Living in the Guilt

"Groagun" (groagun)
04/13/2015 at 14:36 • Filed to: None

This story is about the automotive industry in the 'Good Old USA' and it's seemingly uneasy relationship within the political power structure and culture of the 21st century.

I come to this blog as I am involved with a company that has been in and is in active negotiations, conversations, with several local municipalities and state governments and has had some Federal communications as well.

I was prompted by the 2nd gear column in the Morning Shift over at Jalopnik: !!!error: Indecipherable SUB-paragraph formatting!!!

!!! UNKNOWN CONTENT TYPE !!!

It's about the current decision process going on at FCA about Jeep and it's Toledo production facility and how Sergio Marchionne is publicly stating that the plant may be closed and moved elsewhere because he doesn't like the supplier base, on site, sharing in the profits.

He wants to bring all profits in house and wants to have FCA be the supplier and those profits are then recorded as FCA profits in total. This is all to meet his 5 year plan and profitability projections.

All of the recent moves made by FCA, including turning the company into FCA is too meet those goals. Remember the Ferrari IPO? That too was proposed and will move forward in order to meet those goals.

I think much of this is overly ambitious and squarely foolish. His ego proceeds him and I fear for the lowly line worker in any FCA facility that Marchionne's decisions will eventually cost them their jobs just to prove he's right.

I digress however, this is not about FCA or Jeep directly. Nor is this about my distrust and complete skepticism about Sergio Marchionne. No this is about the current means in which you 'have' to do business in the modern American landscape.

Here is a simple road map to how it works:

First you meet the middle man, the negotiator. The one who introduces you to the power player(s) and helps craft the "deal".

This guy:

On to the power player(s):

The guy who calls the shots and has access to everyone and everything. This includes the regulatory heads right down to the guy who will sweep the floors and most importantly, he controls the money!

This guy:

Then and hopefully not, you may meet the clean up and enforcer guy. The guy who makes sure you grease the wheels, pay the piper and leave your pound of flesh. He's there to provide the 'muscle' for the power player. You do not want to meet this guy!

This would be him:

Now this all sounds very small politics and corrupt local and municipal government business but believe me it exists in the smallest and darkest little corners of America right up to the bright and wide open spaces of places like NY, LA, Chicago and any other big city, state or Federal Department you can think of.

From our experience we have run into a very recent, or at least it feels recent, phenomenon of 'job transfer' politics. What does this mean? It means that states in particular are more interested in stealing jobs and facilities of existing companies from other states.

Why did Toyota move from CA to TX? It did so because the state of TX provided land and tax incentives that CA could not or would not equal or exceed. Basically Toyota did not pay for any land and will not pay taxes for the next 10-25 years.

Sounds like a great deal right? Until you see and understand what that means for TX and CA residents and the USA as a whole.

In black and white I will give you the short answer: it means no new job creation at all, just a transfer of jobs from one place to another. Federal incentive monies are used, your tax dollars from income tax, to 'grease' the wheels of these job transfer programs under the guise of being job creation programs. This is marketing Bull Shit at it's best.

One of the real ethical questions I have been asking myself during this whole process is this: If we are being told and presented the offer of not paying state taxes, of any kind, for a decade or more, who will make up the difference?

Well it's very clear, you will, Mr and Mrs average income earner. Our company will use the resources and services that everyone enjoys and has payed for but we will not have to contribute. And all because we are 'job creators' not "Takers".

Having said that, should there be a grace period for new start up business so they can get up off the ground easier or better? I think so but does Toyota deserve or need such a grace period. Absolutely not!

Which leads us right back around to FCA, Jeep, Toledo OH and Sergio Marchionne. All he is trying to do is get a new deal out of OH and the city of Toledo so he doesn't have to pay taxes for the next 10-25 years. He knows just how desperate cities like Toledo and the rest of the country are to have jobs, good paying jobs so people can live, raise a family and share in that American Dream.

From where I sit and what I see, I don't know what to do. It makes me uneasy at best about the ways in which the 'game' is played now and how it's structured on what and who you can take advantage of. I know who it will cost, how much and for how long, but it doesn't seem to matter. I don't know what to do and in order to live the life and dream I have these are the rules and game in which I must play.

This story has so many more aspects to it that I could write a literal book on the journey so far but I will save that for my retirement or death, which ever comes first, in the meantime I will pay my taxes.

DISCUSSION (79)

ACESandEIGHTS > Groagun
04/13/2015 at 14:39

Prop Joe, Clay Davis, Omar all featured in a story about VW or something. Going to have to read this, but suspect it will have little to do with The Wire.

Groagun > ACESandEIGHTS
04/13/2015 at 14:42

Well I'm glad I have a fellow 'Wire' fan and OPPOnuaght with me. No VW though, you'll see.

BrtStlnd > Groagun
04/13/2015 at 14:46

Sergio is going to fight for his corners.

For Sweden > BrtStlnd
04/13/2015 at 15:42

Jeeps do have lots of corners.

Klaus Schmoll > Groagun
04/13/2015 at 15:52

Nice to meet another The Wire fan! Aaaaaand just like all fanbois I have to start nitpicking. Omar is far from an enforcer for the Coop or the Barksdales.

Groagun > Klaus Schmoll
04/13/2015 at 15:56

I thought about Wee-Bey but not enough people would have recognized him and he didn't have the inward political strife and burden Omar had.

drdude > For Sweden
04/13/2015 at 16:03

My Jeep doesnt "do" corners.

