Are Incentives "Fair Play"?

I would like to throw a topic out for discussion in this forum regarding incentives and tax credits for motivating companies to keep plants open, relocate, or build new.

I know we have had discussion in this forum about this topic before, but it was incidental in discussing how import companies are getting big credits to build a new plant in a new US state/town, etc.

Well, here in Nawth Cakalaky, we are embattled in a statewide debate about an incentives package that a local official crafted for GoodYear Tire and Rubber Co. located outside Fayetteville, NC.

In short, GoodYear asked local officials for some "assistance" in trying to help them keep the local plant open and operating - basically help them with their bottom-line via tax cuts and credits on future capital investments. Local reps took this to the county officials, and hey took it to state officials, and eventually a plan was drawn up to give GoodYear about $40-million worth of incentives over the next 5 years. It passed the state house and senate and was sent to our governor who vetoed the bill, saying, " There are no guarantees in this legislation that will keep the plant open or the employees working there after we give them the money." Essentially, our Governor was not going to give GoodYear a $40-million credit only to see them take it and shut the plant anyways in a few months, laying off the people, and running somewhere else to build another plant because of a better package offering. (At this point, I must interject that I agreed with the Governor too and approved of his excuse for the veto.)

Lawmakers went ape-chit, and formed a rally to over-ride his veto with a 70% approval in the House and Senate. On the day the vote was to take place, a second proposal was made that set some restrictions on the way the money would be credited to GoodYear, and the Governor verbally agreed to the new terms with restrictions. It was set into action, and went through the House and Senate in record speed (less than 2 days), and was approved yesterday (11Sep07).

To everyone's shagrin, Bridgestone Tire & Rubber has jumped on the bandwagon now and wants some money too. This is the same Bridgestone facility in Wilson, NC that put out some of the bad Firestone ATW tires that were involved in the Explorer issue afew years back. Well, now all of a sudden, they need credits too to make their operations look better to investors and avoid closing or laying off employees.
So the new legislation is seen as opening the door for anyone that needs a break to get it from the state government.
It's really becoming a nightmare here, and is dominating the news and water cooler discussions.
I am AMAZED at the broad array of opinions and passion with which these opinions are being shared around here, and wondered if it was the same on the internet (this board especially :D).

I have attached a few links for those interested to see the details for themselves.
Two May Get Grants (http://www.journalnow.com/servlet/Satellite?pagename=WSJ/MGArticle/WSJ_BasicArticle&c=MGArticle&cid=1173352718746) - an article by the AP on the new legislation just passed, Bridgestone wanting in, and how the restrictions eliminate many companies from qualifying.
General Assembly agrees to incentives deal to help tire plants (http://www.journalnow.com/servlet/Satellite?pagename=WSJ/MGArticle/WSJ_BasicArticle&c=MGArticle&cid=1173352715606) - a good summary by the AP of the overall situation, including details of the new law.
Goodyear to get incentives (http://www.fayobserver.com/article?id=272139) - a local article written by a local reporter in Fayetteville about the pros and cons (good read actually).

You can CLEARLY see both sides of the argument in this example, and I think it is HUGELY pertinent to today's business environment. Companies are looking at this incentive technique for relief, and maybe their case for keeping jobs here has a little validity. BUT, what is good for 1 is good for all, so the flood gates bust open and everyone starts to look for a free ride (or ate least some free money).

Can you see Ford and GM asking local state and County governments for incentives to keep a plant open?
Michigan's governor even tried to offer such incentives to Ford about 2 years ago.
To me, this plays right along the lines of some of our discussions about how domestics could get incentives to rebuild existing plants, or even close old ones and look in other states to build new ones because the potential sites would DEFINITELY offer incentive packages to have a new plant built in their area.

So where do we stop?
How do we handle this "incentive" war?
What prevents us from becoming a tax-free society for competitive businesses?

:shrug:

Why isn't this in the lounge?

Why isn't this in the lounge?
Proud certainly doesn’t need me to defend his decision to place this topic here but I would suggest that it is not in the “lounge” because it is a serious topic that significantly impacts the auto industry in this country rather than the “fluff” that is frequently found in the lounge.

