[Vision2020] Its Called Blackmail

[Art Deco]

Yes!

w.


On Mon, Dec 10, 2012 at 11:02 AM, Craine Kit <kcraine at frontier.com> wrote:

> Also known as the "entitlement mentality".
>
> Kit Craine
>
> On Dec 10, 2012, at 6:14 AM, Art Deco <art.deco.studios at gmail.com> wrote:
>
>  [image: The New York Times] <http://www.nytimes.com/>
>
> ------------------------------
> December 1, 2012
> As Companies Seek Tax Deals, Governments Pay High Price By LOUISE STORY<http://topics.nytimes.com/top/reference/timestopics/people/s/louise_story/index.html>
>
> In the end, the money that towns across America gave General Motors did
> not matter.
>
> When the automaker released a list of factories it was closing during
> bankruptcy three years ago, communities that had considered themselves
> G.M.’s business partners were among the targets.
>
> For years, mayors and governors anxious about local jobs had agreed to
> G.M.’s demands for cash rewards, free buildings, worker training and
> lucrative tax breaks. As late as 2007, the company was telling local
> officials that these sorts of incentives would “further G.M.’s strong
> relationship” with them and be a “win/win situation,” according to town
> council notes from one Michigan community.
>
> Yet at least 50 properties on the 2009 liquidation list were in towns and
> states that had awarded incentives, adding up to billions in taxpayer
> dollars, according to data compiled by The New York Times.
>
> Some officials, desperate to keep G.M., offered more. Ohio was proposing a
> $56 million deal to save its Moraine plant, and Wisconsin, fighting for its
> Janesville factory, offered $153 million.
>
> But their overtures were to no avail. G.M. walked away and, thanks to a
> federal bailout, is once again profitable. The towns have not been so
> fortunate, having spent scarce funds in exchange for thousands of jobs that
> no longer exist.
>
>  One township, Ypsilanti, Mich., is suing over the automaker’s departure.
> “You can’t just make these promises and throw them around like they’re
> spare change in the drawer,” said Doug Winters, the township’s attorney.
>
> Yet across the country, companies have been doing just that. And the
> giveaways are adding up to a gigantic bill for taxpayers.
>
> A Times investigation has examined and tallied thousands of local
> incentives granted nationwide and has found that states, counties and
> cities are giving up more than $80 billion each year to companies. The
> beneficiaries come from virtually every corner of the corporate world,
> encompassing oil and coal conglomerates, technology and entertainment
> companies, banks and big-box retail chains.
>
>  The cost of the awards is certainly far higher. A full accounting, The
> Times discovered, is not possible because the incentives are granted by
> thousands of government agencies and officials, and many do not know the
> value of all their awards. Nor do they know if the money was worth it
> because they rarely track how many jobs are created. Even where officials
> do track incentives, they acknowledge that it is impossible to know whether
> the jobs would have been created without the aid.
>
> “How can you even talk about rationalizing what you’re doing when you
> don’t even know what you’re doing?” said Timothy J. Bartik, a senior
> economist at the W.E. Upjohn Institute for Employment Research<http://www.upjohninst.org/>in Kalamazoo, Mich.
>
> The Times analyzed more than 150,000 awards and created a searchable
> database of incentive spending<http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html>.
> The survey was supplemented by interviews with more than 100 officials in
> government and business organizations as well as corporate executives and
> consultants.
>
> A portrait arises of mayors and governors who are desperate to create
> jobs, outmatched by multinational corporations and short on tools to
> fact-check what companies tell them. Many of the officials said they feared
> that companies would move jobs overseas if they did not get subsidies in
> the United States.
>
>  Over the years, corporations have increasingly exploited that fear,
> creating a high-stakes bazaar where they pit local officials against one
> another to get the most lucrative packages. States compete with other
> states, cities compete with surrounding suburbs, and even small towns have
> entered the race with the goal of defeating their neighbors.
>
> While some jobs have certainly migrated overseas, many companies receiving
> incentives were not considering leaving the country, according to
> interviews and incentive data.