BrtStlnd > Klaus Schmoll
04/13/2015 at 16:05

The Chair recognizes Slim Charles...

Dr_Watson > Groagun
04/13/2015 at 16:05

Had the same complaint. I would have gone with Wood Harris. Avon was the enforcer, Stringer was the business. Omar was a free agent.

Groagun > Dr_Watson
04/13/2015 at 16:17

Totally disagree on Avon but I also thought about Brother Mouzone, Michael Potts.

Equana > Groagun
04/13/2015 at 16:26

If the locality in which your business is located is heavily taxing your business and another location offers you no taxes and free rent to move PLUS lower taxes in the long run, why wouldn't you move? That is freedom, mu good man. Your current location had the option to bid against the new location, it had the option to be efficient with the use of your company's tax dollars but did neither. The new location had a gain in jobs, the old a loss. The country netted zero, as you correctly describe. The same situation is playing out in the states with low or no state income taxes taking residents from the high tax states. Freedom can mean the freedom to move where less is taken.

450X_FTW > Groagun
04/13/2015 at 16:29

Comments about Toyota are spot on. I have family that work at Toyota in CA. Company is paying for them to move to Texas. Only "new jobs" that will be created are the ones building the facilities, and the replacements for the ones who say "no" to the location change.

GreenN_Gold > Groagun
04/13/2015 at 16:40

You're looking at it from a national perspective, while Texas is looking at from the State's perspective. I'm not saying you're wrong, and they're right, but merely pointing out the different perspectives. This very much so is a job creation event for the State of Texas, and that's all Texas (or any State) cares about, expectedly so.

Megamullin > Groagun
04/13/2015 at 16:57

First, Groagun, this article is awesome. Thanks for putting this out there. Also I definitely agree with you that this won't create any new jobs.

However, it's not just states that are competing for these jobs: other countries are competing, too. So while I agree that tax incentives in other states doesn't create any new jobs in America, it also means we're not losing these jobs to other competing countries. Mexico is chomping at the bit for this work and has cheaper labor. (You could argue Toyota would pay import tax when building in Mexico, but I believe-though do not know-that NAFTA reduces the import tax on cars from Mexico).

So while its true that we don't have any more new jobs to show for our tax dollars, we're also not losing jobs to other countries. In my mind, that makes the decision to spend tax dollars to make the move happen a much closer call. I'm not sophisticated enough to know whether its economically beneficial or not.

Also it's only certain types of taxes that are getting lost here, like real estate taxes. Is it true, that Toyota is paying ZERO tax? Maybe that's true, but I doubt it. In all likelihood, they're still paying payroll taxes, social security, medicare, etc.

But even if they were paying zero taxes, its not as bad as you make it out to be. Imagine, for instance if Mexico had gotten all those jobs. Now we'd be out Toyota's taxes, but also the taxes that every single one of their employees pay.

In short, even though the move and tax losses are a blow that isn't ideal, it prevents these jobs from going out of the country, and I see that as a win. Even if the win costs us more than it used to.

Xan1765 > Groagun
04/13/2015 at 17:05

It would require some pretty dodgy math to come up with your conclusion on the tax front. You don't get to say that a company coming into a state that gets a tax break for doing so "costs money". If Toyota hadn't moved, Texas would have gotten the exact same tax revenue of $0.

Also, the way federalism works, this national strategy bullshit is nil as well. You're saying it's bad that state competition lowers people tax burdens and makes things cheaper? Now, for the price of some unused land, Texas just grabbed thousands of jobs, and will eventually reap tax revenue from the move. Yea, sucks for California, but if you get beat by a better team in sports, should you call foul because they're better?

Finally, and this is going to be tough for liberals, there is an alternative to replacing taxes..... Cutting spending.

Dr_Watson > Groagun
04/13/2015 at 17:07

Yeah, that would have been a better fit. Though you could have stayed east side and used Cheese. Though, I suppose Chris and Snoop were the prime enforcers. But that reminds people of the terrible serial killer plot ribbon, which most probably wish to forget.

AMGWTFBBQ > GreenN_Gold
04/13/2015 at 17:41

Exactly.

"who will make up the difference?"

How about all the tax revenue from those new workers/jobs.

Frankenbike666 > Groagun
04/13/2015 at 17:50

This goes on in the auto industry, and every other industry, as you imply.

The federal government should put an end to state subsidies designed to remove existing businesses from one state, and move it to another. It does nothing but hurt both states.

In the case of Toyota, I'll give the decision this: even without the incentives, Texas is a better location for them. Shipping costs are a huge part of the automotive equation, and a more centrally located distribution center makes a lot of sense for that reason.

Those taxpayer funded subsidies are great for businesses. But there isn't a state I can think of that aggressively pursues that strategy, that isn't being driven into the ground. 2012-2013, the Texas state deficit was $27 billion.

Frankenbike666 > 450X_FTW
04/13/2015 at 17:55

Which will largely be the people who can't find another job in California. The only thing that is attractive about Texas to a Californian is the lower home prices. And Austin (though lower rents figure there too). And people not in top priced restaurants who serve steak. And the entertainment value of real weather, including special effects laden thunderstorms on an almost daily basis during the summer.

desertdog5051 > Groagun
04/13/2015 at 18:08

The states have themselves to blame for this. (actually, it is the politicians). They started offering incentives many years ago and it has turned into a 3 ring circus of states and municipalities and politicians trying to one-up each other.

