>And, buying a BMW X5 or X6 helps fund South Carolina schools, just as buying a Nissan Altima helps fund the schools in Mississippi, and buying a Kia made in GA helps fund the schools there.
Those are foreign-owned companies.
No joke. So?
My comment was a response to the one you posted...
Buying a Honda doesn't help the Washington DC schools. Buying a GM car does help Detroit's schools.
Is it your claim than manufacturing plants in located in the US (that are owned by foreign based companies) don't help fund the educational systems where they are located?
They do, you know....
But, if that isn't your claim, then what's your point?
Who would have ever thought that by purchasing a locally made product that employed local residents, both of whom pay taxes to support the local educational system as well as local infrastructure, that it would result in a non-patriotic act against my country....
Go figure...
However, here's the real crux of the matter...
We appear to have a relatively small subset of the US population that feels its only proper to insist the rest of the US population buy its product, yet at the same time, doesn't see the importance of reciprocating.
Buying a GM or Ford product is more likely to help Detroit schools and buying a Toyota or Honda is more likely to help Tokyo schools. You can't completely ignore country of origin for Corporate headquarters, and primary R&D, marketing, and on and on. Again, it's not about total absolutes here. It is absolutely known that the Big Three employ more people in the U.S., and utilize more suppliers, than any foreign company (wow! there! I said it! Those companies you guys love are foreign companies).
Again, not every foreign car is built here, and not every American brand is built in Canada or Mexico and has low U.S. and Canada content (and again, it's not me excluding Mexico in content, it's the labels that are on new cars).
It is good for those employed that those foreign companies have plants here. But the bigger picture is that the Big Three employ more people here.
I think we're not the ones making absolute statements, as some do here, about Japanese and Korean brands being junk, but I've sure seen absolute comments about the Big Three here being junk, that's for certain.
And everybody knows the past abuses of the UAW which led to huge legacy costs the domestics have, but how does that continue to have to factor into so many posts here? It's like Groucho Marx asking, "Do you still beat your wife?" And I've never had a family member who was a UAW employee nor was I one myself.
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And some foreign companies set up their own companies as suppliers here.
>those employed that those foreign companies have plants here.
And how quickly those actual fulltime jobs at the foreign-owned plants will disappear if economics makes it advantageous to build outside the country OR if there is an international conflict. Those plants will be empties quicker than we could say Toyoda.
Don't even think about how the large percentage of part time jobs aren't included in the actual full time employees. The part timers are gone in a flash when they're not needed, or just not liked. >we're not the ones making absolute statements,
I think Edmunds needs to take a look at some pseudonyms used here that make derogatory remarks everytime the username is posted.
Cool! I've got to get a pair of those! I believe Red Wing boots are still American made. I used to buy Bostonian shoes when they were still made here and still have them after more than 15 years. I stopped buying them when I started seeing "Made in China" or "Made in India" surreptitiously stamped inside the tongue of the shoes. I could tell something was different about them when I saw the sloppy stitching and glue marks that were absent from shoes I bought in the past. Seeing the "Made in China" label confirmed my suspicions. I guess those workers in West Virginia wanted too much, huh? :mad:
Rest assured that if GM EVER got close to 40% share of US auto sales, the products would not be junk.
Trouble is that there are a FEW good ones now and market share is 18%. Perhaps that can support their NEW business model but perhaps not.
All indications from their propaganda machine point to remaining disease inside the General's biology. Hard to just say forget the past at this point.
Making junk is why they failed. Making and supporting market leading products is why they could succeed. (read: develop the brand not drop it because the sales sucked because the competition beat you).
I've been thinking this for years, that the Accord, Altima, Camry, etc, have become what the old Malibu, Cutlass Supreme, etc, used to be, once upon a time.
Buying a GM or Ford product is more likely to help Detroit schools and buying a Toyota or Honda is more likely to help Tokyo schools. You can't completely ignore country of origin for Corporate headquarters, and primary R&D, marketing, and on and on.
I would argue that buying a US made Camry (and I don't even like the car) helps the US more than buying a Canadian made GM or Ford or C car. Since over 90% of the cost of the car is spent in the country it is made and sold (profit is much less than 10%), the Camry in this example is far more beneficial to the US than the Canadian or Mexican made US nameplate.
BMW has invested well over $1 BILLION in its manufacturing facility in upstate SC, and that doesn't include the additional $100's of millions that their suppliers have also invested.
Sorry to tell you, but no US based manufacturer has seen fit to make anything anywhere close to an investment in the community like that.
And, I'm willing to bet good money that the people living in the communities where Hyundai, Kia, Nissan and other foreign "branded" companies have located would echo the very same comment.
Unless you can demonstrate that the workers in these areas don't deserve a decent state of employment, then your argument falls FLAT!
The sheer amount of what I like to call "2 dimensional thinking" on these forums simply amazes me. Its like reading a book, but only being aware of the 2 pages the book is opened to... never stopping to understand there is so much more to the story.
Do you have any response whatsoever to the portion of the post that mentions that the Big Three employ more people in this country, and utilize more suppliers' employees, that the 'transplants'? Two-dimensional thinking, indeed.
You and I do agree that it's a good thing to help the local economy...which is partly a reason I've owned three new cars built at the GM plant near me. The fact that it is an American-owned corporation is a positive, not a negative, IMO.
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>BMW has invested well over $1 BILLION in its manufacturing facility in upstate SC
Did they pay that amount. Or did the taxpayers of the state and other taxing entities pay large amounts to subsidize the plant? In most cases very expensive incentives have been given to get the plants to locate. The companies have the Southern states bidding against each other.
Good point, Imidazo. These are the same folks who grumble about TARP money to GM. At least that money went to a U.S.-based company and the top executives are here. Look at Toyota...their U.S. sales chief looked like a deer in the headlights at congressional hearings about their many recalls and the story out there was that Japanese management kept him only on a 'need to know' basis, but it sounds like even that didn't happen.
I do think some of our disagreements on this board depend on where you live. If you live near a plant making foreign brands, you are more likely to see buying one of them as being good for the country. If you live near a Big Three plant, like I do and always have, it's the opposite.