To answer your question, yes they are “fair” but they are inappropriate.

Of course, this issue often comes up as being part of the “un-level” playing field the domestic auto industry has to face as compared to transplant automakers; an assertion I reject for various reasons.

That said, I’ve been on the record (here) for a long time that I believe government bodies and quasi-governmental institutions should stay out of private business and not offer “incentives” to business to locate, re-locate or stay in an area for, among other reasons, that it is not the proper role for government or the public’s taxes.

I firmly believe that whether you are talking about a factory or a professional sports team or anything in between, if it’s not in the business’s best financial interest to locate, re-locate or stay in an area then public taxes should not be used to prop them up…if the business, sports-team or whatever can’t keep the door open without an incentive package then they probably should close the doors (or perhaps someone needs to realize that the entire tax structure may be completely out of whack).

The problem is, once one location’s government does it (or does it for one business) then every other location has to do so in order to compete and/or every other business wants the same treatment (and who can blame them?)…if Tennessee has offered a package to Toyota (which they did) then can you blame Mississippi or Indiana from doing the same?

I don’t blame the businesses here…the real fault lies with the politicians who are willing to spend our money on things they should not be. However, such is the way of the world and like Pandora’s Box; it won’t do any good the close the lid now.

Why isn't this in the lounge?
Fair question.

Robert is correct. I don't like to get into lounge discussions on this board or any other because you get everyone that knows how to turn on a computer posting crappy, one-liner attitudes all the time. You will not find a post from me in this lounge or any other - try it and see.
My time is too valuable to sift through the teeny-boppers and egomaniacs that typically live in lounges.

This forum probably has the most serious, well-educated, rounded body of regular readers of any forum I visit on the web. We can discuss topics in a civilized manner, and most act very professionally in here. I really only care about the opinions of those regulars in this forum for this topic.

And besides, it actually could very well end up affecting the automotive industry (along with all the others) because NC is actually on the short list of a few companies looking to build auto plants down south in the next few years. Honda recently selected NC for it's new HondaJet facility, and Mercedes-Benz has been nosing around here recently as well. I think that hits the nail right on the head when contemplating what carmakers might look to build new plants here with big incentives, as opposed to re-tooling their existing plants elsewhere with no incentives to help finance the investment. That's "automotive news", right?

This is how the game is played. Big companies say they want to expand or build new or just stay open to get a tax abatement. Usually a big co can get 5-10 of no or reduced property taxes in the county I live in/work for.

The only trouble is that foreign governments do it, so why shouldn't we do it to stay competitive. Additionally, people in government are all corrupt to some extent and like to help out their cronies. Maybe it is best that we just give the same handouts to everyone and then it won't matter in the end.

Since it was asked...

And besides, it actually could very well end up affecting the automotive industry (along with all the others) because NC is actually on the short list of a few companies looking to build auto plants down south in the next few years.

Which is why I won't move it. It is "Automotive News" and not "I just bought this new car because this incentive.

Sometimes it is a tough call, though.

Anyway...

To answer your question, yes they are “fair” but they are inappropriate.

Of course, this issue often comes up as being part of the “un-level” playing field the domestic auto industry has to face as compared to transplant automakers; an assertion I reject for various reasons.

That said, I’ve been on the record (here) for a long time that I believe government bodies and quasi-governmental institutions should stay out of private business and not offer “incentives” to business to locate, re-locate or stay in an area for, among other reasons, that it is not the proper role for government or the public’s taxes.

I firmly believe that whether you are talking about a factory or a professional sports team or anything in between, if it’s not in the business’s best financial interest to locate, re-locate or stay in an area then public taxes should not be used to prop them up…if the business, sports-team or whatever can’t keep the door open without an incentive package then they probably should close the doors (or perhaps someone needs to realize that the entire tax structure may be completely out of whack).

