Ford's secret deal (to save, expand Atlanta auto plant)

[Bozita]

This is the corporate welfare game as played on the state level.


http://freep.com/apps/pbcs.dll/article?AID=2005512030318

Ford's secret deal

BY SARAH A. WEBSTER, MICHAEL ELLIS and GINA DAMRON
FREE PRESS BUSINESS WRITERS

December 3, 2005

While workers at Ford Motor Co.'s Wixom Assembly Plant cling to new hints that their plant will be spared in Ford's next round of cost cuts, the automaker revealed this week that it reached a secret agreement with the State of Georgia to expand a plant instead of closing it.

Ultimately, though, neither plant may be out of danger considering the automaker's dismal sales performance.

Ford, identified in court documents as "XYZ Corp.," has reached a secret 30-page preliminary agreement with Georgia to keep its Atlanta Assembly Plant open and expand it, in return for incentives such as grants, tax breaks and road improvements.

The deal was revealed during a court hearing in Georgia on Monday.

The incentive package, which remains under a court seal, needs to be approved by the state General Assembly.

more...

[MissMarple]

1. Colorado Springs made a deal with Western Forge...oops.

It was in our paper today. How many ways can you spell WELFARE? And this wasn't in the business section, it's news, even though the city did this last fall. :eyes:

[BronxBoy]

2. So the Georgia Legislaure

can negotiate with taxpayers money in secret???

How nice.

[oneighty]

3. Next step

Negotiate with the state to break the union at said plant. We all know a low paying job is better than no job. Right?

180

[CrispyQ]

4. And when sales continue to tank & they close the plant at a later date

the citizens will not only be out of work, they will be stuck with the impact of those tax breaks & cost of road improvements.

When are people going to wake up? Corporations do this all the time. They promise jobs in return for tax breaks, tax incentives, great real estate/lease deals & when they break their agreement, the tax payers are stuck with the bill.


http://www.corpwatch.org/article.php?id=12540

"The Great American Jobs Scam" by Greg LeRoy

snip...

Lurking within the records of most cities and states in America there lies a scandal. A tax scandal. A jobs scandal. A corporate and political scandal.

It's the Great American Jobs Scam: an intentionally constructed system that enables corporations to exact huge taxpayer subsidies by promising quality jobs - and then lets them fail to deliver. The other benefit often promised - higher tax revenues - often proves false or exaggerated as well.


more...

Scams like this cost taxpayers an estimated $50 billion a year in total spending by states and cities. The bottom of the iceberg - in every sense of the word - is the tax breaks. Those granted by states - income, sales, and excise taxes - are the least visible, least accountable, and most corrosive means by which states fund job creation. Those granted locally - in particular, property tax abatements and diversions - are especially harmful to schools.

[Trillo]

5. So where is the Free Market? nt

[billbuckhead]

6. Foreign carmakers have gained similar concessions from states

By Mitch Emmons ([email protected])

AU RESEARCHERS QUESTION STATE'S INDUSTRY-LURING CONCESSIONS
Robert Ekelund, left, and Richard Ault
AUBURN -- "The benefits from using tax incentives to lure new business and industry -- such as Mercedes-Benz -- to Alabama may not be the boon first projected, according to two Auburn University economists.
Professor Robert Ekelund Jr. and Associate Professor Richard Ault of AU's Department of Economics say the state's forecasting methods provide only a partial view of the long-term picture. Both say Alabama needs to be more stringent in determining how much and when industry-luring concessions are given.

"Industrial recruitment is a competitive business, and nearly every state offers some kind of a package," Ekelund says. "But such tax incentives should be offered only where the net economic effect on existing Alabama taxpayers fully reflects consideration of all relevant costs and do not exceed the net increase in state revenues that the new industry will generate."

The two became interested in Alabama's industrial recruitment tax incentive program after it was used to bring a Mercedes-Benz plant to Tuscaloosa County. announced. In outbidding other states, Alabama offered a tax incentive and subsidy package worth between $250 million and $300 million."
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<http://www.auburn.edu/administration/univrel/news/archive/10_95news/10_95concessions.html>