<html><head><meta http-equiv="content-type" content="text/html; charset=utf-8"></head><body dir="auto"><div>Also known as the "entitlement mentality".<br><br>Kit Craine</div><div><br>On Dec 10, 2012, at 6:14 AM, Art Deco <<a href="mailto:art.deco.studios@gmail.com">art.deco.studios@gmail.com</a>> wrote:<br><br></div><blockquote type="cite"><div>
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<a href="http://www.nytimes.com/"><img src="http://graphics8.nytimes.com/images/misc/nytlogo153x23.gif" alt="The New York Times" align="left" border="0" hspace="0" vspace="0"></a>
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<div class="">December 1, 2012</div>
<h1>As Companies Seek Tax Deals, Governments Pay High Price</h1>
<h6 class="">By
<span>
<a href="http://topics.nytimes.com/top/reference/timestopics/people/s/louise_story/index.html" rel="author" title="More Articles by LOUISE STORY"><span>LOUISE STORY</span></a></span></h6>
<div id="articleBody">
<p>
In the end, the money that towns across America gave General Motors did not matter. </p>
<p>
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. </p>
<p>
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. </p>
<p>
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.
</p>
<p>
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. </p>
<p>
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. </p>
<p>
</p>
<p>
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.
</p>
<p>
Yet across the country, companies have been doing just that. And the
giveaways are adding up to a gigantic bill for taxpayers. </p>
<p>
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. </p>
<p>
</p>
<p>
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. </p>
<p>
“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 <a href="http://www.upjohninst.org/">W.E. Upjohn Institute for Employment Research</a> in Kalamazoo, Mich. </p>
<p>
The Times analyzed more than 150,000 awards and created a <a href="http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html" title="Explore the Data">searchable database of incentive spending</a>.
The survey was supplemented by interviews with more than 100 officials
in government and business organizations as well as corporate executives
and consultants. </p>
<p>
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. </p>
<p>
</p>
<p>
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.
</p>
<p>
While some jobs have certainly migrated overseas, many companies
receiving incentives were not considering leaving the country, according
to interviews and incentive data. </p>
<p>
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. </p>
<p>
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. </p>
<p>
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. </p>
<p>
</p>
<p>
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. </p>
<p>
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. </p>
<p>
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, <a href="http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html#co-generalmotors" title="General Motors">G.M.</a>
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 <a href="http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html#co-ford" title="Ford">Ford</a> and <a href="http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html#co-chrysler" title="Chrysler">Chrysler</a>. </p>
<p>
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. </p>
<p>
“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.”
</p>
<p>
Mr. Cain cited research showing that the company received less money per
job than foreign automakers operating in the United States. </p>
<p>
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. </p>
<p>
For government officials like Bobby Hitt of South Carolina, the
incentives are a good investment that will raise tax revenues in the
long run. </p>
<p>
“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.
</p>
<p>
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. </p>
<p>
</p>
<p>
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.
</p>
<p>
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. </p>
<p>
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.” </p>
<p>
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.” </p>
<p>
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. </p>
<p>
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.
</p>
<p>
“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 <a href="http://www.downtownkc.org/">Downtown Council of Kansas City</a>. “It sounds like I’m talking myself out of a job, but there ought to be a law against what I’m doing.” </p>
<p>
<strong>Outgunned by Companies</strong> </p>
<p>
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. </p>
<p>
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. </p>
<p>
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. </p>
<p>
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. </p>
<p>
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.” </p>
<p>
The practical consequences can be easily seen. The <a href="http://www.manhattan-institute.org/">Manhattan Institute for Policy Research</a>,
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. </p>
<p>
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
<a href="http://www.cbpp.org/">Center on Budget and Policy Priorities</a>, a liberal-leaning advocacy group. </p>
<p>
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.
