Posted on 07/15/2008 7:52:36 AM PDT by wolf78
Volkswagen announced this morning that it would build a manufacturing plant in Chattanooga, Tenn. where it will build a vehicle specifically for the North American market. The plant will employ 2,000 workers from the tri-state area and is expected to invest $1 billion in the local economy.
The plant is an integral part of Volkswagen's plan for expansion in the N.A. market, with sales expected to crest 800,000 units by 2018. The 1,350-acre site will produce 150,000 vehicles annually – specifically a midsize sedan – in 2011.
(Excerpt) Read more at autoblog.com ...
PA enticed VW to build cars here several decades ago. As soon as the subsidies expired, they skipped town.
Wonder how much ROI the folks in TN will see for their ‘help’ in getting VW to locate in Chattanooga?
ETA: The article does not specify how much ‘help’ they got, just vague stuff:
“Volkswagen of America received an attractive, comprehensive package of incentives for the new facility from Gov. Bredesen’s office and the Tennessee Department of Economic and Community Development. The statutory incentives are tied to job creation and capital investment. Additional support includes assistance for public infrastructure and job training, each designed to ensure the local economy best leverages Volkswagen’s investment to benefit the local work force and ensure the facility’s success.”
This is another reason the Big 3 are getting killed (aside from UAW goons, incompetent management and bad designs) - how do you compete when other states are subsidizing the competition?
I’d be interested to see a breakdown (in terms of cost per vehicle) as to just what these subsidies add up to. I’m betting it’s in the thousands per car range.
This is assuming, of course, that the eco-nuts allow them to build.
Being an hour from Chattanooga in Mid TN, this is welcome news for us still surviving/succeeding in the manufacturing sector.
You must be near Ooltewah ;->
VW would make a fortune if it built and marketed 60+ MPG Rabbit TDIs out of this plant.
You need to go NW instead of NE to find me. hint: The Nursery Capital of the World.
oh, so people won’t have to go very far when their VW’s entire electrical system goes kaput in the first 5000 miles. that’s convenient.
Bugs Bunny: [Disguised as Confederate soldier] Coronel, the Yankees... the Yankees, they're in Chattanooga. Yosemite Sam: Chattanoogee? Charge! [Cut to a stadium, where the Yankees are playing an exhibition game against Chattanooga; Sam has the Yankees held up in their dugout] Yosemite Sam: The first dang Yankee to step out of that dugout gets his head blasted off.
.
Unfortunately YouTube removed this 1953 cartoon called "Southern Fried Rabbit" because they though it racist.
Funny cartoon. Sad ending though... not surprising.
I'm glad someone remembers that.
GM plays the subsidy game with the best of them. In 2003, they got $8 million from Wisconsin to stay in Janesville. GM got the state to write out any employment guarantees. The plant is closing.
And Sony followed suit (in the same plant, no less!)
Of course these tales are long forgotten and the politicians who ‘worked hard’ for such deals (using taxpayer $ as bribes to get companies to relocate) have either retired or moved on to bigger and better swindles.
Governments have no business subsidizing any companies. Permitting states to do piuts them against one another, all to the benefit of foreign firms. Bottom line is more cash-flow out of the country.
You can still see this cartoon on Youtube. I have the old VHS tapes of the banned Looney Tunes, all the war propaganda black and whites, etc.
A thousand years from now Bugs Bunny will still be the best cartoon ever made.
“GM plays the subsidy game with the best of them. In 2003, they got $8 million from Wisconsin to stay in Janesville. GM got the state to write out any employment guarantees. The plant is closing.”
$8 million is a drop in the bucket.
http://www.siteselection.com/ssinsider/incentive/ti9906.htm
“Alabama’s $158 Million for Honda: Initial Embrace
Marks Dramatic Shift from 1993’s Mercedes Tiff
What a huge difference seven years make: That’s the dominant theme thus far in the aftermath of the $158 million incentive package that Alabama put together to land Honda’s $400 million, 1,500-employee plant. Honda (www.honda.com), with a substantial assist from Alabama’s incentives, will build a massive, 1.7-million-sq.-ft. auto production facility on a 1,350-acre tract in Lincoln, a city some 35 miles east of Birmingham.
The upbeat mood that’s greeted the announcement stands in stark contrast to the brouhaha of 1993, when the state provided $253 million in incentives and tax breaks to land the DaimlerChrysler investment in Vance, Ala., some 30 miles west of Birmingham. Though it ultimately yielded the first U.S. Mercedes-Benz plant, which now employs 1,700, that deal landed in hot water only months after it was forged.”
http://www.pbs.org/newshour/bb/business/october96/southern_auto_10-14.html
“The strategy of offering cheap land, cheap labor, and sizeable tax breaks has worked well for the southern and southeastern states, but it is getting expensive. In 1980, landing a new Nissan plant cost Tennessee $11,000 per job created. In 1985, recruiting the Saturn Corporation cost the state $26,000 per job. In 1992, it cost South Carolina more than $68,000 per job to bring in a BMW plant, and the estimates range from $150,000 to $200,000 per job for the Mercedes Benz plant in Alabama.”