>
> Despite their scale, state and local incentives have barely been part of
> the national debate on the economic crisis. The budget negotiations under
> way in Washington have not addressed whether the incentives are worth the
> cost, even though 20 percent of state and local budgets come from federal
> spending. Lawmakers in Washington are battling over possible increases in
> personal taxes, while both parties have said that lower federal taxes on
> corporations are needed for the country to compete globally.
>
> The Times analysis shows that Texas awards more incentives, over $19
> billion a year, than any other state. Alaska, West Virginia and Nebraska
> give up the most per resident.
>
> For many communities, the payouts add up to a substantial chunk of their
> overall spending, the analysis found. Oklahoma and West Virginia give up
> amounts equal to about one-third of their budgets, and Maine allocates
> nearly a fifth.
>
>  In a few states, the cost of incentives is not significant. But several
> of them have low business taxes — or none at all — which can save companies
> even more money than tax credits.
>
> Far and away the most incentive money is spent on manufacturing, about
> $25.5 billion a year, followed by agriculture. The oil, gas and mining
> industries come in third, and the film business fourth. Technology is not
> far behind, as companies like Twitter and Facebook increasingly seek tax
> breaks and many localities bet on the industry’s long-term viability.
>
> Those hopes were once more focused on automakers, which for decades have
> pushed cities and states to set up incentive programs, blazing a trail that
> companies of all sorts followed. Even today, G.M.<http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html#co-generalmotors>is the top beneficiary, public records indicate. It received at least $1.7
> billion in local incentives in the last five years, followed closely by
> Ford<http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html#co-ford>and
> Chrysler<http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html#co-chrysler>.
>
>
> A spokesman for General Motors said that almost every major employer
> applied for incentives because they help keep companies competitive and
> retain or create jobs.
>
> “There are many reasons why so many Ford, Chrysler and G.M. plants closed
> over the last few decades,” said the G.M. spokesman, James Cain. “But these
> factors don’t mean that the companies and communities didn’t benefit while
> the plants were open, which was often for generations.”
>
> Mr. Cain cited research showing that the company received less money per
> job than foreign automakers operating in the United States.
>
> Questioned about incentives, officials at dozens of other large
> corporations said they owed it to shareholders to maximize profits. Many
> emphasized that they employ thousands of Americans who pay taxes and spend
> money in the local economy.
>
> For government officials like Bobby Hitt of South Carolina, the incentives
> are a good investment that will raise tax revenues in the long run.
>
> “I don’t see it as giving up anything,” said Mr. Hitt, who worked at BMW
> in the 1990s and helped it win $130 million from South Carolina.
>
> Today, Mr. Hitt is the state’s secretary of commerce. South Carolina
> recently took on a $218 million debt to assist Boeing’s expansion there and
> offered the company tax breaks for 10 years.
>
>  Mr. Hitt, like most political officials, has a short-term mandate. It
> will take years to see whether the state’s bet on Boeing bears fruit.
>
> In Michigan, Gov. Rick Snyder, a Republican in his first term, has been
> working to eliminate most business tax credits but is bound by past awards.
> The state gave General Motors $779 million in credits in 2009, just a month
> after the company received a $50 billion federal bailout and decided to
> close seven plants in Michigan.
>
> G.M. can use the credits to offset its state tax bill for up to 20 years.
> “You don’t know who will take a credit or when,” said Doug Smith, a senior
> official at the state’s economic development agency. “We may give a credit
> to G.M., and they might not take it for three years or 10 years or more.”
>
> One corporate executive, Donald J. Hall Jr. of Hallmark, thinks business
> subsidies are hurting his hometown, Kansas City, Mo., by diverting money
> from public education. “It’s really not creating new jobs,” Mr. Hall said.
> “It’s motivated by politicians who want to claim they have brought new jobs
> into their state.”
>
> For Mr. Hall and others in Kansas City, the futility of free-flowing
> incentives has been underscored by a border war between Kansas and
> Missouri.
>
> Soon after Kansas recruited AMC Entertainment with a $36 million award
> last year, the state cut its education budget by $104 million. AMC was
> moving only a few miles, across the border from Missouri. Workers saw
> little change other than in commuting times and office décor. A few months
> later, Missouri lured Applebee’s headquarters from Kansas.
