Republican senators last week were full of statements about how Detroit just had to take whatever free-market medicine came its way. Because that's how things work in Murica, dang it.
Is it? As Mike Lillis explains in a great piece in the Washington Independent, um, not exactly. Check this out:
On Friday, the day following the Senate vote, [Alabama Senator Richard] Shelby told CNBC that if the Big Three had only managed their business operations as well as the foreign companies, known as transplants, they wouldn't be scrambling now for a taxpayer-funded bailout.
"You look at the South," Shelby said. "You take — not just Mercedes in my hometown — but BMW, Honda and all of them. These companies are flourishing with American workers made in America."
But the flourishing of the transplants didn't come without significant taxpayer help. Shelby's Alabama, for example, secured construction of a Mercedes-Benz plant in 1993 by offering $253 million in state and local tax breaks, worker training and land improvement. For Honda, the state's sweetener surrounding a 1999 deal to build a mini-van plant was $158 million in similar perks, adding $90 million in enticements when the company expanded the plant three years later. A 2001 deal with Toyota left the company with $29 million in taxpayer gifts.
Alabama is hardly alone. Corker's Tennessee recently lured Volkswagen to build a manufacturing plant in Chattanooga, offering the German automaker tax breaks, training and land preparation that could total $577 million. In 2005, the state inspired Nissan to relocate its headquarters from southern California by offering $197 million in incentives, including $20 million in utility savings.
In 1992, South Carolina snagged a BMW plant for $150 million in giveaways. In Mississippi in 2003, Nissan was lured with $363 million. In Georgia, a still-under-construction Kia plant received breaks estimated to be $415 million. The list goes on.
The south is the ultimate welfare state and always has been, bleeding resources from the more productive northern and midwestern states that pass through Washington and to the south. The region's political power, always vastly out of proportion to its contributions to the nation, is blissfully shrinking, but as last week showed not quite quickly enough.
