The following is from a recent issue of The Tennessee Journal, the political newsletter of record in the Volunteer State (see TBR article of 11/8):
LEE SECURES $884 MILLION INCENTIVE PACKAGE FOR FORD’S MEGASITE PROJECT
“Ford Motor Co. didn’t hire any lobbyists to work the (recent) special legislative session to approve a record amount of incentives and seal the deal on the company’s construction of an electric pickup truck and battery plant called Blue Oval City at the Memphis Regional Megasite.
“Turns out, they didn’t need any. A phalanx of senior officials in Gov. Bill Lee’s administration and legislative leadership in both chambers was more than willing to make the hard sell on the automakers’ behalf, resulting in the proposal’s overwhelming passage.
“The nearly $884 million package comprises $500 million in grants for Ford and its partners, $200 million for road work, $138 million for site prep and a wastewater pipeline, $40 million to build a new College of Applied Technology, $5 million for consulting and legal services, and $728,000 to pay for the first year of the Megasite Authority.
“Hearings got off to a bit of a bumpy start as lawmakers appeared to have more questions than anticipated about the arrangement, but the incentives package and the creation of the new Megasite Authority passed on votes of 90-3 in the House and 27-3 in the Senate.
“DISSENT. The most vocal lawmaker among the opponents was Republican Scott Cepicky of Maury County, who warned colleagues about his home area’s “37 years of dealing with a Detroit automaker — General Motors in Spring Hill. Cepicky said the explosive growth surrounding the plant has required the construction of 14 schools in Maury and neighboring Williamson County. Their cost places an “incredible tax burden” on residents, he said. (Cepicky and five other legislators, all Republicans, voted against the package, although the vast majority of their GOP colleagues supported it) …
“LABOR QUESTIONS. (Majority) Republican supporters of the Ford deal were eager to brush questions about the United Auto Workers’ future role at the plant under the carpet. The automaker is considered to have the strongest relationship with the union among the Detroit Three, and it appears unlikely the West Tennessee facility will be Ford’s lone assembly plant without UAW representation.
“The National Right to Work Committee sought to drag the issue back into the foreground by running full-page ads in Gannett newspapers and publicizing a letter to Lee urging the inclusion of language in the incentives bill to make the money contingent on a requirement for union representation to be decided by secret ballots by workers. No such proviso was included in the legislation.
“The union wants companies to recognize them as bargaining partners via the ‘card check’ method, i.e., once a majority of workers have signed up to be represented by the UAW. Each side argues the opposition’s preferred method is open to intimidation tactics. Ford has declined to speak about its plans regarding the union at the plant, other than to say the ultimate decision will lie with its employees. With production at the facility more than three years away, everybody will be happy to let the issue hibernate until later …”
Of course, Michigan will be spared any angst about “explosive growth,” “incredible tax burdens” and union representation and potential labor unrest because these 12,000 new auto manufacturing jobs (in Tennessee and Kentucky) won’t be anywhere near the Great Lakes State.
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Factory jobs today pay less than the average in Michigan…and in Tennessee. Tennessee has lost 25 percent of its factory jobs in the last 20 years (Michigan has lost 30). Why would any responsible person spend limited tax dollars…or provide additional tax cuts, as Michigan did in cutting state business taxes by an inflation adjusted $3.5 billion a year today under Gov. Snyder…going after jobs that pay below the state average wage and are being replaced by automation…when the growing part of the economy in Michigan and nationally is the knowledge economy. To win there you need to invest in preparing, retaining and attracting college grads, with additional spending needed in Michigan in education (particularly higher ed…where we today spend $1 billion inflation adjusted less than in 2000) and in cities where college grads are moving to (and we have cut revenue sharing and limited the ability of cities to meet the needs that college grads want. Bottom line: States that win factory jobs are poor states (Tennessee ranked 36th nationally in per cap income 1990…now its 38th; Kentucky moved from 43 in 1990 to 45; Alabama from 42-47). States that attract college grads are wealthy states (Washington from 15 in 1990 to 6 today in per cap income; Minnesota is the state with the highest share of college grads and it has moved from 16 to 12th today; Michigan was 20th in 1990 per cap income…we have chased factories with MEDC policies, direct payments to companies and then massive tax cuts…and now we are 33rd in per cap income). if we want to be poor…chase factories. If we want to be wealthy…create and attract college grads. Its’ just that simple. Bill, you remember the Flint of your youth. It ain’t coming back. You need to embrace the future.
Well said. In addition, Michigan governors have promised to “diversify the economy” for decades, a lot of decades. And even if we kept the same or even more auto production in Michigan that we had fifty years ago, automation permits cars and trucks to be built with a fraction of the number of workers required per vehicle compared to past requirements. Accordingly, Michigan would have had a declining economy even had no manufacturing left the state, and we had remained the manufacturing center we were fifty or sixty years ago.
And I’m sure Ford Motor Company executives will donate handsomely to Gov. Bill Lee and legislative minions in future elections in both chambers who supported this abomination of tax incentives that come directly from the pockets of Tennessee citizens. Corporate welfare by any other name is still welfare.
It seems your critics overlooked the fact that Tesla has added over 20,000 jobs in 2020 and will likely exceed 21,000 new jobs this year. The 10-K report reveals a headcount of 70,757 employees.
Of course most of those jobs are in corporate-friendly locales.
People pay taxes, not corporations.
The real state largess under Jennifer G. was a complete fail.