>
> “I just shake my head every time it happens, it just gives me a sick
> feeling in the pit of my stomach,” said Sean O’Byrne, the vice president of
> the Downtown Council of Kansas City <http://www.downtownkc.org/>. “It
> sounds like I’m talking myself out of a job, but there ought to be a law
> against what I’m doing.”
>
> *Outgunned by Companies*
>
> For local governments, incentives have become the cost of doing business
> with almost every business. The Times found that the awards go to companies
> big and small, those gushing in profits and those sinking in losses,
> American companies and foreign companies, and every industry imaginable.
>
> Workers are a vital ingredient in any business, yet companies and
> government officials increasingly view the creation of jobs as an expense
> that should be subsidized by taxpayers, private consultants and local
> officials said.
>
> Even big retailers and hotels, whose business depends on being in specific
> locations, bargain for incentives as if they can move anywhere. The same
> can be said for many movie productions, which almost never come to town
> without local subsidies.
>
> When Oliver Stone made the 2010 sequel to “Wall Street,” in his mind there
> was only one place to shoot it: New York City. Nonetheless, the film, a
> scathing look at bankers’ greed, received $10 million in tax credits,
> according to 20th Century Fox.
>
> In an interview, Mr. Stone criticized subsidies for industries like
> banking and agriculture but defended them for Hollywood, saying that many
> movies can be shot anywhere and that their actors and crew members pay
> state income taxes. “It’s good,” Mr. Stone said of the film subsidies. “Or
> like basically the way business is done. I don’t understand what the moral
> qualm is.”
>
> The practical consequences can be easily seen. The Manhattan Institute
> for Policy Research <http://www.manhattan-institute.org/>, a conservative
> group, found that the amount New York spends on film credits every year
> equals the cost of hiring 5,000 public-school teachers.
>
> Nationwide, billions of dollars in incentives are being awarded as state
> governments face steep deficits. Last year alone, states cut public
> services and raised taxes by a collective $156 billion, according to the Center
> on Budget and Policy Priorities <http://www.cbpp.org/>, a liberal-leaning
> advocacy group.
>
> Incentives come in many forms: cash grants and loans; sales tax breaks;
> income tax credits and exemptions; free services; and property tax
> abatements. The income tax breaks add up to $18 billion and sales tax
> relief around $52 billion of the overall $80 billion in incentives.
>
>  Collecting data on property tax abatements is the most difficult because
> only a handful of states track the amounts given by cities and counties.
> Among them is New York, where businesses save an estimated $1.1 billion a
> year in property taxes. The American International Group, the insurance
> company at the center of the 2008 financial crisis, continued to benefit
> from a $23.8 million abatement from New York City at the same time it was
> being bailed out with $180 billion in federal money.
>
> Since 2000, The New York Times Company has received more than $24 million
> from the city and state.
>
> In some places, local officials have little choice but to answer the
> demands of corporations.
>
> “They dictate their terms, and we’re not really in a position to question
> their deal terms,” Sarah Eckhardt, a commissioner in Travis County, Tex.,
> said of companies she has dealt with recently, including Apple and
> Hewlett-Packard. “We don’t have the sophistication or the resources to
> negotiate with a company that has the wherewithal the size of a country. We
> are just no match in negotiating with that.”
>
> Local officials can find themselves across the table from conglomerates
> like Shell Oil<http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html#co-royaldutchshell>and
> Caterpillar<http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html#co-caterpillar>,
> the world’s largest maker of construction equipment.
>
> Shell has been offered a tax credit worth as much as $1.6 billion over 25
> years from Pennsylvania, which competed with West Virginia and Ohio for an
> energy production facility. Royal Dutch Shell, the parent company, made $31
> billion in profits in 2011 — about $3.5 million every hour. The company’s
> chief executive made $13.1 million last year, according to Equilar, an
> executive compensation firm. Pennsylvania predicts that the plant will
> create thousands of long-term jobs, but it did not require them in exchange
> for the tax credit.