</p>
<p>
</p>
<p>
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. </p>
<p>
Since 2000, The New York Times Company has received more than $24 million from the city and state. </p>
<p>
In some places, local officials have little choice but to answer the demands of corporations. </p>
<p>
“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.” </p>
<p>
Local officials can find themselves across the table from conglomerates like <a href="http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html#co-royaldutchshell" title="Shell Oil">Shell Oil</a> and <a href="http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html#co-caterpillar" title="Caterpillar">Caterpillar</a>, the world’s largest maker of construction equipment. </p>
<p>
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. </p>
<p>
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. </p>
<p>
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.
</p>
<p>
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. </p>
<p>
“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.’ ” </p>
<p>
</p>
<p>
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. </p>
<p>
<a href="http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html#co-twitter" title="Twitter">Twitter</a>
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.
</p>
<p>
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. </p>
<p>
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.
</p>
<p>
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?”
</p>
<p>
<strong>A Zero-Sum Game</strong> </p>
<p>
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. </p>
<p>
Incentives were not in wide use, and several states had only recently begun to allow more of them. </p>
<p>
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. </p>
<p>
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. </p>
<p>
</p>
<p>
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. </p>
<p>
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. </p>
<p>
“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. </p>
<p>
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. </p>
<p>
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. </p>
<p>
“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.” </p>
<p>
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. </p>
<p>
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. </p>
<p>
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. </p>
<p>
</p>
<p>
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.
</p>
<p>
The tab for auto incentives has grown to $13.9 billion since 1985, according to the <a href="http://www.cargroup.org/">Center for Automotive Research</a>,
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. </p>
<p>
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. </p>
<p>
“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.” </p>
<p>
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.” </p>
<p>
<strong>G.M. Gets Into the Act</strong> </p>
<p>
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. </p>
<p>
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. </p>
<p>
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. </p>
<p>
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. </p>
<p>
</p>
<p>
“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. </p>
<p>
At the top of G.M., executives reviewed the proposals from various locations and went where the numbers added up. </p>
<p>
“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.”
</p>
<p>
For towns, it became a game of survival, even if the competition turned out to be a mirage. </p>
<p>
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. </p>
<p>
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. </p>
<p>
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. </p>
<p>
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.” </p>
<p>
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. </p>
<p>
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. </p>
<p>
“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 <a href="http://gusp.msu.edu/">Global Urban Studies Program</a>
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.” </p>
<p>
</p>
<p>
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. </p>
<p>
The company failed and dismissed all of its roughly 400 workers this
May. Rhode Island taxpayers are now on the hook for the loans. </p>
<p>
Officials said part of the difficulty was that communities do not get much say in a company’s business strategy. </p>
<p>
“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. </p>
<p>
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.
</p>
<p>
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.
</p>
<p>
G.M. took the city’s incentives but not its business advice and began building the giant Hummer there. </p>
<p>
“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.” </p>
<p>
The Hummer was discontinued in 2010, and the Shreveport factory closed
this August, the final victim of G.M.’s bankruptcy. </p>
<p>
<strong>Ypsilanti’s Losing Battle</strong> </p>
<p>
For much of the last 20 years, Doug Winters has been agitating for General Motors to be held accountable. </p>
<p>
</p>
<p>
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. </p>
<p>
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. </p>
<p>
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.” </p>
<p>
Ypsilanti first sued G.M. in the 1990s to prevent the company from
closing the factory at Willow Run that made the Chevrolet Caprice.
</p>
<p>
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.” </p>
<p>
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.” </p>
<p>
</p>
<p>
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. </p>
<p>
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. </p>
<p>
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.” </p>
<p>
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.” </p>
<p>
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. </p>
<p>
“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.” </p>
<p>
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. </p>
<p>
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. </p>
<p>
</p>
<p>
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. </p>
<p>
“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.”
</p>
<p>
Nonetheless, Ms. Stumbo said that if G.M. would bring jobs back to town,
she would be willing to grant the company more incentives. </p>
<p>
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.” </p>
<div class="">
<p>Lisa Schwartz and Ramsey Merritt contributed research.</p><br clear="all"></div></div><br>-- <br>Art Deco (Wayne A. Fox)<br><a href="mailto:art.deco.studios@gmail.com" target="_blank">art.deco.studios@gmail.com</a><br>
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