I couldn't find it today. Is it still there in full length? I found two short clips.
FWIW, the Vance/Tuscaloosa area is still in relatively good shape financially.
VW wasn’t the healthiest of auto companies in the 1980’s. Are you suggesting Pennsylvania was somehow entitled to the plant, or that VW was obligated to keep it open?
How can that be???? Aren’t we in a depression?
Good old Collierville??
So Michigan takes another one in the shorts. Not that it was a surprise. VW was wise not to locate here — with that recent American Axle strike and our lack of right-to-work status plus the business tax surcharge,companies are running for their lives.
Except for the film industry. They’re getting the fattest tax credits in the nation for making movies here.
The move is a realization that Pennsylvania is a hostile place to do business and Tennessee is not.
Nissan moved headquarters to Tennessee after shuc success with the production plants. Tennessee also has a lot of subcontractors with auto producer customers.
Way off. McMinnville.
And no state income tax....
I’m suggesting that they located here with no intention of ‘commitment to the community’ or all the other horsehockey they spout when announcing such plans (while standing next to proud politicians beaming over giving away taxpayer dollars)
These companies all play one state off against another for the biggest bribe to relocate, then split (or threaten to leave) when the deals run out.
In recent deals, MS has poneyed up $650 million in bribes to get companies to relocate. Sorry, I meant to type incentives. Really I did.
“The plant will be the second automaker to locate in the state. Nissan Motor Corp. opened its assembly plant north of Jackson in 2003. The 4,000-employee plant produced about 278,000 vehicles last year.
Jim Press, president of Toyota North America, said Mississippi is offering the company a $296 million incentive package. That’s less than the $363 million package Mississippi gave Nissan in 2000.”
http://www.cbsnews.com/stories/2007/02/28/ap/business/mainD8NID6BO0.shtml
They are paying out >$100,000 per job created. And you can bet as soon as those deals expire they will be back to the well for more or they will go somewhere else. And you know what? The politicians will give them another deal.
It’s not the company’s fault, they exist to make a profit. It is the lawmakers deception, as this sort of bribery is always a net-negative in the long run. Playing states off against each other bites everyone in the Federal welfare game (we all pay for the unemployed Big 3 auto workers, thanks to a few states paying other companies to come to town).
http://goliath.ecnext.com/coms2/gi_0199-2516804/Toyota-picks-Texas-for-auto.html
Canada also gets sucked into the game to compete:
Ontario Creates $369-Million Incentive Fund for Auto Projects
http://www.siteselection.com/ssinsider/incentive/ti0405.htm
Georgia paid out a ton to land Kia:
States are eager to land the projects from foreign carmakers. Kia is getting one of the biggest packages in memory from state and local officials - $410 million in state and local tax credits and other assistance, which translates to about $160,000 for each job at the plant.
http://www.iht.com/articles/2006/03/14/business/cars.php
Pretty easy to build cheap cars with free (state-paid for) labor.
I get it, but you left me with the impression that you were more upset with VW for taking the best deal it can find, versus the politicians who hand out these deals like candy.
No, the moves are to who will give the biggest bribes.
Although there are limits to just how far they will go, and that says a lot about worker quality.
KIA turned down a $1 Billion dollar offer to locate in Mississippi and instead took Georgia’s $250 million deal.
http://findarticles.com/p/articles/mi_hb6674/is_200603/ai_n26631752
http://www.businessfacilities.com/bf_06_05_cover.php
Oh not at all, if I were running a company I would do exactly what they are doing. It’s the politicians who are really mucking up the works, as it is an enormous game of ‘screw your neighbor’ and it is gutting this country’s industrial base.
This is great news for Tennessee. Business has been very good here.
We’ll I know Chattanooga cleared some land and added a railroad spur and I’m sure corporate taxation will be non-existant. After factoring in a 9.25 sales tax though it’s revenue and employment for the state.
Excuse me...I was thinking Carrier in McMinnville. Carrier in Collierville is the only TN operation now....as a former E. Tennessean I regret the mistake....W.TN doesn’t compare to E. TN by any measure!
I think periodically they get taken down and put back up again.
Besides, I'm wary of any information that comes courtesy of PBS. Good grief.
What really p!sses me off is that Molehern & Co are throwing good money after bad. A lot of our tax dollars are wasted trying to schmooze manufacturers back to the state. There isn't a hope in hell of that succeeding unless we see some meaningful labor reform, which we know will never happen. There isn't a pol in the state whose not in the pocket of labor. Not a single one.
They were originally shooting for the Toyota plant that went to MS. But this is good score for the area.
“Besides, I’m wary of any information that comes courtesy of PBS. Good grief.”
Half a dozen links from other sources weren’t enough?
The particular info I cited was sourced as PBS. Like I stated, I’d like to know how someone came up with those numbers.
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