers.
The Republican Party and the Conservative Movement have made it a cornerstone of their rhetoric to ridicule the labor movement, vilify their leaders, and misrepresent the cost of Union gained benefits.
Through the Detroit 3 (2) bailout package Republican Party and the Conservative Movement have targeted an "all-out" assault of the UAW as part of their over strategy to destroy any hope of passage of Employee Free Choice Act (EFCA) in the next congress.
EFCA preserves the secret ballot election process established by the National Labor Relations Board. The law simply guarantees that workers also have the option to form a union through a "card-check" system in which a union would be recognized if a majority of workers signed a petition testifying to their desire to organize. Under current law, workers can only form a union via the card-check system if their employer agrees to allow it. NLRB justification would not effect businesses whose gross volume of sales is less than 3.3 million.
The EFCA would give workers, not employers, the right to decide how to express the choice about going union: through the card-check process or through the NLRB election process.
Domestic employees for the foreign auto manufacturers don't make much less per hour than the Big 3 workers. Calling Toyota or Volkswagon's workers in the US "cheap labor" is laughable. Many Republicans want GM to file for bankruptcy because they understand that GM has a failed business model. Don't you realize that they have a market cap of about $2 billion and a debt of over $60 billion?
State and local governments did not grant "gifts" by offering these incentives. If the incentives weren't offered, those companies in my instances would not have located there in the first place, meaning those state and local governments would have had less tax revenues as a result.
Nader for Car Czar.
We won't let the republicans kill the unions in the auto industry. It won't happen. The republicans are being dumped, not the unions.
The auto industry won't be killed if the Big 3 don't get the bridge loans. They can still produce and sell cars while under chapter 11 bankruptcy protection.
Except people won't buy the cars, and suppliers that are owed money will not supply parts. from there its not a far step to chapter 7.
Polling indicates that anywhere from 60-80% of car buyers would not buy from a bankrupot company - reasons being who will supply parts and honor warranties, as well as decreased resale value
Ever heard of AMC?
It is not clear as to whether these numbers reflect ANNUAL OR ONE TIME Subsidies.
Great article otherwise and thank you so much for pulling it all together!
Now if our collective voter memory will record these events by the Senate Republicans, and store our collective anger and disgust for two years, we can further expunge these anti-American, home grown terrorists from the next Congress. They are trying to destroy our country while they cling to their warped GOP ideology. If they try to give speeches in front of the flag, they should be shouted down. And maybe a retooled Justice Department and FBI should investigate where they get their money and who they associate with, and if they are violating their oaths of office and the public trust.
Great article. The foreign brands not only receive subsidies from our own govt, but they also recieve them from their home govts as well. The japanese subsidize their automakers R&D, the Koreans gve their automakers export tax credits and both protect their domestic markets. For example the Koreans only allowed in 700 US autos last year while exporting 700,000 to the US
The Europeans benefit not only from higher wages and more vacation than US autoworkers, but the govts fund their retirements and health care, costs that put US autos at an avg $2000 competitive disadvantage.
What we are seeing (hopefully) is the collapse of neocon/neolib "free" market and "free" trade ideology once and for all. For too long US companies and workers have suffered under this ideology that has economic policies that favor the finacial sectors (and therfore the wealthy and connected) over manufacturing (our wealth creation, prosperity sharing, innovation and technology driving engine) and trade policy that puts foreign companies ahead of our own and forces our workers to unfairly compete with thrid world workers stagnating and adrving down living stds.
Looks like in their blind zeal, the the ideologues have unwittingly made the case for national health care, and scrapping our idiotic "free" trade policies, which don't work when no one else is playing by the rules, not that it ever did anyway
The Big 3 auto makers receive a huge amount of subsidies by foreign nations for their operations abroad, plus they receive subsidies for R&D for fuel efficient vehicles (particularly the Volt). Also, those Big 3 workers abroad don't get the same subsidized retirements that US workers receive and GM and Ford have a large number of their employees abroad.
can you blame them for seeking help elsewherewhen our own govt won't?
Sweden has commtted to helping Volvo
Does anyone here think japan would ever let Toyyota or Honda fail? not on your life
they already subsidize their r&d and Toyota just borrowed 400 million working capital
Really just about any industry is subsidized in some way if some entity were to investigate all sectors of the economy, this bit about the invisible hand guiding the free market sounds nice in academia but can anyone say for sure that it works in reality. I'll bet there isn't a place on earth where truly 'free' markets exist in the classic sense.
I am rooting for the American automaker now. I have only driven foreign cars, but I intend for my future to be the American car. I just hope that it will be competitive in mileage and everything else. Just watching those republicans put the foreign automaker over our fellow Americans made me feel bad and increased my patriotism. Thank you, Republicans, for giving me the will to "buy the American car."
I think you will be pleasently surprised. Consumer reports and JD Power rates US quality as good and some cases better than the Japanese brands and well ahead of the European brands
Ford just got the highest safety ranking from the Insurance institute (who imposes stricter testing stds than the govt and industry does) for having the most models with 5 star crash ratings
GM offers the most models that get over 30 mpg
So many of the myths about US cars have lingered from the 1980s when they may have had a small kernel of truth, unfortunately Detroits marketers havent done a good job offsetting and dispelling those myths
Seemingly, the beneficiary banks got money they don't necessarily need. JP Morgan doesn't intend to increase its loans, but is talking about acquisitions. Elsewhere, the Huffington Post shows states giving millions to foreign automakers to locate there. Frankly, I think corporations should pay taxes and not the other way around.
GM's situation seems genuinely desperate, and to lose them would be a major blow to America's industrial independence. 2008 found GM between a rock and a hard place. It had to keep producing in its struggle for market share, but the market declined by half, and its expenditures just came back to bite them. Saving GM would be a cheap contribution to the make-work programs Obama is considering to bring our recession to an end. The bailout is a loan, and the federal government has had good experiences when it saved a major rail line or, later, Chrysler. We got all the money back.
Indeed - the Chrylser loan program was a smashing success, jobs and a company saved and revitalized, and the taxpayers got their money back with interest ahead of schedule - a win win scenario
In the 1970s Congress took over several struggling railroads and formed Conrail. Conrail was profitable and was eventually sold back to the private sector at a profit to the taxpayers. Again a win win, customers and towns kept their rail service, railroad workers kept their jobs and taxpayers got their money back
Of course that was a time when people understood the importance of our manufacturing base to our economic health and national security
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