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Part of my feelings (despite actually liking GM product more than imports which seem 'alien' to me...personal preference, no attacks please) is also about how as Americans we had a habit of 'helping the underdog'. The Big Three need us more than any of the Japanese or German brands do. And without dredging up ancient saws about the UAW and bad management, this is now, that was then.
So, for me, it's about: 1) Liking the product 2) Wishing to help America first and foremost
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I feel the same way! I've always liked Cadillac and Buick automobiles better than any other makes - foreign or domestic. Knowing I'm helping America and American workers is the gravy.
Part of my feelings (despite actually liking GM product more than imports which seem 'alien' to me...personal preference, no attacks please) is also about how as Americans we had a habit of 'helping the underdog'. The Big Three need us more than any of the Japanese or German brands do. And without dredging up ancient saws about the UAW and bad management, this is now, that was then.
So, for me, it's about: 1) Liking the product 2) Wishing to help America first and foremost
For me, I have to like the product first and foremost. I'm not going to buy something I don't like and I'm certainly not going to keep what I'm not happy with.
I grew up in a family of Ford and GM vehicles and that is what I've primarily bought. But, I got burned along the way with more than one bad Ford and GM vehicle. I did buy a couple of foreign vehicles, that I really liked. In my experience, they were flat out better than the domestic vehicles I had previous and at the same time. When I say better, I mean built better, drove better, and overall performed better.
That said, the domestics seem to have some competitive products out. GM is still a sore spot with me and right now, I like what Ford is doing. If I was in the market for a vehicle today. I'd probably look at Ford first.
Like many of the GM faithful on these boards that love GM, I tend to be that way with Ford. The only difference seems to be I realize that Ford has built lots of junk and was deserving of being on the brink of bankruptcy. 5-10 years ago, I pretty much had written Ford off as a vehicle I'd ever buy again.
" At least that money went to a U.S.-based company and the top executives are here."
And I'm supposed to feel good about that? Why? Just look at Bob Nardelli. First he runs Home Depot into the toilet. To appease stockholders he receives one of biggest compensation payoffs in US History (in excess of $200 M) to disappear. In a brilliant move Chryco hires Nardelli despite his lack of automotive background and prior track record. He then puts his magical managerial skills to use at Chrysler with predicable results.
I don't know about you, but as a US taxpayer I feel just great that my (our) money stayed in the US and propped up Nardelli, Wagoner and their ilk.
Do you have any response whatsoever to the portion of the post that mentions that the Big Three employ more people in this country, and utilize more suppliers' employees, that the 'transplants'?
Well, DUH!!!
The largest industry in the US has the most employees. And, since the Big-3 had close to a century head start on the foreign competition (and were allowed a closed market by law ...ie., tariffs...up until the 60's), its no surprise they have more employees. But, lets be real here....Many of those very same suppliers also supply those foreign brand products as well.
The 2-dimensional thinking comes in when folks like you expect that trend from the past to carry forward forever.
Want a great example or two of that not happening?
Frankly, this entire argument reminds me of one I had with my uncle a few years back, when the company he owned went out of business. He whined that "times just passed me by". I, along with many in my family, saw it differently. I told him "The times didn't pass him by, he simply stood still while time moved onward".
BIG DIFFERENCE!!!!
But, while we're at it, what's your response to why Michigan (a hotbed state of "Buy American") has so many Wal-marts?
Do the Wal-marts in Michigan sell only US branded/made products?
I have grown tired of these circular arguments you and others continue to put forward, so I'll simply say this...
Unless (or until) the US government passes laws to dictate what we purchase, the US consumer is going to buy what he likes the best, be it because it is perceived by the customer to look the best, work the best, has the longest lifespan, has the best price.... the list goes on.
So, my advice to the whiners here is this: Spend less time whining about a "perceived" problem and more time 1) understanding why the US consumer buys non-US made products, and 2) convince the US manufacturers to meet those specifications.
You do that, and your "perceived" problem vanishes.
I'llq bet I have, over the years, seen 1000's of car sales transactions, and I have YET to see a single one made because the dealer had a gun to the buyer's head. Nor are these people buying foreign-branded products in order to do something unpatriotic.
If you can't understand that, or refuse to accept it, then all you really are interested in is whining in a public forum.... nothing more.
Wow. I'd hope you'd read that post again in awhile and see if anything I've written should result in a response like that.
Again...I figured out long ago that those who believe they are the most 'enlightened' are often the most narrow-minded, in that any difference of opinion from theirs is mocked and ridiculed.
I have never tried to make anyone think they should not buy a foreign brand...only why I choose not to. But the other direction...OMG.
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.Many of those very same suppliers also supply those foreign brand products as well.
That's true with some suppliers anyway. When GM was in the midst of bankruptcy, I talked to my BIL who works for a tool and die shop in Michigan. He deals with Ford, GM, Chrysler, Honda, and Toyota among other manufacturers. I don't know if he does any business with the other transplants. Anyway, I asked him how bad would GM possibly being gone hurt him and the company he works for. He said they'd be okay, they did enough business with other manufacturers that they could afford to lose GM (granted it would hurt). But GM going down wouldn't take down the whole operation. He drives a Nissan Maxima BTW.
Did they pay that amount. Or did the taxpayers of the state and other taxing entities pay large amounts to subsidize the plant?
Gee, even if it was $1B it is 1/60th of the amount that GM has been paid to survive. So you pay $1B and get a new plant and new services for an area, or you pay $60B to bail out a company with a failed business model - not even comparable! :shades:
Gee, even if it was $1B it is 1/60th of the amount that GM has been paid to survive. So you pay $1B and get a new plant and new services for an area, or you pay $60B to bail out a company with a failed business model - not even comparable!
I disagree, but at least I appreciate your style!
$1B=one plant in one area $60B=multiple plants and suppliers across the entire U.S.
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$1B=one plant in one area $60B=multiple plants and suppliers across the entire U.S.
The falacy in that argument is that SC DIDN'T spend anywhere near $1 billion for the BMW plant, but the US taxpayer IS on the hook for $60 Billion for GM and C.