As a large business, these companies know they can leverage their financial weight/impact to acquire the best deal. Nothing wrong with that. It is pure Capitalism.

The problem comes when there is no cost to the company involved and it is an expense to the taxpayers who subsidize the benefits the company receives.

Where I live, Intel leveraged a great deal for themselves. They agreed to build a high school and were given a many, many years of relief from taxes. Just one year of taxes would have built several high schools. Would they have built there without the incentives? Probably not.

But the writing is on the wall for said plant. It looks like they are going to shutter it in the next few years. No new investment has taken place for quite a few years and nothing is planned. In the semi-conductor industry, that spells doom. What will be left? A half mile long manufacturing plant that nobody else will want and after it starts to decay, the citizens/taxpayers of the state will be left with the massive cost of cleaning up the site.

Arch > Groagun
04/13/2015 at 18:14

It's less expensive for Toyota to do business here in Texas, its employees will enjoy a friendlier cost of living, water flows from the tap when you open it, etc, etc. For its part, Texas gains economically. It's just business. If CA wants to prevent such moves in the future, CA needs to figure out how to compete.

blown032k > Groagun
04/13/2015 at 18:17

Omar as muscle for the big guys? Oh no sir, no indeed.

General Purpose > GreenN_Gold
04/13/2015 at 18:49

The national perspective is arguable, in my opinion. Competition among the states is a good thing.

Californians once wanted to be #1 economically, and they did everything they could to get there. They doggedly pursued it without giving a damn how many traditional industries they destroyed. There was a time decades ago (during and after WWII) when California was among the most business-friendly states, and all companies of suitable size made things there.

People at the time claimed California was ruining the nation when they put a lot of Midwestern/New England workers out of business. Of course, that's a load of bollocks to hear nowadays.

Now Texas wants to be #1, and they're going to do what it takes to get there. Really not at all different. California doesn't even have to lose in this scenario, they just have to adapt.

Here in Texas, even liberals (they do exist, I am among them) are happy that Toyota is moving here. Yes, the state loses tax revenue from the company's operations for a long time, which is kind of shitty. But it is sort of an investment in the future. Ultimately Toyota will pay taxes to the state of Texas. The people of Texas love to buy things made in Texas (the Tundra is advertised pretty heavily on being built in San Antonio), and if they continue to buy Toyotas in equal or greater measure, then more of that money remains in the state.

Moreover, the state does gain tax revenue from the company's newly-immigrated employees, who will have decent-paying jobs. The Californians who don't want to move to Texas will be replaced with Texans, giving at least some of the jobs to locals.

Groagun > Xan1765
04/13/2015 at 19:54

Xan1765 I'm sure I can't change your mind on any of this but let me try by highlighting your comments.

"It would require some pretty dodgy math to come up with your conclusion on the tax front. You don't get to say that a company coming into a state that gets a tax break for doing so "costs money". If Toyota hadn't moved, Texas would have gotten the exact same tax revenue of $0".

It shouldn't take a math major to see that activity, in this case Toyota doing business in the state of TX, where it currently hasn't been doing any business would create economic activity and use the services and resources of TX and the local community it is in. In these deals, companies like Toyota do not have to pay for using the services and resources. That is not a $0. net sum.

Where TX and any other state makes that up is from state income tax or other forms of consumer burden taxes that make up the difference. You and I pay for Toyota to be there.

"Also, the way federalism works, this national strategy bullshit is nil as well. You're saying it's bad that state competition lowers people tax burdens and makes things cheaper? Now, for the price of some unused land, Texas just grabbed thousands of jobs, and will eventually reap tax revenue from the move. Yea, sucks for California, but if you get beat by a better team in sports, should you call foul because they're better? "

The sports analogy is just plain dumb and you know it. If you believe that this conversation can be boiled down to the Raiders vs the Cowboys then I'm afraid you are not smart enough to participate in this debate.

I don't think you're stupid nor do I believe you think this can be made simple and sports analogies are the de facto 'go to' for serious subjects with complicated answers. Yes Toyota did get land that was not prime and I'm not really worried about the real estate portion of this problem. Everything in TX is huge, including large swaths of land that no one wants or uses.

Also, it just doesn't suck for CA. Your federal tax dollars go to those who may be on income assistance now that their jobs are gone. Can you also explain to me how you or I will ever see the benefit of lower costs to Toyota? I guarantee you that not one penny of savings will be realized by either of us in any of these deals.

"Finally, and this is going to be tough for liberals, there is an alternative to replacing taxes..... Cutting spending ."

First and foremost, never assume anything about anyone who you do not know. I am neither a liberal or conservative, Democrat or Republican. I am Independent! I hold certain liberal values and certain conservative values. I, like many, pick and choose what I want, when and for the reasons I find best.

You clearly have been drinking the modern conservative Kool-Aid and clearly like the taste. It is the modern conservative who believes all is simple and that cutting spending is the equal answer to cutting taxes. This is just nonsense. It looks simple and great on paper but in reality does not work!

