Flint Approves Tax Breaks for GM Engine Plant for Volt and Cruze
27 August 2008
Detroit News. The Flint, Michigan City Council approved GM’s request for tax incentives to support a $359 million investment in a 530,000-square-foot plant in Flint, where workers will build 1.4-liter engines for the Volt as well as its new compact car, the Chevrolet Cruze (Family 0 engine plant).
The automaker’s request for tax incentives...stirred uneasy feelings among some residents of Flint, the birthplace of GM, which has seen thousands of jobs eliminated over the years.
“A lot of people still feel...General Motors owes us more than just a couple hundred jobs,“ Councilman Jim Ananich said. “I understand what people feel—I still sometimes have those feelings—but as competitive as the market is and the trouble General Motors is having, we have to help them with whatever we can do to keep them competitive.”
GM also is seeking additional tax incentives from the state.
GM will reveal the production version of the Volt at either the Los Angeles International Auto Show in November or the Detroit auto show in January.
Glad to see that they are going back to Flint. That town has been hit soooo hard....
Posted by: GreenPlease | 27 August 2008 at 05:17 AM
“'A lot of people still feel...General Motors owes us more than just a couple hundred jobs,' Councilman Jim Ananich said.'
Really? Think how much the homeless victums in New Orleans owe Katrina.
Maybe politicians like Jim Ananich, that passed laws that prevent GM from paying wages as low as Toyota and Honda pay their American auto workers, owe something.
Posted by: ToppaTom | 27 August 2008 at 05:34 AM
“'A lot of people still feel...General Motors owes us more than just a couple hundred jobs,' Councilman Jim Ananich said.'
Really? Think how much the homeless victums in New Orleans owe Katrina.
Maybe politicians like Jim Ananich, that passed laws that prevent GM from paying wages as low as Toyota and Honda pay their American auto workers, owe something.
Posted by: ToppaTom | 27 August 2008 at 05:34 AM
Councilman Annanich is just voicing the American zeitgiest of entitlement: "The world owes us..."
It is probably the one thing that is hurting our country most.
If we try to maintain this status quo Japan, South Korea, (and did I mention the China + India) will continue to eat our economic lunch... while we try to improve our lifestyles by dipping into our homes' equity. (oh wait, that bubble's imploding already)
Posted by: DieselHybrid | 27 August 2008 at 06:53 AM
No one has answered the question for more than 35 years of what we will do for good paying jobs. Unions used to have lots of members, now they have less than half as many. CEOs will take the work to low wage countries because they claim the shareholders want that. Who are the shareholders? They are someones pension fund or 401k.
No one has answered the question about world trade. What do you do when another country has low wage rates and no pollution laws. It is a race to the bottom and local tax breaks are just bidding on that race. You can make all the products in low wage countries for decades and you still will not have lots of customers for your products. The world population of poor people is just too large.
30 years ago, business was interested in selling Coke to 1 billion Chinese. Now the Chinese sell us more than $200 billion more than we sell to them and we borrow more than $300 billion per year from them to pay for it. People have to shop at WalMart to buy cheap Chinese goods because they lost their good paying jobs to China. You will hear that the "free" market solves all problems over and over until it is over once and for all.
Posted by: sjc | 27 August 2008 at 09:06 AM
Just another example of American corporate black mail to get out of paying taxes. This happy relationship between big corporations and politicians has been going on since the days of the big RR expansion across America.
Posted by: garth | 27 August 2008 at 09:24 AM
Life is full of competition and testing oneself-from grade school test scores to job promotions. Now there is world wide competition. The US auto industries and labor lacked foresight and now they're paying the price. Good luck to Flint.
Posted by: Devarity | 27 August 2008 at 10:19 AM
Hey look, the truth is I'm an alienated shill who hates materialism so I pretend to be a citizen of the country I hate. I goes over great with the other shills. What a country!
Posted by: | 27 August 2008 at 12:46 PM
"Now there is world wide competition."
How can you compete with dollar an hour labor? Housing in those countries costs less than a few percent of what it does here. You can exploit all the cheap labor you want and only the rich will get richer.
Posted by: sjc | 27 August 2008 at 02:08 PM
ToppaTom is right on.
Additionally, sjc and garth spoke more to their ignorance in public finance and economics than they did about the global economic landscape. Garth.. Seriously? You're blaming low taxes on hurting our economy? How about over inflated union wages ruining three great American companies?
sjc.. How about more doom and gloom? If it is true that fewer people are in unions.. good. That should speak to the increased ability for the average American to negotiate for his own wage. A race to the bottom? What bottom? The bottom would be a country supported by growth-crippling taxes. Lower corporate taxes should be universal... you wouldn't see so many jobs shipped overseas. Free markets actually created the economy... In your world, where did our economic prosperity come from? Barack Obama's socialized healthcare system?
Posted by: Bryan | 28 August 2008 at 05:12 AM
Well said Bryan & ToppaTom
GM, Ford, Chrysler, their unions and the rest of the US economy better learn to compete - or get left in the dust. Historically, that has ment making sacrifices to get an education or start a business. Only in the 1930s-1950s has labor held business hostage to the degree that they could demand obsurd wages for high-school (or less) skills. Now we're seeing enough world-wide competition that GM/Ford/Chrysler cannot afford that anymore.