You are correct, and I readily admit that. We can also all agree that the GM bailout cost $60B. However, and I didn't spend a whole lot of time looking (I'm supposed to be working!), first thing that came up for me in Google was that the BMW plant cost "$250 to 300 million" which is a far cry from a billion. There is no doubt it added jobs to that particular area, of course.
I also read that SC spent "millions" to get that one plant there, and that BMW leases its site for $1 a year and pays no state or corporate profits tax and no land tax to Spartanburg County, which built it a $40 million aircraft runway.
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$1B=one plant in one area $60B=multiple plants and suppliers across the entire U.S.
I guess it boils down to one's feelings about capitalism. I have a very strong belief in a market system. The strong survive and the weak should fail. I'm embarassed that if I go to Europe I can get a BMW or Audi, yet US cars are big soft and hulking (although Ford has some good stuff over there). And when you look at 30 years of mismanagement, a union that sucks a company dry, and decades of products that most of us would admit were inferior (at least most of them) -- well I find it offensive to the workings of a free market that we would spend $60B of taxpayer money to prop up such failures. It goes against everything that our economy should stand for.
I know that if my kid was a tatooed drinking druggie 20 year old, I would not buy him/her a house or give him/her a car because it would "help them". I'd bite the bullet, feel a parent's pain, and kick them out of the house to make it on their own.... or not.
"......Rest assured that if GM EVER got close to 40% share of US auto sales, the products would not be junk."
Ironically, I would disagree with that, only because recent history (within the last 25 yrs) seems to disprove that.
In 1965, Buick produced 653,838 cars. That was spread over at LEAST 8 different plants. (there were 8 plants for the full sized cars, not sure how many more for the A bodies.) And that doesn't even include the number of other GM makes produced at those plants.
In 2009, Buick produced 102,306 cars. Thru July, they have put out 86,831. They also use far fewer plants. This has me wondering if GM's downfall, and also the troubles we have seen from Toyota and Nissan, may be due to the sheer volume of vehicles coming out of Flagship plants in Georgetown Ky, and Canton Miss (Nissan).
I mean, if those plants are (as the GM plants were) going full bore 24/7, could that be a major factor in the dropoff in quality??
As for the airport, GSP jetport (what it was called back then) existed long before BMW arrived. I was flying Eastern and Southern airlines out of GSP way back in the 1970's. GSP was an idea of Roger Milliken and some other far-thinking executives from back in the 1960's.
I guess it boils down to one's feelings about capitalism. I have a very strong belief in a market system. The strong survive and the weak should fail. I'm embarassed that if I go to Europe I can get a BMW or Audi, yet US cars are big soft and hulking (although Ford has some good stuff over there). And when you look at 30 years of mismanagement, a union that sucks a company dry, and decades of products that most of us would admit were inferior (at least most of them) -- well I find it offensive to the workings of a free market that we would spend $60B of taxpayer money to prop up such failures. It goes against everything that our economy should stand for.
Personally, I'm not so ticked that $60 B was spent in as much as I am that the industry was completely on the rocks before anything was done. The executives knew, yet they continued taking huge salaries. The unions knew, yet kept demanding unreasonable concessions. The dealers know the product quality was horrible, but never banded together to confront the manufacturers.
In a ironic twist of the game "musical chairs", everyone continued playing the game, hoping they wouldn't be sitting in a chair when the music finally stopped.
If you cut your arm, how many pints of blood do you lose before you think about getting a little help from someone? Or, do you simply blame someone else for the loss of blood?
After all, it was no surprise... at least, it wasn't to anyone outside the government or the industry.
Surely we could have made adequate changes back in the 80's and 90's that would have averted (or, at a minimum, greatly reduced) the debacle as it actually occurred. I clearly remember reading about the huge debt and legacy costs coming due well back in the 80's.
Instead, we drove off a cliff and attempted to patch things up on the way down to the ground below.
The Big Three need us more than any of the Japanese or German brands do. And without dredging up ancient saws about the UAW and bad management, this is now, that was then.
Problem is "now is then" it seems to me. IOW, nothing much changed except the debt load is way down IMHO.
So, for me it's about:
A) Liking the product. Wishing to help the company that makes the best products. Should be American but not at the moment.
I mean, if those plants are (as the GM plants were) going full bore 24/7, could that be a major factor in the dropoff in quality??
Yes, because the controls would not be capable of ensuring high quality back then and are probably far more capable today. However, there is a high water mark after which failures are missed. Toyota learned that big time. They are in a better position to recover because of their top notch consistency which GM does not enjoy.
Unfortunately, GM could gain back close to that mark if their TOTAL quality were even close to the quality of Toyota and Honda. After all, they are the Hosts in the USA.
You loose here and you're toast everywhere. The business model was doomed and their biggest issue was complacency while Rome was burning. Looks like Toyota missed the boat but the complacency is not even remotely close to GM's historical execution. I do agree Toyota has the exact same size issues.
Too bad it's the idiots who buy their products which were the ones to bail them out, myself included big time!
Let me know how you would feel if they repeat the mistakes as Chrysler already has.
Well, I have plenty of time to look. Here is the nasty reality: The Top Asians really do translate into USA investment. In the second quarter of this year, Honda built 236,819 cars in the U.S., a dry bit of data until you realize that in the same time frame it built 236,559 cars back in Japan. It’s a tiny edge. It may not last for the whole year. But it’s the first time that Honda produced more cars here in the U.S. than at home.
The background is also compelling: Japan’s home market continues to shrink, while U.S. sales appear to have bottomed out and are experiencing a slow uptick. According to the Japan Automobile Manufacturers Assoc., which keeps tab of such things, its members now operate 31 U.S. manufacturing plants and have 34 major R&D facilities here.
Automakers are truly international businesses; all of them. For example, a Toyota and a Honda built here beat out the likes of Ford, GM and Chrysler in terms of domestic content. Top of the list compiled by Cars.com is the Toyota Camry built in Georgetown, Kentucky, and Lafayette, Indiana. Second is the Honda Accord, among those 236,819 cited above, built in Marysville, Ohio, and Lincoln, Alabama. First “domestic” nameplates are the Ford Escape and Focus in third and fourth place, then the Chevrolet Malibu and, further down the list, the Dodge Ram 1500 truck.