The problem is, once one location’s government does it (or does it for one business) then every other location has to do so in order to compete and/or every other business wants the same treatment (and who can blame them?)…if Tennessee has offered a package to Toyota (which they did) then can you blame Mississippi or Indiana from doing the same?

I don’t blame the businesses here…the real fault lies with the politicians who are willing to spend our money on things they should not be. However, such is the way of the world and like Pandora’s Box; it won’t do any good the close the lid now.

Dang-it! We agree! :D

My first reaction was one of anger that NC was going to throw $40-million at a private enterprise that would simply pass it on to the shareholders of that same enterprise as "profits", or at least more bottom line operating margin. And, I'll wager that only a small portion of those shareholders will report that income in NC for taxable purposes - especially since GoodYear is based in Ohio as I recall. Then, given there were no guarantees of return or even the plant staying open - I was sealed against it.

But, as you said Robert, other counties (and states even) have stepped in by force or by peer pressure, and started "bidding" on the business as well simply to compete. This is my fear. It's like one car company offering incentives for vehicles, or offering employee pricing to the public... it sets forth a wave of similar activity for anyone seriously competing, and it ends up being the one with the deepest pockets that wins out - which is not always how it should be.

In this case here in NC though, the most interesting thing for me is how Bridgestone was watching and jumped on the bandwagon too. Fayetteville (GoodYear) and Wilson (Bridgestone) are a good 2.5-3 hours-drive apart from each other, and are a good 6-8 counties apart, yet Bridgestone knew what was happening and jumped right in.
The fear now is that every company needing a break will ask for the same.
Well, who DOESN'T need a break?!?!
So in the extreme case, all big businesses deserve to operate in a tax-free state where they can all maximize their income potential and not have to cut-back or lay-off, right? It can't happen... state governments will go broke trying to provide infrastructure for the plants without getting any tax revenue from them to pay for the roads, highways, water systems, sewage treatments, etc that plants require to operate.

This really strikes me as a lose/lose proposition, but it is getting a good deal of support from citizens and legislators. I don't know what people are thinking?
I guess they are living in the short-term, and I am looking down the road at the long-term affects.
I dunno.

Maybe it is best that we just give the same handouts to everyone and then it won't matter in the end.

But what is the difference in giving ANY handout to everyone, versus NO handout to anyone?
Equal is equal, right?

So if North Carolina does not offer Mercedes-Benz an incentive package to locate here, WHO will step in and force Alabama and South Carolina not to offer incentives as well?

See what I mean? I am with you on the equality for all thing, but I think it needs to be the good old way where you simply go where you have the resources you need for your business. Textile and furniture companies all built in NC and SC because we have vast forests with hardwoods galore and local ports to ship goods all over the globe. Car companies and foundries built in PA, OH, and MI because that's where the iron-ore was and the steel was being produced. Tax bases were not ignored, but states weren't throwing multi-millions at potential new businesses like they do today. I think this is real dangerous.

Would ANY other state want to bid against say California or New York to land a plant that will generate $200M in total sales but only $100K in taxable revenue for it's constituants? I sure wouldn't. :no: Deep pockets beget deep pockets.

such is the way of the world and like Pandora’s Box; it won’t do any good the close the lid now.

That pretty much sums it up.


A friend and I discussed this some time ago. It turns into a subject that is far to complex for anyone to really grasp as one gets into the whole question of "where do you draw the line?" and "how much is too much?".

Ultimately, I suppose government needs to think like a business, "will the tax generated by the spin-off of keeping/attracting a company in a location exceed the tax concessions/grants given to the company?" If the answer is "yes" then it seems prudent to proceed. There's the flip as well, the lost spin-off revenue and costs generated by letting a business go vs. the incentives to keep them.

An unfortunate downside to this, especially in mature industries, is that the playing field is then not level, creating the "me to" scenario as Bridgestone demonstrated is this particular situation.

I don't have any answers, but it sure is an interesting topic to try and wrap one's mind around.

That's a slippery slope.

Something similar happened to Chrysler.

Couple of years ago, UAW was willing to give mid contract concessions to Ford and GM because they were in bad shape. Chrysler wanted the same deals, because (accurately) those deals penalized them, and put them at a disadvantage. UAW disagreed.