Remember - it isn't that you can't have a successful auto company in the US - you just can't do it with the UAW cost structure. Hyundai, Honda, Toyota and Nissan are doing very good business building cars in the Southeast US with non-union labor.
Shane
Posted by: | 28 August 2008 at 07:11 AM
We all better get over this entitlement attitude.
GM/Ford/Chrysler better learn to compte
UAW needs to understand that they will only get paid what their skills are really worth on the open market - not the price they have extorted from business owners.
Anyone that doesn't like that better go to school and get the skills that command the price they want in the open market - or take the chances and struggles to create a business.
Anyone who things a high school (or less) education should entitle them to a $75/hr job for life - is going to continue to be corrected by a global marketplace. (unless we want to become a protectionist island - didn't work for fuedal Japan, didn't work for lots of other countries, it would be a disaster today)
Shane
Posted by: | 28 August 2008 at 07:19 AM
This truly is a race to the bottom for the U.S.
Over the past 50 yrs american corporations have moved their manufacturing overseas and handed over their intellectual property too.
I don't see where we are better off, except for a small elite. (well, i guess our air is cleaner)
I can't blame Flint for holding a grudge but they should fall on their knees and kiss GM's rear for even considering keeping a tiny bit of manufacturing in Mich. The cruel fact is that it would be easier for GM to build it in Alabama or China.
Until China and India are economic equals to the U.S. this trend will continue. It will take another 50 yrs for that to happen. Let's hope we survive in the mean time.
Posted by: danm | 28 August 2008 at 07:41 AM
Bryan,
I know quite a bit about Economics. It is you who are truly ignorant of the fact that you know nothing and think that you know everything.
Posted by: sjc | 28 August 2008 at 11:03 PM
sjc-
You may be right. however, please tell me what economy operates more efficiently than a free market?
Posted by: Bryan | 29 August 2008 at 07:30 AM
To have a level playing field, free trade should only be conducted with countries with comparable labor laws, OSHA standards and Environmental laws. Free trading with countries who neglected their environment and who abuse their workers will only lead our industries and subsequently, our economic future in ruins.
Japan Inc. did not get there because of the get-rich-quick global corporations exporting jobs out of the country, but because of their ultra-nationalism resulting in protectionistic trade policy and paternalistic government that nurtured promising industrial sectors until they become strong enough to compete with the world. Likewise, the resurgence of Nationalism in China is the main factor responsible for China's insdustrial might, and we now see it in Russia, too.
The American Corporations and our Government and our People must unite for a common purpose: the survival of our economy and our democracy. Quit sending jobs overseas.
Posted by: Roger Pham | 29 August 2008 at 07:54 PM
@ SJC:
There still some areas where America is leading the world in pay, and those jobs aren't disappearing: academia and medicine. A tragedy of modern America is that while we are hemorraging so many good jobs and replacing them with strip mall and retail jobs, doctors and university professors are laughing all the way to the bank. Tuition rates and medical bills keep going up, but no one wants to cap tuition rates or reduce tuition - the politicians simply want to give people more money to go to college (is that really the answer?). As for our screwed up health care system - it's self-evident that these people, who have our lives in their hands, have been gouging us and gaming the system for far too long...
Posted by: ejj | 30 August 2008 at 06:13 PM
Employment laws, safety laws, minimum wages, income tax deductions, social security dedutions, state and local taxes on businesses, environmental laws, sales taxes and property taxes et-cetera make a free economy impossible without high import taxes that would match the avoided cost of these laws in countries without them. There is no reason that a computer built in China should not pay the same amount into the social security systems as teh same computer built in the US did. Why should ethanol from Brazil have a higher percentage tax than phones from China.
There has not been a free market in oil. The US government restricts drilling and leasing of lands and alows speculators to bet on the latest restrictions.
There is not a free market where there are govenment taxes and regulations, and tariffs, equivalent to the cost to operate on US soil, should be imposed on all imported goods. Oil is highly taxed by most european governments and the CO2 tax will increase this.
The US free market died during WWII when income taxes actually began to be collected from most workers.
There must be imposed a minimum tax of $20 on a barrel of imported oil.
Life is not safe; the dangers of less CO2 may be greater than that of more CO2 to the US population as a whole. Life cannot even be made much safer by law. A painted line down the center of roads was more effective at reducing accidents than all the laws had been. A simple low curb on a river bridge reduced accidents by a large factor in Portland.
Stop talking about a free market when the US government stops the production of oil by action and in-action and blocks the building of substitute coal and shale using fuel factories on the false basis that CO2 production might be too dangerous. ..HG..
Posted by: Henry Gibson | 30 August 2008 at 08:38 PM
The idea of electrical engine into vehicles is welcomed. It is a great idea that will revolutionalize the transportation industry. THis is a breakthrough.
Posted by: Jean Ntakirutimana | 28 September 2008 at 02:47 PM