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Re: Why Bankruptcy Is the Best Option for GM
Toyota why Canada and not the South:
<span style="font-size: 14pt">Southern Auto Industry - Some Backstory</span>
<span style="font-style: italic">December 12, 2008, 10:09AM</span>
<span style="font-family: 'Courier New'">Looks like, for now, some Southern Republican Senators have succeeded in their effort to kill the U.S. auto industry, and further diminish their favorite bogeyman, labor unions. Their reasons are multivalent but the fact that the south boasts large, highly subsidized foreign auto plants, featuring thousands of non-union jobs is certainly front and center.
We know the South threw billions of subsidy dollars to land these jobs, but at what cost? And how good is the labor pool to work at these plants?
An August, 2005 article in Facing South, the online magazine of the Institute For Southern Studies, Toyota Reveals Limits of Great Southern Jobs Scam offers some insight...
Last month, Toyota made a decision that didn't get a lot of press, but sent ripples of concern through state houses across the South.
The Japanese auto giant announced that it was going to bypass offers of hundreds of millions of dollars in "recruitment incentives" (corporate subsidies) from several Southern states, and would instead set up shop in Ontario, Canada, which was offering much fewer give-aways.
The decision to head north was an embarassment for Southern states eagerly competing to lure Toyota, on several levels. Not only did they lose a trophy job-creator for their state. But the reason Toyota gave for the move was especially damning:
"The level of the workforce in general is so high that the training program you need for people, even for people who have not worked in a Toyota plant before, is minimal compared to what you have to go through in the southeastern United States," said Gerry Fedchun, president of the Automotive Parts Manufacturers' Association, whose members will see increased business with the new plant [...]
Several U.S. states were reportedly prepared to offer more than double [the] subsidy [Southern states were offering]. But Fedchun said much of that extra money would have been eaten away by higher training costs than are necessary for the Woodstock project.
He said Nissan and Honda have encountered difficulties getting new plants up to full production in recent years in Mississippi and Alabama due to an untrained - and often illiterate - workforce. In Alabama, trainers had to use "pictorials" to teach some illiterate workers how to use high-tech plant equipment.
And where did the money to subsidize these plants come from? From education, of course...
Starting with Alabama's successful bid to lure a Mercedes plant in 1992 with an incentive package that eventually cost over $300 million in tax breaks and other give-aways -- while the state's education system was under court order for lack of funding -- Southern states have shoveled billions of dollars to huge foreign automakers, turning the South into the "new Detroit."
But now companies are waking up to the limitations of locating in a state that cares more about handing out tax breaks than investing in its people.
What has always been a question for me is aren't there any blue collar Republicans that are union members? Don't any blue collar Republicans drive F-150's and would be laughed out of the good-old-boys club for showing up in a Toyota?
The answer came from of all sources, Joe The Plumber. On CNN, on election day, the host asked him, "Joe, you currently don't make $250,000, why is it so important to you that those who do be allowed to keep their tax breaks." Joe's answer put it all in perspective, "Principle."
"Principal," that ought to keep food on the table for all those blue collar Republican union auto workers. What a country.</span>
Toyota why Canada and not the South:
<span style="font-size: 14pt">Southern Auto Industry - Some Backstory</span>
<span style="font-style: italic">December 12, 2008, 10:09AM</span>
<span style="font-family: 'Courier New'">Looks like, for now, some Southern Republican Senators have succeeded in their effort to kill the U.S. auto industry, and further diminish their favorite bogeyman, labor unions. Their reasons are multivalent but the fact that the south boasts large, highly subsidized foreign auto plants, featuring thousands of non-union jobs is certainly front and center.
We know the South threw billions of subsidy dollars to land these jobs, but at what cost? And how good is the labor pool to work at these plants?
An August, 2005 article in Facing South, the online magazine of the Institute For Southern Studies, Toyota Reveals Limits of Great Southern Jobs Scam offers some insight...
Last month, Toyota made a decision that didn't get a lot of press, but sent ripples of concern through state houses across the South.
The Japanese auto giant announced that it was going to bypass offers of hundreds of millions of dollars in "recruitment incentives" (corporate subsidies) from several Southern states, and would instead set up shop in Ontario, Canada, which was offering much fewer give-aways.
The decision to head north was an embarassment for Southern states eagerly competing to lure Toyota, on several levels. Not only did they lose a trophy job-creator for their state. But the reason Toyota gave for the move was especially damning:
"The level of the workforce in general is so high that the training program you need for people, even for people who have not worked in a Toyota plant before, is minimal compared to what you have to go through in the southeastern United States," said Gerry Fedchun, president of the Automotive Parts Manufacturers' Association, whose members will see increased business with the new plant [...]
Several U.S. states were reportedly prepared to offer more than double [the] subsidy [Southern states were offering]. But Fedchun said much of that extra money would have been eaten away by higher training costs than are necessary for the Woodstock project.
He said Nissan and Honda have encountered difficulties getting new plants up to full production in recent years in Mississippi and Alabama due to an untrained - and often illiterate - workforce. In Alabama, trainers had to use "pictorials" to teach some illiterate workers how to use high-tech plant equipment.
And where did the money to subsidize these plants come from? From education, of course...
Starting with Alabama's successful bid to lure a Mercedes plant in 1992 with an incentive package that eventually cost over $300 million in tax breaks and other give-aways -- while the state's education system was under court order for lack of funding -- Southern states have shoveled billions of dollars to huge foreign automakers, turning the South into the "new Detroit."
But now companies are waking up to the limitations of locating in a state that cares more about handing out tax breaks than investing in its people.
What has always been a question for me is aren't there any blue collar Republicans that are union members? Don't any blue collar Republicans drive F-150's and would be laughed out of the good-old-boys club for showing up in a Toyota?
The answer came from of all sources, Joe The Plumber. On CNN, on election day, the host asked him, "Joe, you currently don't make $250,000, why is it so important to you that those who do be allowed to keep their tax breaks." Joe's answer put it all in perspective, "Principle."
"Principal," that ought to keep food on the table for all those blue collar Republican union auto workers. What a country.</span>
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