If I remember correctly, a much closer thing happened in the late 70s... again involving Chrysler, but this time in the opposite direction.

Government (barely) approved a loan guarantee for Chrysler, essentially co-signing loans that Chrysler got to turn themselves around. Ford was also going down the tubes, right behind Chrysler. If memory serves, they floated the idea of loan guarantees past congress as well. Ford got shot down.


IMO, I think the legislature should have realized there was more than one tire company there, and that they would want the same cash-to-stay package. I think anyone who reads past situations like this (or has more than 1 kid) would know that something like this could happen. :shrug:

That's a slippery slope.

Something similar happened to Chrysler.

Couple of years ago, UAW was willing to give mid contract concessions to Ford and GM because they were in bad shape. Chrysler wanted the same deals, because (accurately) those deals penalized them, and put them at a disadvantage. UAW disagreed.


If I remember correctly, a much closer thing happened in the late 70s... again involving Chrysler, but this time in the opposite direction.

Government (barely) approved a loan guarantee for Chrysler, essentially co-signing loans that Chrysler got to turn themselves around. Ford was also going down the tubes, right behind Chrysler. If memory serves, they floated the idea of loan guarantees past congress as well. Ford got shot down.


IMO, I think the legislature should have realized there was more than one tire company there, and that they would want the same cash-to-stay package. I think anyone who reads past situations like this (or has more than 1 kid) would know that something like this could happen. :shrug:

Guy, you just hit a nail that even I had not thought of yet in the last week or so this has been going on here...
There is a huge difference between a company getting incentives to locate/stay in an area versus getting a government-secured loan to pull themselves out of reorg/bankruptcy.
BUT - is that line getting blurred now?

More directly, GoodYear made the request because of dire conditions in their plant and their impending cutbacks or even shut-down. That - to me - is "needing financial help". How is that really so different than getting a loan to tide creditors until you reorg and pull out (if you pull out if it) like Chrysler did in the late 70's?

So has this become the modern way of getting financial assistance from the government without having to accept terms of an actual loan that has to be paid back? D@mn I sure hope not!

I'd love to know if any of the plants closed recently by Ford, Visteon, Delphi, GM, Chrysler or any other significant players ever asked for such concessions from their local governments before closing up, and if they did not getthe concessions - why not.

As much as we (or at least I personally) harp about wanting the government to get involved in levelling the playing field for our domestic manufacturers (with regards to importing goods and vehicles and allowing our producers to build in other markets), I honestly think this is a case where I think government should not get involved in "indirect financing" of competitors in business bases solely on their location and politics.

That pretty much sums it up.


A friend and I discussed this some time ago. It turns into a subject that is far to complex for anyone to really grasp as one gets into the whole question of "where do you draw the line?" and "how much is too much?".

Ultimately, I suppose government needs to think like a business, "will the tax generated by the spin-off of keeping/attracting a company in a location exceed the tax concessions/grants given to the company?" If the answer is "yes" then it seems prudent to proceed. There's the flip as well, the lost spin-off revenue and costs generated by letting a business go vs. the incentives to keep them.

An unfortunate downside to this, especially in mature industries, is that the playing field is then not level, creating the "me to" scenario as Bridgestone demonstrated is this particular situation.

I don't have any answers, but it sure is an interesting topic to try and wrap one's mind around.

Interesting post!

The "me too" scenario you elude to is my main concern in starting this thread in fact.
Our state has made a LAW now that allows companies fitting into a set of criteria to get financial aid in the form of credits and money. ANYONE can apply for it if they meet the criteria. It's almost like you are setting-up a fail-proof business district of sorts.