>
> Caterpillar has received more than $196 million in local aid nationwide
> since 2007, though it has chastised states, particularly its home base,
> Illinois, for not being business-friendly. This year, Caterpillar announced
> a new plant in Georgia, which offered $44 million in incentives. Local
> counties chipped in free land and other aid, including $15 million in tax
> breaks and $8.2 million in road, water and sewer repairs.
>
> The company, whose profits are soaring, recently froze workers’ pay for
> six years at several locations, arguing that it needed to remain
> competitive. A spokesman for the company, Jim Dugan, said it employed more
> than 50,000 people and invested billions of dollars nationwide.
>
> Local officials typically have scant information about the track record of
> corporations, like whether they lived up to job assurances elsewhere. And
> some officials acknowledged that they did not know to what extent
> incentives were a deciding factor for companies.
>
> “I don’t know that there’s a way to know other than talking to the
> businesses, and the businesses telling us that that was a factor in
> creating jobs,” said Ken Striplin, the city manager of Santa Clarita,
> Calif., which gives tax breaks in a designated enterprise zone. “There’s no
> box that says ‘I would have created this job without the enterprise
> zone.’ ”
>
>  California is one of the few states that have been cutting back on
> incentives. But that does not mean its cities are following suit. When
> Twitter threatened to leave San Francisco last year, officials scrambled to
> assuage the company.
>
> Twitter<http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html#co-twitter>was not short on money — it soon received a $300 million investment from a
> Saudi prince and $800 million from a private consortium. The two received
> Twitter equity, but San Francisco got a different sort of deal.
>
> The city exempted Twitter from what could total $22 million in payroll
> taxes, and the company agreed to stay put. The city estimates that
> Twitter’s work force could grow to 2,600 employees, although the company
> made no such promise.
>
> A Twitter spokeswoman said the company was “very happy to have been able
> to stay in San Francisco.” City officials did not respond to inquiries.
>
> Like many places, San Francisco has been cutting its budget. Public parks
> have lost about $12 million in recent years, though workers at Twitter will
> not lack for greenery. The company’s plush new office has a rooftop garden
> with great views and amenities. Enjoying the perks, one employee sent out a
> tweet: “Tanned on Twitter’s new roof deck this morning as some dude served
> me smoothie shots. This is real life?”
>
> *A Zero-Sum Game*
>
> It was the company every state had to have. In 1985, General Motors was
> looking for a spot to manufacture its Saturn, a new compact car that would
> compete with Japanese imports and create thousands of American jobs.
>
> Incentives were not in wide use, and several states had only recently
> begun to allow more of them.
>
> In fact, when G.M. announced the search, its chairman, Roger Smith, said
> the perks would not be a predominant factor. “Tax breaks can’t make a silk
> purse out of a sow’s ear,” Mr. Smith told The Detroit Free Press. He said
> G.M. planned to avoid states that had large debts or lackluster schools.
>
> Undeterred, some 30 states stepped forward in what became a full-out
> competition. One official, Bill Clinton, then the governor of Arkansas,
> traveled to Detroit offering income tax credits and sales tax exemptions
> worth nearly $200 million.
>
>  Mr. Smith essentially kept his word and chose Tennessee, which had put
> together a relatively small package. Reid Rundell, a retired G.M.
> executive, said in a recent interview that it had come down to geography.
> “The primary factor was distribution for incoming parts, as well as
> outgoing vehicles,” Mr. Rundell said.
>
> But the gates had been opened. In 1992, South Carolina lured BMW with a
> $130 million package; the next year, Alabama got Mercedes-Benz at a price
> tag that topped $300 million.
>
> “What the auto incentives did back then was really raise the profile of
> economic incentives both within companies, in government and in the
> public’s eye,” said Mark Sweeney, who worked for the South Carolina
> Commerce Department in the 1990s and now advises companies on obtaining
> government grants.
>
> By 1993, governors were regaling one another at a national conference with
> stories of deals beyond the auto industry, including a recent bidding war
> for United Airlines that drew more than 90 cities. The airline had set up
> negotiations in a hotel, and its representatives ran floor to floor
> comparing bids, said Jim Edgar, then the governor of Illinois.