Domestic parts content information is posted along side the window sticker of all new cars; this, as part of the American Automobile Labeling Act of 1994. Identified is the percentage, by cost, of parts originating in the U.S. and Canada.
Like it or not, Global Auto Manufacturing means just that: Everywhere there is investment. At the end of the day, the products speak for themselves
Automakers are truly international businesses; all of them.
Yes. Its the 21st Century, and that is how businesses of this nature and size exist.
The old days of Nationalism, at least as it related to automobile construction.... are long gone.
They all locate in multiple countries, and they all deal in multiple currencies... which sometimes, can mean the difference between a profit and loss in and of themselves.
Adapt or die, especially in the billion $$$ businesses. Its really that simple.
>Only an IDIOT would think SC would have a $$$Billion to give to a company to locate here!
I hope you're not calling me personally an "idiot."
That would be a personal attack.
I didn't say anything about billions in my post.
>Do a little research, instead of making wild accusations. You might actually learn something
Before calling other people "idiots," please take a look. You might actually learn something.
>$$$Billion
Now that you suggest it, that may be close to what poor SC has given a company which has bounded healthily in the money since building the plant in SC. Add up all the benefits paid by the state and others probably is close to that in subsidies.
I've noticed a trend of criticism of other people rather than discussion of the topics: Post 9675:
"The sheer amount of what I like to call "2 dimensional thinking" on these forums simply amazes me. Its like reading a book, but only being aware of the 2 pages the book is opened to... never stopping to understand there is so much more to the story. "
Post 9685:
"If you can't understand that, or refuse to accept it, then all you really are interested in is whining in a public forum.... nothing more. "
Others have a right to their opinion without being treated in a pompous manner. Try just discussing the topic.
###### ######
Incentives for BMW off the top,
$115 million $1500 per job Promises of "stable" tax rates
And this tidbit full of the actual incentives:
"But, thanks to incentives, BMW's South Carolina plant has escaped millions of dollars in taxes and costs that industrial companies expect to pay in developed nations.
"BMW paid only $1.4 million in state taxes of all kinds in 1998 and $6.7 million in local taxes, mostly building and equipment taxes to one small school district. Together, that's less than 2 percent of what the company paid in worldwide taxes for the year.
"Government giveaways permeate BMW's finances.
"South Carolina taxpayers spent $40 million on a runway for BMW's planes. They furnished millions more for BMW worker "training," including whitewater rafting trips for BMW executives. The company pays $1 a year to lease its $36 million piece of land. It pays no land tax to Spartanburg County. Building and equipment tax on the first phase of BMW's plant is 43 percent lower than what established businesses have to pay. Tax discounts on BMW's second phase are even bigger -- 62 percent -- even though the expansion couldn't have been built anywhere but Greer.
"BMW has never paid South Carolina's 5 percent tax on corporate profits and shows no signs of doing so for years. Start-up and depreciation costs will delay profitability "until early in the next century," said BMW spokesman Bobby Hitt. But even then, tens of millions of dollars in incentive credits will keep BMW immune to income taxes for much longer."
And I don't think I saw mentioned in the original round of giveaways, the cost of training programs for employees is usually picked up by the bidding state.
#######3 #######3
And for the current addition:
Infrastructure
:Full details of the incentive package haven't yet been fully disclosed. State officials, however, did say that BMW's project support will include a $35-million I-85 interchange to handle the added traffic at the automaker's plant. "Other infrastructure support will likely include a wastewater treatment plant, auto industry analysts speculate. "One of the deal's key supportive elements, however, bolsters intellectual infrastructure. And that support reflects the new role that BMW envisions for the Greer operation. "South Carolina is donating $25 million to nearby Clemson University for the school to create an automotive engineering graduate program. BMW, in turn, is donating $10 million to the Clemson program. " "As we look to the future, Clemson's graduate program will create an additional quality source of engineers for BMW, as well as for the larger automotive industry," Dr. Leube said"
No, I'm not calling you an idiot, nor anyone else.
SC simply doesn't have that kind of money to throw around, so IMO, no rational person would think it would. I agree, I could have worded it better. So, for that, I humbly apologize.
But actually, this was the earlier "exchange":
>BMW has invested well over $1 BILLION in its manufacturing facility in upstate SC
Did they pay that amount. Or did the taxpayers of the state and other taxing entities pay large amounts to subsidize the plant? In most cases very expensive incentives have been given to get the plants to locate. The companies have the Southern states bidding against each other.
Every state gives incentives. BMW got them, and more recently, Boeing did as well so that it would agree to locate here in SC (Charleston). I never claimed otherwise. And, its not isolated just to the southern states. See below what GM got from Michigan.
Take a look at these links to get the other side of the story...
Would you spend a couple hundred million to make a few billion?
I think most would respond with a definite "YES".
Unfortunately for the US taxpayer, we seem to (as a country) have a system that encourages companies to "game" the states for the best deal around. Like it or not, that's how the "game" is played. Don't think the Big-3 are immune to this sort of behavior, either. As an example...
Michigan's $256 Million in Incentives Helps Spur GM's $1 Billion Investment Michigan, continuing the aggressiveness that's made it a potent business expansion player, has landed another behemoth. State and local governments put together a US$256 million incentive package that helped entice General Motors (www.gm.com) to build two plants just outside Lansing. The two plants will add 2,800 jobs to GM's Lansing-area work force.
In some ways, it was déjà vu all over again for Lansing. In January, GM broke ground on a $558 million luxury car plant in the Lansing area.
New Law Rewards Existing Employers In Designated Areas for Brownfields Redevelopment
One key part of the incentive package only fully took shape on June 6.
That was the day that Gov. John Engler signed into law a bill that allows the Michigan Economic Growth Authority (MEGA), which is administered through the Michigan Economic Development Corp. (medc.michigan.org), to award tax credits to existing employers that locate in a brownfields area. Previously, brownfields redevelopment tax credits could only be granted to employers who brought new jobs to an area.