I am with you on controlled spending and fiscal responsibility but this is not anything about that. TX is by far the most conservative or conservative states and yet if you look at their budgets and deficits, you would be shocked. It certainly is not run by any conservative budgetary methods and math I keep hearing about. I point you to this Pew Charitable Trusts site that has tones of information on state by state budgets and fiscal reports.

http://www.pewtrusts.org/en/multimedia/…

Clearly TX is doing somethings right and other things, not so much. One of the eye opening charts shows the percentage of state budget contribution provided by federal dollars. It's a bit high for a 'Conservative" state don't you think? Especially for the 'Lone Star' where people clearly don't want the feds in their business. I guess they'll just gladly take the money though.

On paper and in your idealism everything is great and all live happily ever after. Problem is, in real life, it just isn't true and it's way more complicated and intricate.

Groagun > Arch
04/13/2015 at 19:56

I hear this over and over but I never get the answer as to how they should change to compete. What do you say, what's your plan?

Arch > Groagun
04/13/2015 at 20:13

What's my plan for California? Well, I'm not planning to ever live there!

Groagun > Megamullin
04/13/2015 at 20:13

Well put but, the US is losing industry and jobs to Mexico. We have had zero success in finding funding, both private and government in the US. We have had hundreds of meetings and dozens of "no thank you's", "not at this time" answers.

Our technology has had several years of development and $10's of millions of dollars spent in prototyping and we and it are ready to go to market. It's a risk no doubt but as I was taught in school, Americans are the ones to take the risk and the reward. What a load of shit that has turned out to be.

You know who has come to the table, Mexico, India and even old Europe. We hope to get off the ground this year but chances are, about %99, that we will not end up in America anywhere.

Not because it isn't as profitable or we don't love it, it just isn't willing to come to the table. The other thing against America right now, the investment community wants nothing to do with America. That's the investment community here in the USA and abroad.

There are serious and complicated questions to tackle and much hard work has to be done to right the ship. Part of that battle has to do with culture and the idea of 'greatness' of the past and the unwilling to work in the present. I'm not talking about 'welfare' or any such nonsense. I'm talking about the idea of civic and national responsibility. Not a Tea Party platform but it seemed to have work well for America when it worked like that.

Groagun > Arch
04/13/2015 at 20:18

Arch that's a cop out. Basically your saying to your fellow Americans, FU, I don't care if you live or die, starve or feast.

Yes these are big questions that demand big thought out answers. If your not willing to do so now or ever, then why should I care anymore about what you say as you seem to about your fellow Americans in the great state of CA.

Maxaxle > Groagun
04/13/2015 at 22:01

Kinja'd!!!

You can tell he means business because he went to the trouble of polishing his shotgun before coming to meet you.

Deal Killer - Powered by Focus > Groagun
04/13/2015 at 22:12

Well, since I'm done with work and household duties, I can take time to reply to your post from this afternoon. As a lifelong south Toledo resident (09 & 14), I cannot abide the profligate spending of city dollars in order to keep Jeep & FCA happy. I understand the reasons for doing so, I just do not support them. One of the local morning DJ's here in Toledo (Talking to you, Denny!) is talking about actually building FCA a new plant to build the Wrangler in. What a bunch of complete horse shit. The only way I'd support that idea, is if Toledo tax payers get a cut of the profits from Jeep. Yeah, that'll happen, Comrade. I would be surprised if FCA/Jeep moves production of the Wrangler out of Toledo, and flabbergasted if they did not move some other automotive line in to keep the facility running. I'd love to see the new Renegade made in Toledo, as I think it will be a major seller in the US. Maybe if FCA moved their Wrangler production out, they wouldn't have Toledo over a barrel ever single fucking time they need to upgrade their facilities. I don't remember GM threatening to close the power train plant unless the city forked over a few million $$$'s, but then my memory isn't what it used to be. Oh, well. We will see what the Great Serge has in store for the Glass City come this June.

Groagun > Deal Killer - Powered by Focus
04/13/2015 at 22:22

I think you echo the sentiments of many. I've had one or two people assume I'm some red commie liberal who wants all and everything unionized but I'm curious as to whether or not just an average 'Joe' as yourself, thinks that the free enterprise system has gone way off the tracks and it is now, not just acceptable but the only way to do business, by holding tax payers of any jurisdiction hostage and demand public money for cases just like Toledo and Jeep?

I sound a bit like a Tea Bagger but there is some truth in which they speak and we do share some values and ideas.

Here's maybe a dream presidential ticket for 2016: Rand Paul and Elizabeth Warren or Warren and Paul?

Ilbrutto13 > Groagun
04/13/2015 at 22:52

I am right with you. Unfortunately there needs to be a massive culture change in America. Things in the digital culture have created digital thought in actual life. People have boiled down complex issues to simple black and white issues. Capitalism has warped itself into a government subsidized money vacuum. Business contracted and sub contracted ad infinitum. Litigation fears so high that doing nothing is preferable to doing something. Entitled attitudes cause people who care about problems only insofar as they don't have to face them. It's going to take something big for us to snap out of this or it'll happen with pitchforks and torches.

tripzpedalz > Groagun
04/13/2015 at 23:01

Kinja'd!!!

You best be droppin' those Honey Nut Cheerios...

Jimmy Joe Meeker > Groagun
04/13/2015 at 23:26

This is crony capitalism. It's just how things are done. How the game is played. We just aren't supposed to talk about it as I've found out.

Taxes and expenses are paid by chumps and the people who don't have the means to defend themselves. Big corporations can play the game so you and I pay their expenses, pay for the land for their facilities, pay the costs to run their facilities.

I blame the professional sports fans for making this acceptable. I am sure it happened before stadium deals but it was the stadium deals that made this sort of thing mainstream. Now it's accepted. Even to the point where those critical of it are chastised. As I've been here in different threads.