>
> Mr. Edgar said he had called for a truce, concerned that the practice was
> unfair to companies that did not receive incentives. But many states would
> not sign on, he said, particularly those in the South, where businesses
> were moving.
>
> “If you’ve got some states doing it, it’s hard for the others not to do
> it,” Mr. Edgar said. “It’s like unilaterally disarming.”
>
> Soon after, economists at Federal Reserve branches were questioning the
> use of incentives. One, in Minnesota, used mathematical proofs and game
> theory to show that competition between states did not increase overall
> economic value. Several other economists have since called the practice a
> zero-sum game.
>
> A group of taxpayers in Michigan and Ohio went as far as suing
> DaimlerChrysler after Ohio and the City of Toledo awarded the automaker
> $280 million in the late 1990s. The suit argued that it was unfair for one
> taxpayer to be given a break at the expense of all others.
>
> The suit made its way to the Supreme Court, and G.M. and Ford signed on to
> briefs supporting Daimler, as did local governments. The National Governors
> Association warned the court that prohibiting incentives could lead to jobs
> moving overseas. “This is the economic reality,” the association said in a
> brief.
>
>  The governors offered no hard evidence of the effectiveness of tax
> credits, but the Supreme Court did not consider whether they worked anyway.
> In 2006, the court concluded that the taxpayers did not have the legal
> standing to challenge Ohio’s tax actions in federal court.
>
> The tab for auto incentives has grown to $13.9 billion since 1985,
> according to the Center for Automotive Research <http://www.cargroup.org/>,
> a nonprofit group in Ann Arbor, Mich. G.M., the top recipient, was awarded
> $3.3 billion of the aid. Since 1979, automakers also closed more than 267
> plants in the United States, about half of which still sit empty, according
> to the center.
>
> The auto industry and some local officials have long argued that auto
> companies create so many jobs and draw in so many supporting suppliers that
> all taxpayers benefit. Even if companies shut down years later, as Saturn
> did in Tennessee for a few years, the trade-off is worth it, they said.
>
> “I do believe that if a state ever is going to create incentives,” said
> Lamar Alexander, who was Tennessee’s governor in 1985 when Saturn selected
> the state, “the auto industry would be by far the No. 1 target, because an
> auto assembly plant is a money target.”
>
> Still, Mr. Alexander, now a United States senator, said that recruiting a
> large factory today would be more expensive. “It has changed a lot,” he
> said. “It’s almost become a sweepstakes.”
>
> *G.M. Gets Into the Act*
>
> G.M. may have initially minimized the role of local dollars, but as the
> company’s financial problems grew, incentives became a big part of its
> math.
>
> The actions of the company were described in more than two dozen in-depth
> interviews with former company officials, tax consultants and governors and
> mayors who have dealt with G.M.
>
> The automaker’s real estate division, Argonaut Realty, oversaw the hunt
> for the most lucrative deals. Up and down the corporate ladder, employees
> were encouraged to push governments for more, according to transcripts of
> public meetings and interviews. Even G.M. plant managers knew that the
> future of their facilities depended in part on their ability to send word
> of big discounts back to Detroit.
>
> Union representatives were enlisted to attend local hearings, putting a
> human face on the jobs at stake. G.M.’s regional tax managers often showed
> up, armed with tax abatement wish lists and highlighting the company’s
> gifts to local charities.
>
>  “We knew what our investment of X amount meant to the community, and we
> knew we needed to partner with the community to be successful,” said
> Marilyn P. Nix, who worked as a real estate executive at G.M. for 31 years
> until retiring in 2005.
>
> At the top of G.M., executives reviewed the proposals from various
> locations and went where the numbers added up.
>
> “I know people like to blame the industry for taking advantage of the
> incentives, but you go back to what your fiduciary responsibility is to the
> stockholders,” Ms. Nix said. “As long as you’ve got people that are willing
> to better the deals, the management owes it to their stockholders to try to
> get the best economic deal that they can.”
>
> For towns, it became a game of survival, even if the competition turned
> out to be a mirage.
>
> Moraine, Ohio, was already home to a G.M. plant in 1997 when the company
> pushed hard for additional incentives. G.M. said it was looking for a place
> to accommodate more manufacturing.