Commented Engler, "This project wouldn't have been possible without the support of the Michigan Legislature. Their approval of legislation, which allows the MEGA credit to be used for job retention, kept more than 28,000 jobs in our state. This is a tremendous victory for Michigan and Lansing area workers and businesses." (According a University of Michigan study, GM's newest investment in the Lansing area will retain an estimated 28,561 combined direct and indirect jobs in Michigan.)
Putting the revised legislation into play in a major way, MEGA awarded GM a job creation tax credit worth an estimated $61.8 million over a 20-year span.
GM Spokesman: Incentives Help 'Make Valid Business Case'
Smart players, of course, don't make location decisions on incentives alone. At most, the savvy ones use incentives only as a tiebreaker between sites of equal quality that meet the business case.
GM, history suggests, is certainly a knowledgeable operator when it comes to site selection. Nonetheless, the incentive package, particularly the extension of the brownfields job-creation tax credits, certainly seems to have made an impression.
After the entire incentives package was made public, GM spokesman Jim Hopson commented, "This goes a long way toward GM making the valid business case for making the investment in Delta Township." (Lansing is part of the Delta Township.)
Commenting after the GM Board of Directors officially approved the expansion that the automaker has earlier proposed, Lansing Mayor David Hollister said, "This announcement marks the completion of our committee's efforts in obtaining a second plant. Throughout this process, every marker we were required to complete was met on time.
"We have set the stage for this community to become the only community in the world with two new automotive manufacturing facilities," Hollister added.Here's a capsule look at some of the other major planks in GM's $256 million incentives package:
Tax abatements on real and personal property taxes:
The city of Lansing offered GM tax abatements on real and personal property taxes worth about $165 million for up to 25 years. Job training assistance: The state pledged up to $1,000 each for each of GM's 2,800 jobs, for a total of $2.8 million, and it committed $4 million in funds to build a new Michigan Technical Education Center to support the project. Infrastructure improvements: The state, the city of Lansing and Delta Township will make infrastructure improvements to the proposed site at an estimated cost of $28 million. Abatements of the state education tax: Michigan is providing an abatement of the state education tax valued at $23 million over the lifetime of the local property tax agreement.
Lastly, if you wish to take a shot at "incentive giving", I'm game. I'm actually in the group that feels they should be illegal. I've seen far too many companies play one state (AND politician) against another, and US companies are equally as bad (or good, depending on how you look at it) as foreign ones.
Living in the Upstate, however, I can personally attest to the improvement in the area since BMW located here, and I can promise you the vast majority of money did NOT come from the state. It simply doesn't have the income nor the resources to pay it out.
How about giving us a link to the sources you quoted? I'd like to read them.
And, just out of curiosity...
One of the deal's key supportive elements, however, bolsters intellectual infrastructure. And that support reflects the new role that BMW envisions for the Greer operation.
"South Carolina is donating $25 million to nearby Clemson University for the school to create an automotive engineering graduate program. BMW, in turn, is donating $10 million to the Clemson program.
BMW has expanded so rapidly in South Carolina that one in very six cars that the German automaker sells is made in the state. Last year, the Greer plant rolled its 100,000th BMX X5 off the line.
New South Carolina Incentives Spur BMW's $400M, 400-Job Expansion
By JACK LYNE • Site Selection Executive Editor of Interactive Publishing
GREER, S.C. – BMW (www.bmw.com) picked an apropos way to celebrate its 10th anniversary in South Carolina (www.callsouthcarolina.com): It announced that it's adding 400 workers in a US$400-million expansion of its sprawling 2.4-million-sq.-ft. (222,960-sq.-m.) plant in Greer, S.C. The expansion continues the German automaker's life-in-the-fast-lane modus operandi since it first announced that it was coming to the Palmetto State in 1992. With the 400 added employees, the total work force at the huge production operation in the Greenville-Spartanburg metro (www.greenvillechamber.org) will swell to some 4,900 workers. And the $400 million in new capital expenditures will push BMW's total outlay for the plant past US$2 billion. The company's expansion in South Carolina has been on such a fast track, in fact, that one in every six BMWs sold worldwide is now made in the state.
"Our decision to place our U.S. plant in South Carolina has proven to be a successful one as we strive to keep up with customer demand for our X5 sports activity vehicle and begin to build the new Z4 roadster," BMW President Helmut Leube said in announcing the project.
Current demand is straining the plant's resources, BMW officials explained. Employees at the Greer facility are working 110 hours a week on two shifts; that's 65 percent of a week's 168 total hours, and it's almost the equivalent of a three-shift setup.
With the added employees and investment, the Greer plant's 2003 production total will rise to 155,000 units. The facility's projected 2002 production will total 130,000 units, according to company officials.
Bond Act Greased Project's Skids
BMW, however, wasn't the only party in this deal focused on meeting demand. State lawmakers worked to meet the needs of South Carolina's corporate clientele, in the process giving the automaker's expansion a forceful nudge.
"South Carolina must go beyond teaching basic skills for manufacturing if our goal is to move into a knowledge-based economy," Commerce Secretary Charles Way (pictured) said.
That nudge came from the General Obligation Economic Development Bond Act, which took effect on May 15th. The South Carolina legislature recently passed the bill, which provides infrastructure to boost economic development.
BMW was no idle sideline observer in the legislative change. The automaker earlier this year lobbied for a state law to reward companies that undertake major expansions.
And the new law is a virtual blueprint for BMW's expansion. The bond act specifies that qualifying programs must involve a $400-million investment and 400 new jobs - precisely the numbers that BMW nailed with its expansion.
"The General Assembly understood that infrastructure development was essential in bringing large projects of a minimum of $400 million and 400 jobs to the state when it passed the Economic Development Bond Act," Secretary of Commerce Charles Way said after BMW's announcement. "We appreciate their ability to see how good planning today produces a high yield for tomorrow."
BMW, state officials said, will qualify for as much as $80 million of the $250-million economic development pool created by the General Obligation Economic Development Bond Act.
Aid Also Bolsters Intellectual Infrastructure
Full details of the incentive package haven't yet been fully disclosed. State officials, however, did say that BMW's project support will include a $35-million I-85 interchange to handle the added traffic at the automaker's plant.
Other infrastructure support will likely include a wastewater treatment plant, auto industry analysts speculate.