BurnKinjaBURN > ACESandEIGHTS
04/13/2015 at 23:44

I thought it was well used to make his point..

Arch > Groagun
04/13/2015 at 23:55

It's not a cop out. It's an opt out. Of CA's polinomics, that is.

nramos33 > Frankenbike666
04/14/2015 at 00:37

You forgot to add zero state income tax

Mark > Groagun
04/14/2015 at 01:39

Hey Groagun,

I live in California and own a company of 25 employees. Here's what I hate about Tesla and Toyota and any major league sports team but especially the NFL:

They pander to small cities like Cleveland and cincy, and inglewood and Carson, and Oakland and San Diego and rape them for tax credits just for jobs that we as employees have to pay for thru income taxes. (Your point above.) they then provide slave minimum wage concession jobs in return.

Here's what a fair and equitable US is, everyone including Apple and NFL and Toyota and Nissan FCA and Tesla all pay taxes! We wouldn't have the infrastructure problems we do have. But most companies are domiciled in Ireland and Sweden, and Rhode Island so they don't have to contribute. Nfl teams rape tax payer bases for free rides.

I respect unions in the auto industry and coal mines where it used to be a dangerous job. I hate all government unions and think all of the above including most city county and state and federal unionized employees are blood suckers sucking on the tit of America. (I think first responders are exempt from my diatribe since they give their lives for others.)

The greatness of America is our business creation and technology mind center, but our Achilles heel is the raping of the average American by most companies including McDonald's Walmart Wendy's Burger King etc that pays slave wages and then wants the government to subsidize healthcare and food and housing for the slaves.

Groagun > Mark
04/14/2015 at 02:13

well I'm not sure your take on government unionized workers is fully thought out but I can understand why you think that way. There have been many examples of strikes and 'job actions' taken by those unions and workers who sometimes we feel have it pretty good as is and shouldn't complain. Sometimes that's warranted and sometimes not.

As for the idea that everyone, and I mean everyone should pay taxes I couldn't agree more. I'm no fan of Ted Cruze, I think he's a shyster of the highest magnitude, but the idea of a flat tax is something I think should be tried. I'm not sure it can be implemented across the board and shouldn't have slightly different rates for slightly different circumstances and or time sensitive measures, but I would like to see it tried.

I'm with you on the holding of hostages by uber wealthy corporations that really don't pay the toll at the end of the day and hiding in foreign lands. That must stop!

ZeeeeCar > Megamullin
04/14/2015 at 04:17

Social Security and Medicare taxes don't build or maintain infrastructure. :-\

gmporschenut also a fan of hondas > Groagun
04/14/2015 at 07:41

http://thedailyshow.cc.com/guests/tds-gue… i like the comment "oh so it's perfectly fine for a company in Texas to move to India"

Josephum > BrtStlnd
04/14/2015 at 08:06

if it's a lie, we fight on that lie.

Howie > Jimmy Joe Meeker
04/14/2015 at 08:28

Indeed, it must be nice to hold a city hostage and demand tribute from the locals.

Jason Channell > Groagun
04/14/2015 at 08:45

Kinja'd!!!

Sheeeeet!

Jason Channell > Groagun
04/14/2015 at 08:45

Kinja'd!!!

It's all in the game yo!

pierce is a b > Arch
04/14/2015 at 09:44

If I were a gay Toyota employee, there's no way in HELL I'd go to Texas. Or if I had kids I wanted educated in a school that taught evolution, not creationism. Or if I had a daughter or wife or girlfriend that might need to get an abortion

No, thanks.

Megamullin > Groagun
04/14/2015 at 09:49

Correct me if I'm mistaken, but I thought the point of you article is that the States shouldn't be giving these tax breaks because it screws the average consumer? My comment is merely a counterpoint that, yes, we lose some tax dollars, but that's not as bad as losing the jobs to go out of country? Is that right, or did I miss the point of your article.

Your counter-comment here seems to agree with me entirely, but completely disagree with your article. Is this a quote from someone? Is it meant as satire? Are you an officer/manager of a large auto manufacturer? This sentence seemed to imply so...

Our technology has had several years of development and $10's of millions of dollars spent in prototyping and we and it are ready to go to market.

Regardless of who you are, I'm wondering what your take is. Should the states be "coming to the table" to offer tax breaks or not?

My take is, I don't like it, but I'll plug my nose and say yes: giving tax breaks is a better alternative to losing jobs to competing countries. As I see it, we're better off losing some taxes via tax breaks than we are at losing all taxes via losing the plant to Mexico/old Europe/Asia. What's your take?

Megamullin > ZeeeeCar
04/14/2015 at 09:51

Agreed, and that sucks. On the other hand, they do help the sick, disabled, and elderly. Which is better than not having them at all.

Megamullin > Xan1765
04/14/2015 at 09:54

I cannot agree more with what you just said. I don't like it any more than Groagun, but having some tax is better than having no tax.

toddycc > Groagun
04/14/2015 at 10:00

great article but why is e-40 here?

Converse > Groagun
04/14/2015 at 10:05

It seems that the "tax incentives" help bring jobs to different states. I agree that these are merely transfers on a national level, but when you have states failing all on their own, it may not be so bad after-all.

