Double Standard: Critics of Big Three Loan Subsidize Foreign Competitors
Double Standard: Critics of Big Three Loan Subsidize Foreign Competitors
by James Parks, Dec 15, 2008
When Senate Republicans blocked the $14 billion emergency bridge loan needed to keep the nation’s auto industry operating, they knew it could cost between 3 million and 5 million jobs. But some of the most vociferous critics of the auto industry and the UAW reside in states that have given huge no-strings-attached subsidies to foreign auto plants. Some of those states even owe their very survival in part to the Big Three auto companies.
Good Jobs First reports that foreign-owned auto companies operating in the United States have received $3.6 billion in subsidies, mostly from southern “right to work” for less states. That amount doesn’t even count joint ventures with U.S. companies or include inflation, which would make the figures even higher in today’s dollars.
Says Good Jobs First’s Executive Director Greg LeRoy:
As elected officials debate aid for the Big 3, taxpayers have the right to know the full extent of government involvement in America’s auto industry. And while proposed federal aid to the Big 3 would take the form of a loan, the vast majority of subsidies to foreign auto plants were taxpayer gifts such as property and sales tax exemptions, income tax credits, infrastructure aid, land discounts, and training grants.
The largest subsidies include:
$577 million this year for a Volkswagen plant in Chattanooga, Tenn.
$400 million for a Kia plant in West Point, Ga., in 2006.
$300 million for a Toyota plant in Blue Springs, Miss., last year.
$295 million for a Nissan plant in Canton, Miss., in 2000.
You can see the full list of subsidies here. http://clawback.org/
In the height of hypocrisy, one of the biggest critics of the Big Three, Republican Sen. Richard Shelby recently obtained $160 million for the fishing industry nationwide, with a portion of the money headed for his home state of Alabama. The money is not a loan, but a government handout. Shelby states on his website:
This funding will provide much needed assistance to an industry that is a vital part of the Alabama economy.
You can read more on Sen. Shelby here. http://www.watchblog.com/thirdparty/archives/006341.html
But what makes the senators’ opposition even more onerous is that several come from states that depended on the generosity of the Big Three automakers and the UAW in the aftermath of Hurricane Katrina. In a biting commentary in the Detroit Free Press, Tom Walsh reminds two southern Republicans senators, in particular, David Vitter of Louisiana and Shelby, that “when Hurricane Katrina slammed into their states three years ago, the automobile companies of Detroit did not harrumph that the Gulf Coast should have been better prepared.”
The three Detroit auto companies together gave more than $18 million in cash and vehicles to the Katrina relief effort in the ensuing months. No strings attached.
The U.S. Senate’s most adamant naysayers about whether Detroit deserves rescue loans should have thought about that before now.
Could the opinions of these senators be colored by the fact that the foreign-owned plants of Toyota, Honda, Hyundai, Kia, BMW, Nissan and Volkswagen—which compete with the Detroit Three—are located in their states?
Let’s just say that since logic hasn’t worked, we should fall back on a simple moral argument. If you see a fellow American is drowning, gasping for air, do you quiz him for a while about whether he’s drunk or why he never learned to swim better?
Or do you throw him a life buoy and ask questions later?
Well said.