One of the deal's key supportive elements, however, bolsters intellectual infrastructure. And that support reflects the new role that BMW envisions for the Greer operation.
South Carolina is donating $25 million to nearby Clemson University for the school to create an automotive engineering graduate program. BMW, in turn, is donating $10 million to the Clemson program.
"As we look to the future, Clemson's graduate program will create an additional quality source of engineers for BMW, as well as for the larger automotive industry," Dr. Leube said.
"We looked for areas where our faculty's strengths and interests overlap with the state's economic development needs," Clemson President James Barker said of the university's new automotive engineering graduate program.
Clemson President Emphasizes Universities' Role in Economic Development
The Clemson program dovetails with BMW's strategy to reposition the Greer plant, moving it beyond its current manufacturing focus into design and engineering.
"BMW envisions this as the next generation of leaders who will lead the country in designing customized vehicles," Clemson President James Barker said of the university's automotive engineering program.
The Clemson program also represents a shift in the state's economic development strategy, Way said.
"South Carolina must go beyond teaching basic skills for manufacturing if our goal is to move into a knowledge-based economy," he noted. "Clemson's graduate engineering education center is a tremendous step toward building our new economy by educating our future work force. State support for Clemson's program is imperative if we want to reach our goal of increasing wages and improving the lives of South Carolinians."
Automotive and transportation technology is one of eight target areas in which Clemson is aiming to create world-class programs. In picking its target programs, the university made bolstering the state's business climate a major consideration.
"In identifying these emphasis areas, we looked for areas where our faculty's strengths and interests overlap with the state's economic development needs," Barker said. "This partnership demonstrates the role strong research universities can play in economic development."
Second Plant in the Cards?
Further expansion could be in the cards for BMW's South Carolina plant.
The automaker in the spring of 2001 offered a glimpse of the shape of things that could possibly come. That glimpse came in BMW's application for an air-quality permit for the entire 1,039-acre (420.5-hectare) Greer site. The permit application s
economic genius talking here, but I'll take a swing at it...
Aside from direct cash grants to a company, I would guess that many incentives that a given state may give to a company to build a plant there may actually cost little or nothing at all, in the short run, and may get the state something back in the long run...
Example: say State A gives Company X a property tax break for 10 years so the Company builds an auto plant in the state...they take 250 acres of rural land, WHICH WAS GENERATING ALMOST ZERO TAX REVENUE FOR THE STATE AND COUNTY ANYWAY, and let Company X have it for zero property tax for 10 years...what has the state and/or county lost???...nothing...what has the state and or county gained???...jobs for the locals, who, by earnings more, will probably build real homes on real land (taxable, by the way) instead of buying run-down mobile homes with almost zero tax value...restaurants move in to serve the plant employees, along with the vendors (and THEIR employees) who also have better jobs, plus the mall that gets built 5 miles away, and all that retail sales tax, and so on, and so on...
OK, so the state may build one or two Interstate exits, run a railroad spur over to the plant, and maybe even upgrade an airport runway...this, IMO, is pennies for what the auto plant does to upgrade the area for about a 25 miles radius...
Now if the state gave away prime real estate in a downtown metropolis, you might have an argument, but I think they usually give away rural land, somewhere near an interstate highway, probably near some kind of railroad track, so the land was worthless until the plant went in, and the minor upgrades may not cost as much as one might think...it may really be a small investment by the state for the big payoff later on, and that "later on" may actually start when the plant opens...then, 10 years later, when the property tax kicks in, could it be a huge windfall for the small investment???
Wherever Hyundai makes Sonatas, I would bet that plant is humming...just not in Spring Hill, TN, where GM used to make Saturns...I would gamble on a plant for an import before I would gamble on a Big 3 plant, because the imports, IMO, have a better chance of surviving the next ten years (to pay that property tax) whereas the Big 3 may be gone in 3 years...
Lemko, better buy a few more Caddies, because they may go away soon...
Notice the pattern of dependency BMW developed. They lobbied for special treatment for further payments by the state and others. This even though they have flourished and the share price had doubled, as mentioned in one of the articles. The company has made a killing with the aid of lowered taxes subsidized by the people of SC, and they have an entitlement developed already.
Do I recall a plant built in Alabama for Mercedes? The cost of subsidies was such that the state could have paid the people for not working more cheaply. The cost was on the order of $150,000 per job? I haven't researched this year; I'm going on memory and may be wrong, so since you're closer physically to Alabama you may be more aware of the history of that one.
I recall the Ford plant build in a county where I lived. They forgave the $500,000 tap in fee required for the water system that was relatively newly developed in the county. The rest of us were paying the water bills and the usual tap ins. Oh, that Ford plant is closed now. And that's the county water system that said one of my last payments for water came in a day or two late by mail and refused to drop the $1.50 penalty.
I must say, its funny to claim BMW developed a pattern of dependency (your words, not mine), seeing the bailouts C and GM got from the US taxpayer.
Some questions for you...
Do you think a successful company should be penalized for exceptional execution? Are you of the mind that a poorly run company is entitled to taxpayer funds, but a successfully managed one isn't? Should we regenotiate/back out on agreements made with companies if they end up being really successful .vs. moderately successful?
And, most importantly, would you invest $10 in order to receive a payback of $100 over the next ten years? $50 to get $100? How much, if any at all?
Actually, Marsha7 pretty much hit the target with her posting.
But, I'll say it again. I feel that ALL incentive packages used to lure manufacturers, retailers, etc. should be outlawed, or at least, standardized, so that they CAN be compared with one another.
And, as you pointed out in the MB/Alabama example, not all incentive deals have the desired outcome. I believe NC and Dell Computer may be another failed example. Let's face it... Not every "at-bat" produces a home run.
Frankly, IMO they have gotten out of hand, and its something a company expects to be offered before it will even discuss locating in a state. It IS an entitlement expectation. And, that mentality existed LONG before BMW even first considered building a US plant.
If you read the links elated to BMW that I posted earlier, you can see the logic used by those promoting incentive packages for companies.
And, to a large degree, they do make sense.