When the plant in South Georgia (I think Griffin, can't remember) was closed, it left a vacuum in the town. Main street disappeared and unemployment in the area was quite high. Georgia got KIA to take over the plant and now the city is thriving. They have some of the best schools in Georgia (that now offer Korean as a second language, go figure) and the support businesses of a society are coming back to the area.

Did it help the national job market? Maybe, maybe not. Did it help a struggling economy in a once booming town? Yes. Absolutely yes.

Is Marchionne playing games? Yes he is and that's his prerogative just as it was when Porsche turned down government funds to build a factory in the depressed town of Liepzig. At the moment, FCA has to do what they need to do to stay healthy and strive, that's the reason for a business. Toledo has to deal with that and see how they can stay competitive. If they don't, it may indeed hurt their city.

RdBme > General Purpose
04/14/2015 at 10:51

What if Toyota just packs up and heads for Tennessee or Ohio just before that tax bill comes due?

Groagun > Converse
04/14/2015 at 11:43

The problem with the Kia argument is that the plant in GA was the first for Kia and it was a net increase in jobs for both the state and the country. Twenty years from now w may be having this argument as Kia may decide to move out of state to somewhere else because it's cheaper or more cost effective to do so: what then?

Most importantly though, why are so many states " failing all on their own "? Both red and blue alike?

Groagun > toddycc
04/14/2015 at 11:45

Converse > Groagun
04/14/2015 at 12:07

The reason they are failing on their own is more widespread than just a transfer of jobs in or out of a state and vary based upon location. But, my point for that was to point out that states are having their own financial problems that are related to the economic crisis as a whole and specifically in areas that relate to them instead of as a part of the whole nation.

I agree that KIA's plant was different as it was a new investment into the US. But, it more or less replaced the manufacturer that abandoned it. If Georgia had not created incentives for KIA they very well may have gone to a state that does.

For example, Mercedes is moving from New Jersey to Georgia they claim based on the main reason of taxes being too high in New Jersey. They have been there for a long time, so why now? I am not sure. Is it the only reason? Not at all. They should be able to save in wages over time because the cost of living is much lower here, so when they higher new people, they may not need to pay as much as they would if they were still based in New Jersey. 4

However, these companies are not happy for whatever reason and I don't disagree that the taxpayers will be burdened to cover the lack of tax revenue from the company as a whole. But, think about GE or Apple. They have been in the public eye for paying very low taxes in relation to their sales based upon their strategies. So, is California any more hurt by Apple not paying much in taxes as Ohio will be for creating tax incentives for FCA to stay?

I really don't know the answers and I enjoy the conversation. I definitely am not using all of this to say you're wrong and I'm right because I don't know what the right answer will be.

Groagun > Megamullin
04/14/2015 at 12:13

I apologize for the confusion. I see 'tax breaks' as a separate and silo-ed issue from investment dollars and what I term 'temporary tax breaks for start ups with time limits'. I'm not opposed to tax breaks but from my experience, these so called 'tax breaks' aren't just breaks: they are legal authority and contract clad agreements to not pay tax at all. Now most have time limits but eventually convert to reduced rate levels for a 99 year period.

Yes we are arguing the same point and I do understand fully your issue with foreign transfer or operation. Losing the work place and jobs to Mexico or where ever is worse than 'tax breaks' as long as the facility operates and employs people within the USA.

Understand that in order for 'tax breaks' to compete with the level of expense it takes to operate a facility in Mexico vs the USA just simply doesn't cut it. Know that what you are asking is for Americans to lower their life styles and expectations for what a standard of living condition is, in the US.

Essentially what is happening is that corporations are forcing Americans to compete with 2nd and 3rd world countries and economies. In order for America to do that it must lower it's standard of living. 'Tax brakes' are just the icing on top of a big turd cake.

Really the bottom line is this: corporations have for a long time now built the culture to believe that they, now as legal entities, are the most important 'beings' in the society. Without them we would not survive.

All I am really asking for is a fair and open playing field. Let's stop falling for the marketing BS of corporations and put people back at the center of the equation. It's far easier said than done I'm fully aware but look around you: record profits and unbelievable amounts of literal cash in savings just sitting there, mostly accumulated through tax breaks btw.

The system is rigged and we all know it and we are powerless to do anything about it or we're just to old or tired or distracted or whatever else you can think of to explain why we don't do anything about it.

Groagun > gmporschenut also a fan of hondas
04/14/2015 at 12:25

It's both really funny and poignantly true right now not just for America but for TX as well.

Groagun > Converse
04/14/2015 at 12:28

Well put and honest. I/we appreciate your thoughts.

Kart22racer > desertdog5051
04/14/2015 at 13:10

It sounds to me like you might be from Rio Rancho. It's a damn shame about the Intel site, I suppose it just remains to be seen what that means to the residents of Rio Rancho as the economic value of the plant and it's workers is lost.

desertdog5051 > Kart22racer
04/14/2015 at 13:43

Yep, RR. It will hurt and it will hurt ABQ as well. Have to wait and see, I guess.

Converse > Groagun
04/14/2015 at 13:49

Open and honest communication and conversation really is the only way forward. When people dig in their heels and decide there is no other valid opinion, progress is lost. I think if things were more open, honest and equitable from the beginning, people would have fewer disagreements and we can move forward. I also believe that is true if VW would make a brown, manual, AWD, diesel shooting-break as well!

Megamullin > Groagun
04/14/2015 at 14:19

!!! UNKNOWN CONTENT TYPE !!!