>
> Wayne Barfels, the city manager at the time, said a G.M. representative
> had told officials that Moraine was competing with Shreveport, La., and
> Linden, N.J. After the local school board approved property tax breaks, The
> Dayton Daily News reported that the other towns had not been in discussions
> with G.M.
>
> The school board considered rescinding the deal, but allowed G.M. to keep
> it after a company official apologized. In 2008, G.M. shut the Moraine
> facility.
>
> In towns where General Motors remains, local officials praised the
> company. “I can say they have been a great partner to us,” said Virg
> Bernero, the mayor of Lansing, Mich. “It would do something to the psyche
> of this community if they were not here. I mean, I just praise God every
> day.”
>
> Looking to lure businesses beyond automakers, states have routinely
> bolstered their incentive tool kits. In 2010 alone, states created or
> expanded about 40 tax credits and exemptions, according to the National
> Conference of State Legislatures.
>
> The nature of the credits has also changed. New ones are geared toward
> attracting technology and green energy companies, but it is hard to know
> whether 15 years down the road they will thrive or wind up stumbling like
> the automakers. And many modern companies, like those in digital
> technology, can easily pack up and leave.
>
> “I don’t see anything that suggests that Twitter and Facebook are better
> bets in the long run,” said Laura A. Reese, the director of the Global
> Urban Studies Program <http://gusp.msu.edu/> at Michigan State
> University. Ms. Reese advises local governments to invest in residents
> through education and training rather than in companies where “it’s hard to
> pick winners.”
>
>  Yet states try to do it all the time. In 2010, Rhode Island, which has
> the nation’s second-highest unemployment rate, recruited Curt Schilling, a
> former Red Sox pitcher, to move his video game company from Massachusetts.
> The company, 38 Studios, had never released a game and was not making
> money, but the governor at the time had the state guarantee $75 million in
> loans.
>
> The company failed and dismissed all of its roughly 400 workers this May.
> Rhode Island taxpayers are now on the hook for the loans.
>
> Officials said part of the difficulty was that communities do not get much
> say in a company’s business strategy.
>
> “We, as communities, stake our futures with these people who are supposed
> to know what they’re doing, and sometimes they don’t,” said Arthur Walker,
> a businessman in Shreveport and former chairman of the city’s chamber of
> commerce.
>
> Mr. Walker and other officials in Shreveport know firsthand. In 2000, they
> were worried that G.M. would close a plant in their area and responded with
> a generous proposal: the city would cut the company’s gas bill and provide
> work force training grants. In addition, G.M. would benefit by a recent
> increase in one of the state’s income tax credits.
>
> Eager to encourage innovation, Shreveport officials suggested ways the
> city could assist G.M. in building electric cars. “We wanted to be part of
> the future,” said Mr. Walker, whose brother worked at the plant.
>
> G.M. took the city’s incentives but not its business advice and began
> building the giant Hummer there.
>
> “We knew they needed to build green cars — I mean, who builds a Hummer for
> the 21st century?” Mr. Walker said. “It was a losing proposition that we
> found ourselves in. We couldn’t win because those people weren’t making the
> correct business decisions, in my view. When it didn’t work, we’re the ones
> left holding the bag.”
>
> The Hummer was discontinued in 2010, and the Shreveport factory closed
> this August, the final victim of G.M.’s bankruptcy.
>
> *Ypsilanti’s Losing Battle*
>
> For much of the last 20 years, Doug Winters has been agitating for General
> Motors to be held accountable.
>
>  Mr. Winters, the attorney for Ypsilanti Township and several other
> places around Ann Arbor, has lived in Ypsilanti all his life. His
> grandmother labored at the local plant, Willow Run, during World War II,
> when it made bomber planes. People in town still proudly point out that a
> woman known as Rosie the Riveter worked there as well. After the war, when
> G.M. moved into the plant to manufacture its automatic transmission system,
> his father got a job.
>
> Mr. Winters loves the history of Willow Run but hates what he views as
> corporate hypocrisy: G.M. asked for government help on the one hand and
> then appealed to free-market rationales for closing shop.