One of my biggest fears is the tax burden that will fall back to the residents of this state after a few of these big dawgs take the incentives, but then fold up and move out anyways - AFTER the finances are awarded. We property-owners will be left holding the bill - as usual. :mad:

This is not the sort of example I think we need to set for other states or businesses. :no:

A co-worker just told me yesterday that he heard NC was one of the most favorable states for new business to locate because of laws that favor employers. For example, we are a "right to work" state, which basically means unions are scrutinized and regulated, and an employer can fire any employee at any time for no reason and the employee has no rights to recourse (given laws about predjudice, discrimination, and such apply of course). This incentive law just adds to the fuel I suppose.
Ironically, the co-worker just moved here from Lear Corp. up near Delta, Ohio a few months ago.:yes:

It is an interesting topic. I know that when Toyota, built a plant in San Antonio to build the Tundra, they were given some nice tax advantages. It was partly why Toyota came to San Antonio. GM has an existing plant in Arlington. They are having a hard time getting the state of Texas to go along with some sort of deal to help them out.

Typically, you will get tax breaks for bringing jobs, $$, or something else good for the economy to the an area, but you won't get anything to keep the jobs there unless it is very grim.

It is an interesting topic. I know that when Toyota, built a plant in San Antonio to build the Tundra, they were given some nice tax advantages. It was partly why Toyota came to San Antonio. GM has an existing plant in Arlington. They are having a hard time getting the state of Texas to go along with some sort of deal to help them out.

Typically, you will get tax breaks for bringing jobs, $$, or something else good for the economy to the an area, but you won't get anything to keep the jobs there unless it is very grim.

So how would you personally vote if you were asked about providing say $50-million to the GM plant to stay there right now, when you don't even know if they are going to close yet or not? That's your tax money that you would be giving them, money for schools, roads, water systems, etc in your area.

Worse yet, what if GM started eyeballing NC to build a new plant that would house the same equipment and jobs that are in TX right now? They could build a new facility, and fill it with state-of-the art equipment for LESS money than they could strip the old building, remove equipment, and replace it with new. It actually sets off a perpetual game of leap frog in which plants would jump from one state to the next to constantly reap financial rewards. Bad deal IMO. :(

It is an interesting topic. I know that when Toyota, built a plant in San Antonio to build the Tundra, they were given some nice tax advantages. It was partly why Toyota came to San Antonio. GM has an existing plant in Arlington. They are having a hard time getting the state of Texas to go along with some sort of deal to help them out.

Typically, you will get tax breaks for bringing jobs, $$, or something else good for the economy to the an area, but you won't get anything to keep the jobs there unless it is very grim.

This is fairly relevant (from 1992):

Also, the state of Texas teamed up with the city government of Arlington to give GM a tax abatement package of $30 million. No similar incentive plan came from Michigan or Ypsilanti.

By pitting Arlington against Ypsilanti, "GM set up a system whereby it accomplished work-rule changes and received government concessions that it otherwise would not have gotten," Sullivan said.

UAW President Owen Bieber accused GM of playing communities against one another, a charge that Stempel denied.
http://www-tech.mit.edu/V112/N8/gm.08w.html

But what is the difference in giving ANY handout to everyone, versus NO handout to anyone?
Equal is equal, right?

So if North Carolina does not offer Mercedes-Benz an incentive package to locate here, WHO will step in and force Alabama and South Carolina not to offer incentives as well?

See what I mean? I am with you on the equality for all thing, but I think it needs to be the good old way where you simply go where you have the resources you need for your business. Textile and furniture companies all built in NC and SC because we have vast forests with hardwoods galore and local ports to ship goods all over the globe. Car companies and foundries built in PA, OH, and MI because that's where the iron-ore was and the steel was being produced. Tax bases were not ignored, but states weren't throwing multi-millions at potential new businesses like they do today. I think this is real dangerous.

Would ANY other state want to bid against say California or New York to land a plant that will generate $200M in total sales but only $100K in taxable revenue for it's constituants? I sure wouldn't. :no: Deep pockets beget deep pockets.

I hear you and it is dangerous.

Incentives (be they incentives from governments/quasi-government groups or various incentives offered by manufacturers to help sell their vehicles are a bit like taking on an alligator…onece you actually grab him and are on top of him and holding his mouth closed you are in relatively little danger.

The danger comes when you try to let go of him!