Many get hung up on companies getting property tax exemptions and transportation improvements made, but neglect the income produced by the tax on wages, properties owned by the workers, and the increased spending by the employees in the community (sales taxes).In the case of an automaker, there is also the tax proceeds that come from the suppliers that locate near the plant, most of which get NO incentive package at all.
The real problem is that every package is different, so it makes it quite difficult to compare one deal with another.
But, as I posted 3 or 4 posts ago, all the states do it. South Carolina, Michigan, etc.
As I recall, Kia located a plant in West Point, Ga.
What was the economy like 5 year before the plant located there, and what is the economy there today?
Notice the pattern of dependency BMW developed. They lobbied for special treatment for further payments by the state and others. This even though they have flourished and the share price had doubled, as mentioned in one of the articles. The company has made a killing with the aid of lowered taxes subsidized by the people of SC, and they have an entitlement developed already.
Isn't that sort of a laughable statement compared to GM needing $60B to survive? Talk about dependency.
IMHO providing tax incentives to bring substantial business into an area is good government policy. No different than a temporary lowering of a tax rate to spur an economy. Not the same as propping up a failure.
BMW is a German company. I can't speak for them specifically, but usually a long-standing company, like Benz, contributed to the war effort against our country, and there are still folks alive on both sides who remember the atrocities committed by the Germans and Japanese.
It hasn't been long enough for me to forget--400,000 U.S. servicemen killed. 400,000. Only a little more than a decade before I was born....not 100, 200, or 300 years ago.
I know, someone will post and say they know a POW who drives a Benz or Lexus. I'm glad they can overlook it. I can't. I'm also aware of the political incorrectness of such a statement.
And for those who will roll their eyes and make comments about hanging onto something for too long, I can make the same remark about the constant comments about long-ago UAW abuses mentioned in this forum.
2024 Chevrolet Corvette Stingray 2LT; 2019 Chevrolet Equinox LT; 2015 Chevrolet Cruze LS
I can only remember back to 2004 when my GMC had the stalling problem they couldn't fix until I filed the Lemon Law paperwork.
I have complete respect for your memory of WWII. However, a failed company has nothing to do with that war and the fact that global competitors buried GM as well as the economic conditions they were not ready for can be looked at like reverse patriotism at GM and C. They had the responsibility to build the best and they failed. Chrysler X2. Yes, Chrysler was weeded twice. Buy American?
1965 was a record-breaking year for the domestic auto industry, and Consumer Reports noted that quality was slipping, big-time, on just about all brands.
I think it's just a given that that faster you slap the cars together, the more problems you're going to have. However, 1965 was also a pretty special year. Very rarely in automotive history has there been so much that's all-new in the same year. With the exception of Imperial, Lincoln, and the Cadillac 75 limo, every single full-sized car was all-new. The Mustang was new as well (although introduced in April 1964). The Corvair was new. And the intermediate Plymouths and Dodges were heavily revised versions of those shrunken 1962-64 "full-sized" cars that were about 15 years ahead of their time.
So I think the fact that the majority of the cars were first-year designs, coupled with the fact that they were wildly popular, so they had to be thrown together quickly, made it inevitable that quality would slip.
1965 was a record-breaking year for the domestic auto industry, and Consumer Reports noted that quality was slipping, big-time, on just about all brands.
Well, they saying "don't buy a car that is built on a Monday or Friday" had to start somewhere;).
When all of your competition is equally lousy, it doesn't matter so much.
I bought a '98 Ford SVT Contour brand new and it had numerous build quality and fit and finish issues upon delivery. When I received my SVT certificate it showed a build date that was on a Monday:( I loved the car, but once the extended 75k warranty was up, I had to get rid of it.
Comments
Those are foreign-owned companies.
No joke. So?
My comment was a response to the one you posted...
Buying a Honda doesn't help the Washington DC schools. Buying a GM car does help Detroit's schools.
Is it your claim than manufacturing plants in located in the US (that are owned by foreign based companies) don't help fund the educational systems where they are located?
They do, you know....
But, if that isn't your claim, then what's your point?
Perhaps it's patriotism? :P
Wow!
Who would have ever thought that by purchasing a locally made product that employed local residents, both of whom pay taxes to support the local educational system as well as local infrastructure, that it would result in a non-patriotic act against my country....
Go figure...
However, here's the real crux of the matter...
We appear to have a relatively small subset of the US population that feels its only proper to insist the rest of the US population buy its product, yet at the same time, doesn't see the importance of reciprocating.
How insensitive of us!
Buying a GM or Ford product is more likely to help Detroit schools and buying a Toyota or Honda is more likely to help Tokyo schools. You can't completely ignore country of origin for Corporate headquarters, and primary R&D, marketing, and on and on. Again, it's not about total absolutes here. It is absolutely known that the Big Three employ more people in the U.S., and utilize more suppliers, than any foreign company (wow! there! I said it! Those companies you guys love are foreign companies).
Again, not every foreign car is built here, and not every American brand is built in Canada or Mexico and has low U.S. and Canada content (and again, it's not me excluding Mexico in content, it's the labels that are on new cars).
It is good for those employed that those foreign companies have plants here. But the bigger picture is that the Big Three employ more people here.
I think we're not the ones making absolute statements, as some do here, about Japanese and Korean brands being junk, but I've sure seen absolute comments about the Big Three here being junk, that's for certain.
And everybody knows the past abuses of the UAW which led to huge legacy costs the domestics have, but how does that continue to have to factor into so many posts here? It's like Groucho Marx asking, "Do you still beat your wife?" And I've never had a family member who was a UAW employee nor was I one myself.
>and utilize more suppliers
And some foreign companies set up their own companies as suppliers here.
>those employed that those foreign companies have plants here.
And how quickly those actual fulltime jobs at the foreign-owned plants will disappear if economics makes it advantageous to build outside the country OR if there is an international conflict. Those plants will be empties quicker than we could say Toyoda.
Don't even think about how the large percentage of part time jobs aren't included in the actual full time employees. The part timers are gone in a flash when they're not needed, or just not liked.
>we're not the ones making absolute statements,
I think Edmunds needs to take a look at some pseudonyms used here that make derogatory remarks everytime the username is posted.