I see your point about putting people front and center, but at the same time, you're now bringing in a whole separate issue-wages and benefits-into the equation. That is a separate issue, but I'm happy to address it.

Yes, corporations compete with third-world countries. They didn't cause the competition. The competition is caused by the 2nd and 3rd world countries. The corporations are merely making a rational economic decision. The people you want to blame appear to be the 2nd and 3rd world countries, not the corporations. Your position seems to be that you want the corporations to pay more in America for what they could get cheaper in Mexico because....why, exactly? Because America/you are special? Because we deserve it?

What is wrong with a state or municipality sweetening the pot to keep manufacturing jobs in the U.S.? Isn't that better than just saying goodbye to the jobs? Wouldn't any American rather be employed than unemployed? By the way, just because they get a tax break doesn't mean they're entitled to lower pay of workers or slash benefits.

I disagree here. They're not trying to tell you anything. They're merely taking their business where they can get the most bang for their buck. Just like I use coupons, or shop at a store that sells the same product for less money. If they are saying something, it's that Without this Corporation, you won't have X number of jobs.

All I am really asking for is a fair and open playing field. Let's stop falling for the marketing BS of corporations and put people back at the center of the equation.

I would like it too, if we didn't have to compete in with 2nd or 3rd world countries for jobs. I would also like every sad child in the world to get a flower. Neither is going to happen.

Also, I see no point in lashing out at a corporation or local government for making these deals. Frankly, I'm glad there are people out there willing to look rationally at the situation and make the best deal they can, even if that deal isn't as sweet as it used to be.

If we really wanted to "fight back" against manufacturing jobs moving overseas, our time would be better spent encouraging people to buy exclusively American products.

Now most have time limits but eventually convert to reduced rate levels for a 99 year period.

I have never seen a tax break work that way. Can you show me one? Two?

Let's stop falling for the marketing BS of corporations and put people back at the center of the equation.

What if the way to put people back at the center of the equation was to give them a decent job here in America rather than standing by while they all go overseas? That's my real question. This language about how "the system is rigged and we all know it" does nothing to advance anyone's interest. If the system is rigged, and we want to put people back at the center of the equation, then maybe what we have to do is play the game so the people get the benefit: i.e. give a corporation a tax break so that people can get/keep a job? Maybe I'm wrong, but I have yet to hear a compelling argument to the contrary.

BTW, there's no shame if you didn't see the foreign market angle when you wrote your piece. There is shame in continuing to support a flawed premise after someone politely shows you another angle to approach it. Instead, maybe you could write a counter-point piece about why it might not be such a bad thing to give a tax break and save thousands of jobs?

Megamullin > Converse
04/14/2015 at 14:20

EXACTLY! You're spot on.

gmporschenut also a fan of hondas > Groagun
04/14/2015 at 17:50

toonies553 > Groagun
04/14/2015 at 18:52

shiiiiiit you're looking at it too closely. Here are some alternate views.

€) Italians and Americans will have lower costs. Text books will say that this will translate into lower prices but i say it translates into higher profits to the share holders. Who then spend that money on more cheeseburgers and create more jobs.

£) CA and TX are both in USA. The net change of fca jobs would probably be evens.

¥) free market shiiiit says that places will compete to fleece you for bullshit tax (which should have been decreasing, but governments only get bigger ). So they attract more business. This is what they (TX) are doing. They offer incentive to 1 guy in the hope that it will lead to more tax from 1000s other people.

) Sergio is a product of the free market. Asshole share holders will only hire a ceo that will do the most pillaging. If sergio gives them the best presentation slides with the most pillage, he will get the job. What was the name of that other ceo that acted in the interest of the common citizen and employee? Oh it doesn't exist. Shiiiiiit.

Groagun > Megamullin
04/14/2015 at 19:54

First, I didn't even get into the income and benefit part of the equation so I'm not going down that rabbit hole now. Too big, complicated and specific for me to address here.

Second, I most certainly am not blaming any 2nd or 3rd world economy or it's people for this problem: they just want to be like America and Americans. They want to enjoy the same standard of living, level of freedoms and the certainty and security of knowing that they live in the best country possible with all of the freedoms and benefits of such a country.

Third, there is nothing wrong with sweetening the pot. This is not what is going on. I thought I was pretty clear about that. And again I said nothing about entitlement to lower payed and benefited workers, related but separate issue.

Fourth, and this is where you start to lose me, I'm referring to the now constitutional right and recognition as corporations as people. Most notably referred to as the Citizens United case in the supreme court. This particular case has more to do with political campaigns and contributions when it's mentioned but it is the basis for the activities of corporations that I find disturbing and unethical.

Five, I take it that you have settled for the current state of affairs and operations of the modern American corporation and that you are just fine as an individual tax payer, paying for the tax breaks and 'sweetened deals' that they get as long as they hire people. If you are ok with subsidizing the already uber rich and lowering your standard of living then fine, what more can I say to you.

Lastly, it's clear you feel that while not perfect, this system, the way it's run, what it's projected to do and who it's run by and how is just the way it is and nothing can really be done. My view is this: America is the beacon, the country that all others, even those who state their hatred for it, all aspire to be. It is the first of the first world nations. It comes with great responsibility and at a great price. It isn't easy to be number one, it's expensive and it requires more hard work than any other country.