I think that’s why getting away from incentives will either be impossible or at least very hard…when/if that happens, it will likely be very painfull.

Consummers expect them.

Companies expect them.

Governments and companies seem willing to porvide them even if they no longer like them.

They are afraid to let go of the alligator. :D

This is fairly relevant (from 1992):


http://www-tech.mit.edu/V112/N8/gm.08w.html

From 1992 to now, I wonder if the state of Texas has received whatthey would consider to be a fair return on their $30-million investment in GM?

You know what $30-million invested in a good returning fund would be worth today?!?!

How do we check and see if that money was "well-spent" at this point in the game? It would be neat to see some empirical data to show that these types of investments are actually worthwhile.

How do we check and see if that money was "well-spent" at this point in the game? It would be neat to see some empirical data to show that these types of investments are actually worthwhile.I agree competely. But that's probably too far into the economics literature than I'm willing to google.

I know that in certain cases these incentives have backfired because the business ends up relocating anyway, so I don't think its unreasonable that citizens demand some sort of commitment for their money at the very least.

There is a huge difference between a company getting incentives to locate/stay in an area versus getting a government-secured loan to pull themselves out of reorg/bankruptcy.
BUT - is that line getting blurred now?


I'm not so sure that such a line existed - both situations represent a governmental body giving favorable treatment to one company (or industry) over another. It's not capitalism; what we have here is a very close relative to socialism in that the free market forces are not allowed to play out.

It's an extremely difficult topic to assess. Over the long term, I think one might find that a uniform tax code that's fair and attractive to all businesses will ultimately result in larger and more stable revenues than picking and choosing members for the "attractive business of the month club". Part of Michigan's problem has been that its tax code was largely written with the Big 3, automotive suppliers, and the pharmaceutical industry in mind. That has left little incentive for other sizes and types of companies to set up shop in Michigan.

I agree competely. But that's probably too far into the economics literature than I'm willing to google.

I know that in certain cases these incentives have backfired because the business ends up relocating anyway, so I don't think its unreasonable that citizens demand some sort of commitment for their money at the very least.

That happened here in my neck of the woods, Canon opend up a printer cartridge recylcing facility, the county paid for the building and gave Canon some tax relief, when the tax relief expired and it came time for Canon to start paying on the building, they shut the operation down and relocated elsewhere leaving the county with an empty building, no taxes and unemployed workers. Smart Canon - stupid county.

That happened here in my neck of the woods, Canon opend up a printer cartridge recylcing facility, the county paid for the building and gave Canon some tax relief, when the tax relief expired and it came time for Canon to start paying on the building, they shut the operation down and relocated elsewhere leaving the county with an empty building, no taxes and unemployed workers. Smart Canon - stupid county.

THIS example is precisely what I fear will become a corporate way of doing business!!!
That is what I meant a few posts ago about companies jumping from state to state for the money.

It is my opinion that Canon should be charged FEDERALLY and forced to repay whatever fiscal losses they forced onto the locality they basically stole from.

Moreover, I think this is the perfect reason why incentives need to be federally legislated as illegal. States - all of them - should be required by federal law to stop offering these incentives because they are undermining our capitalistic system. Eric's explanation above about how this process borders on socialism (governmentally sponsored/financed business) is spot on IMO, and that could be a serious form of cancer that threatens the health of our system overall.

So what politicians have the balls to stand-up and propose such a bill?:rolleyes:

THIS example is precisely what I fear will become a corporate way of doing business!!!
That is what I meant a few posts ago about companies jumping from state to state for the money.

It is my opinion that Canon should be charged FEDERALLY and forced to repay whatever fiscal losses they forced onto the locality they basically stole from.

Moreover, I think this is the perfect reason why incentives need to be federally legislated as illegal. States - all of them - should be required by federal law to stop offering these incentives because they are undermining our capitalistic system. Eric's explanation above about how this process borders on socialism (governmentally sponsored/financed business) is spot on IMO, and that could be a serious form of cancer that threatens the health of our system overall.