>
> Over the years, Ypsilanti granted G.M. more than $200 million in
> incentives for two factories at Willow Run, Mr. Winters said. “They had put
> basically a stranglehold on the entire state of Michigan and other places
> across the country by just grabbing these tax abatements by the billions,”
> he said. “They were doing it with a very thinly disguised threat that if
> you don’t give us these tax abatements, then we’ll have to go somewhere
> else.”
>
> Ypsilanti first sued G.M. in the 1990s to prevent the company from closing
> the factory at Willow Run that made the Chevrolet Caprice.
>
> The town had granted the company tax incentives after the factory manager
> argued that G.M.’s ability to compete with other carmakers was at stake,
> documents in the lawsuit show. The tax break and “favorable market demand,”
> said the plant manager, Harvey Williams, would allow the automaker to
> “maintain continuous employment.”
>
> Nevertheless, G.M. shut the factory. A lower court found in favor of
> Ypsilanti, but the ruling was reversed on appeal. The judge said that a
> company’s job assurances “cannot be evidence of a promise.”
>
>  In 2010, when the company closed the remaining factory at Willow Run,
> Mr. Winters sued again. This time, Ypsilanti argued that the automaker
> should have been forced to close overseas factories instead, especially
> since American taxpayers had bailed out G.M. In addition, Ypsilanti sought
> to recover money from G.M., saying the company had agreed to reimburse the
> town for some incentives if it left.
>
> So far, Ypsilanti’s claims have not been addressed. They were complicated
> by G.M.’s bankruptcy, which allowed the carmaker to emerge as a new company
> and leave some of its liabilities and contractual obligations behind.
>
> When asked whether the new G.M. has civic responsibilities to its former
> factory towns, Mr. Cain, the company spokesman, said: “Our obligation to
> the communities where we do business is to run a successful business. And
> when we prosper, it allows us to do more than just turn the lights on and
> make cars.”
>
> He also said that since the bailout, “G.M. has invested more than $7.3
> billion in its U.S. facilities, and we’ve created or retained almost 19,000
> jobs in communities all over the country.”
>
> Matthew P. Cullen, who oversaw real estate and economic development for
> G.M. until he left the company in 2008, said the automaker was aware of its
> impact on communities. He said that what happened with G.M. was the result
> of an entire industry changing and that there had been no bad intentions.
>
> “If you go forward in good faith doing everything you can and make the
> investment, then you’re partners,” Mr. Cullen said. “Sometimes partnerships
> in business work, and they work for 60 years. And in some cases, they
> don’t, and it doesn’t make you a bad partner.”
>
> Some towns that are still dealing with the fallout of plant closings might
> disagree. In Pontiac, Mich., tax revenues have fallen 40 percent since 2009
> after the old G.M. knocked down buildings on its property, resulting in
> lower tax assessments, according to the city’s emergency manager.
>
> In Ypsilanti, an entity set up to sell off G.M. property is marketing the
> plant as valuable. At the same time, it has been arguing for lower property
> taxes on the grounds that its plant is not worth much.
>
>  Ypsilanti’s supervisor, Brenda Stumbo, said the township would be stung
> hard by further revenue cuts. Ypsilanti has already slimmed down its Fire
> Department, and city workers are juggling multiple jobs. There are seven to
> 10 home foreclosures a week, giving the township the highest foreclosure
> rate in the county, Ms. Stumbo said.
>
> “Can all of it be traced back to General Motors?” she said, listing auto
> suppliers that closed after G.M. did. “No, but a great deal of it can.”
>
> Nonetheless, Ms. Stumbo said that if G.M. would bring jobs back to town,
> she would be willing to grant the company more incentives.
>
> But Mr. Winters is not so sure. He said he would never support more
> incentives without stronger protections for Ypsilanti. “They’ve done a lot
> of damage to a lot of people and a lot of communities, and they’ve
> basically been given a clean slate,” he said. “It’s a ‘get out of jail
> free’ card.”
>
> Lisa Schwartz and Ramsey Merritt contributed research.
>
>
> --
> Art Deco (Wayne A. Fox)
> art.deco.studios at gmail.com
>
>
>
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-- 
Art Deco (Wayne A. Fox)
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