BTW, I'm not sure what you mean by " there's no shame if you didn't see the foreign market angle ". I take it as an insult and as you have made vast general assumptions about the market place, it's conditions and interactions with corporations, foreign markets and corporations just how easy and or great it is for average 'Joes and Janes' to find that "decent" job from that corporation who didn't need any tax break? PAY FOR WHAT YOU USE!

Groagun > gmporschenut also a fan of hondas
04/14/2015 at 20:07

It's not working, I can't see it. It keeps crashing, fucking Flash.

General Purpose > RdBme
04/14/2015 at 20:51

They aren't likely to do that. Toyota USA was based in California for over 50 years. Packing up is your HQ is expensive enough that you don't do it very often.

gmporschenut also a fan of hondas > Groagun
04/14/2015 at 21:41

ZeeeeCar > Megamullin
04/15/2015 at 01:42

Yes, but that's not the point of this article. Companies are finding more and more ways to shirk their tax responsibility and it will fall to those of us still lucky enough to be middle class to foot the bill.

Megamullin > ZeeeeCar
04/15/2015 at 08:30

I agree that's not the point of this article. However, my comment is a counter-argument, saying that, yes, when companies shrink their tax liability—that sucks. However, it would be worse if companies completely eliminated all U.S. tax liability by going out of country. By making a compromise, we keep some taxes rather than lose them all.

What I do like about the article, and your comment, is that they both point to a problem —companies are shrinking their tax liability. However, the article points out the government and the companies as wrongdoers in a system designed to screw you and benefit them. I don't think that's the case. I merely think that both the government and the companies are looking for ways to increase or keep money.

I do the same thing and I suspect you do, too. I take as many deductions on my tax return as possible to minimize my tax burden and increase my profits. Maybe not, maybe you magnanimously donate as much money as possible on your return. Maybe you even donate extra every year to the government rather than contributing to a charity of your choice. I know I don't.

IMO we can't expect corporations to do anything less.

Megamullin > Groagun
04/15/2015 at 08:46

No insult intended Groagun. If I offended, please accept my apology.

My intent is merely to raise an issue the article fails to. Namely, that states giving these tax breaks keeps a lot of Americans working. I think these tax breaks suck. I wish we didn't have to give them. However, they keep us competitive. What point is there in denying that? If Ohio doesn't give any breaks to FCA and no other states do either, they may very well go to Mexico.

You say that it is expensive to be American. Corporations are responding that they don't want to be the ones to foot the bill for American's sense of superiority. They're perfectly happy paying for Mexican contentment.

ZeeeeCar > Megamullin
04/15/2015 at 09:28

We need to do what corporations do: change the laws for our benefit.

Megamullin > ZeeeeCar
04/15/2015 at 09:32

I couldn't agree more! I don't have the money the corporations do, so I just call it voting, civic leadership, grass-roots campaigning and civil service. Everybody who hates it calls it lobbying and political gamesmanship.

toddycc > Groagun
04/15/2015 at 10:35

Kinja'd!!!

ACESandEIGHTS > Groagun
04/15/2015 at 10:54

OK, went and read this. Yeah, sad that The Big Three Two have moved so much away from the Midwest. Sad that people look at me with a straight face and say that Toyota is an American car, built right here in America, just like Honda.

Fiat and BMW and Glock and SIG and Ikea and so many others offer Americans seemingly-solid manufacturing jobs by basing their factories in America, where we know how to make things and don't mind doing it. But these are pawns in the global politician's game: "LOOK! MANUFACTURING! Gimme your vote." Never mind the nagging question of low wages, questionable permanency of operations in 'x' town, and— indeed —the overall (negligible) benefit of huge tax incentives for attracting industry to a certain state.

No wonder communist laborers took control of Fiat. Iron-fisted profits-above-everything operations sorta bring out the worst in people.

Groagun > Megamullin
04/15/2015 at 13:18

Accepted, let's move on, sort of.

I'm not denying anything actually I'm agreeing with you. I think the difference here is that you are taking the present day picture and exposing it for what it is. I am looking at the consequences of today and how they may play out in the future. We are reading the same book, just on different pages.

" If Ohio doesn't give any breaks to FCA and no other states do either, they may very well go to Mexico ." I've had this from a few people and I'm curious to find out from you and others if you believe that NAFTA should be re-examined and perhaps import taxes, yes more taxes, be placed on imported vehicles: like it used to be and is still practiced in many countries around the world, not just 2nd and 3rd world countries either.

" American's sense of superiority. They're perfectly happy paying for Mexican contentment ."

You have touched on this earlier but I think I need to clarify where I'm coming from. I think the phrase sense of superiority while accurate in some regards and in the description of certain individual Americans world outlook is correct, I think that phrase does not fit here.

Trust me, I'm not the flag waving American Exceptional-ism cheerleader you may think. I have just as many complaints about America and Americans as anyone else, besides the republican base constituency, no I'm merely looking at meta data and being honest about the state of affairs around the entire globe.

By no means is America perfect but it's constitution, bill of rights and democracy are the envy of the world and deservedly so. As for Mexico's contentment, I think that is a simplification of a very complicated and tragic look at the state which is Mexico.

How long can Mexico last in the system it has now? How long before people finally say enough? Living next door to the worlds preeminent super power, how did you get this way? How do they get out?

Groagun > toddycc
04/15/2015 at 13:20

You mean how the 2 are compared in the looks department? HA!

ZeeeeCar > Megamullin
04/16/2015 at 05:08

"voting" :-\