So what politicians have the balls to stand-up and propose such a bill?:rolleyes:
Humm...would not a Federal law outlawing other governmental authorities from offering tax/other incentive packages to lure or keep businesses in a particular state or area as being an anti-capitalistic/free-market act, be an anti-capitalistic/free-market act itself? :)

Hang on a sec I need clarification on something.
This 40 or 50 million they are 'getting'
It's not like they are really 'getting' it right?
It's just that in the form of taxes the governement isn't TAKING it.
If thats the case I am fine with that.
If it was in law form I would tie it to saying they had to stay there and maybe to wages they had to pay.

Tax incentives are incredibly common -- you should check, your local burg might even be doing it for the walmart. In a lot of cases it makes simple sense for the local government -- a large number of good paying jobs increases employment tax revenue, or retail sales taxes more than make up for the lack of property taxes.

Othertimes these incentives aren't really hand-outs but loans. The government can borrow money at a much lower rate than a junk bond-status corporation, but of course they are assuming the risk.

Hang on a sec I need clarification on something.
This 40 or 50 million they are 'getting'
It's not like they are really 'getting' it right?
It's just that in the form of taxes the governement isn't TAKING it.
If thats the case I am fine with that.
If it was in law form I would tie it to saying they had to stay there and maybe to wages they had to pay.
From the news article...
"The new law offers cash grants to Goodyear and Bridgestone Firestone for keeping at least 2,000 full-time or contract jobs. The plants could even reduce their work forces up to 20 percent and qualify for funding."

Yup, I'd say they are getting "cash".

There are some legal qualifications, but overall, if ANY company just up and files bankruptcy... who can stop them? It's not like you can levy fines or penalize a company when they are out of business! It's like shooting a dead horse... you're wasting good bullets.

You have also now stumbled onto the issue that irks me about this whole incentive deal. :thumb:

In similar interests, there was just another thread started today in which someone is asking when the next round of incentives is expected from GM on their cars/trucks. This further illustrates to me that people (like companies) will come to expect incentives as a way of life and standard business practice. I think it's wrong and dangerous.

Othertimes these incentives aren't really hand-outs but loans. The government can borrow money at a much lower rate than a junk bond-status corporation, but of course they are assuming the risk.
OMG... if my local county went and borrowed money to give to a for-profit business to stay in my county, after the people voted down a referendum to improve our schools and buy supplies for the kids/teachers, I'd be ready to go shoot someone!:mad:

Don't let me catch some local poitician swapping my kid's education for kick-backs from his crony businessmen. It'll be on like a pot of neckbones!

I agree with you on he sentiment. I see how counties are wanting to maintain the tax base and even grow it, but they should be doing it by providing good locations, infrastructure, educated workers, active business bureaus, and promoting their area as "the place to be", not because they "bought the company a factory" there and bribed the company to stay for a while with cash.:(

So how would you personally vote if you were asked about providing say $50-million to the GM plant to stay there right now, when you don't even know if they are going to close yet or not? That's your tax money that you would be giving them, money for schools, roads, water systems, etc in your area.

Worse yet, what if GM started eyeballing NC to build a new plant that would house the same equipment and jobs that are in TX right now? They could build a new facility, and fill it with state-of-the art equipment for LESS money than they could strip the old building, remove equipment, and replace it with new. It actually sets off a perpetual game of leap frog in which plants would jump from one state to the next to constantly reap financial rewards. Bad deal IMO. :(

I never said I liked it. I specified the way it typically works. Also, they gave GM 30 million in 1992. They gave Toyota lots of money for the plant in San Antonio. I can't find the total figure for Toyota, but this is interesting.

http://www.c-b.com/information%20center/land%20development/ic.asp?tID=17&pID=273

Not only taxes credits. Read the entire article.

This is fairly relevant (from 1992):


http://www-tech.mit.edu/V112/N8/gm.08w.html

They gave tax credits in 1992 to keep the plant open. Like I was saying, it was when situation was grim.

Personally, I don't think it is a good idea, but someone else is going to do it. You almost have to give tax breaks to compete for jobs today.