2014 Malibu 2LT, 2015 Cruze 2LT,
Trouble is that there are a FEW good ones now and market share is 18%. Perhaps that can support their NEW business model but perhaps not.
All indications from their propaganda machine point to remaining disease inside the General's biology. Hard to just say forget the past at this point.
Making junk is why they failed. Making and supporting market leading products is why they could succeed. (read: develop the brand not drop it because the sales sucked because the competition beat you).
Regards,
OW
UAW approved vehicles
LOL!!!
Mazda 6
Mitsubushi Eclipse
Mitsubushi Galant
Toyota Corolla
Toyota Tacoma
Mazda B-series
Mitsubushi Endeavor
Too funny
I've been thinking this for years, that the Accord, Altima, Camry, etc, have become what the old Malibu, Cutlass Supreme, etc, used to be, once upon a time.
I would argue that buying a US made Camry (and I don't even like the car) helps the US more than buying a Canadian made GM or Ford or C car. Since over 90% of the cost of the car is spent in the country it is made and sold (profit is much less than 10%), the Camry in this example is far more beneficial to the US than the Canadian or Mexican made US nameplate.
Indeed, it is!!!!
BMW has invested well over $1 BILLION in its manufacturing facility in upstate SC, and that doesn't include the additional $100's of millions that their suppliers have also invested.
Sorry to tell you, but no US based manufacturer has seen fit to make anything anywhere close to an investment in the community like that.
And, I'm willing to bet good money that the people living in the communities where Hyundai, Kia, Nissan and other foreign "branded" companies have located would echo the very same comment.
Unless you can demonstrate that the workers in these areas don't deserve a decent state of employment, then your argument falls FLAT!
The sheer amount of what I like to call "2 dimensional thinking" on these forums simply amazes me. Its like reading a book, but only being aware of the 2 pages the book is opened to... never stopping to understand there is so much more to the story.
You and I do agree that it's a good thing to help the local economy...which is partly a reason I've owned three new cars built at the GM plant near me. The fact that it is an American-owned corporation is a positive, not a negative, IMO.
Did they pay that amount. Or did the taxpayers of the state and other taxing entities pay large amounts to subsidize the plant? In most cases very expensive incentives have been given to get the plants to locate. The companies have the Southern states bidding against each other.
2014 Malibu 2LT, 2015 Cruze 2LT,
I do think some of our disagreements on this board depend on where you live. If you live near a plant making foreign brands, you are more likely to see buying one of them as being good for the country. If you live near a Big Three plant, like I do and always have, it's the opposite.
So, for me, it's about:
1) Liking the product
2) Wishing to help America first and foremost
So, for me, it's about:
1) Liking the product
2) Wishing to help America first and foremost
For me, I have to like the product first and foremost. I'm not going to buy something I don't like and I'm certainly not going to keep what I'm not happy with.
I grew up in a family of Ford and GM vehicles and that is what I've primarily bought. But, I got burned along the way with more than one bad Ford and GM vehicle. I did buy a couple of foreign vehicles, that I really liked. In my experience, they were flat out better than the domestic vehicles I had previous and at the same time. When I say better, I mean built better, drove better, and overall performed better.
That said, the domestics seem to have some competitive products out. GM is still a sore spot with me and right now, I like what Ford is doing. If I was in the market for a vehicle today. I'd probably look at Ford first.
Like many of the GM faithful on these boards that love GM, I tend to be that way with Ford. The only difference seems to be I realize that Ford has built lots of junk and was deserving of being on the brink of bankruptcy. 5-10 years ago, I pretty much had written Ford off as a vehicle I'd ever buy again.
And I'm supposed to feel good about that? Why? Just look at Bob Nardelli. First he runs Home Depot into the toilet. To appease stockholders he receives one of biggest compensation payoffs in US History (in excess of $200 M) to disappear. In a brilliant move Chryco hires Nardelli despite his lack of automotive background and prior track record. He then puts his magical managerial skills to use at Chrysler with predicable results.
I don't know about you, but as a US taxpayer I feel just great that my (our) money stayed in the US and propped up Nardelli, Wagoner and their ilk.
Gogiboy
Well, DUH!!!
The largest industry in the US has the most employees. And, since the Big-3 had close to a century head start on the foreign competition (and were allowed a closed market by law ...ie., tariffs...up until the 60's), its no surprise they have more employees. But, lets be real here....Many of those very same suppliers also supply those foreign brand products as well.
The 2-dimensional thinking comes in when folks like you expect that trend from the past to carry forward forever.
Want a great example or two of that not happening?
Kodak. Or, Poloroid. Or, Betamax. Leer 8-track tape players. Sony walkman.
Frankly, this entire argument reminds me of one I had with my uncle a few years back, when the company he owned went out of business. He whined that "times just passed me by". I, along with many in my family, saw it differently. I told him "The times didn't pass him by, he simply stood still while time moved onward".
BIG DIFFERENCE!!!!
But, while we're at it, what's your response to why Michigan (a hotbed state of "Buy American") has so many Wal-marts?
Do the Wal-marts in Michigan sell only US branded/made products?
I have grown tired of these circular arguments you and others continue to put forward, so I'll simply say this...
Unless (or until) the US government passes laws to dictate what we purchase, the US consumer is going to buy what he likes the best, be it because it is perceived by the customer to look the best, work the best, has the longest lifespan, has the best price.... the list goes on.
So, my advice to the whiners here is this: Spend less time whining about a "perceived" problem and more time 1) understanding why the US consumer buys non-US made products, and 2) convince the US manufacturers to meet those specifications.
You do that, and your "perceived" problem vanishes.
I'llq bet I have, over the years, seen 1000's of car sales transactions, and I have YET to see a single one made because the dealer had a gun to the buyer's head. Nor are these people buying foreign-branded products in order to do something unpatriotic.
If you can't understand that, or refuse to accept it, then all you really are interested in is whining in a public forum.... nothing more.
Again...I figured out long ago that those who believe they are the most 'enlightened' are often the most narrow-minded, in that any difference of opinion from theirs is mocked and ridiculed.
I have never tried to make anyone think they should not buy a foreign brand...only why I choose not to. But the other direction...OMG.
Were some incentives given?
Yes, in SC, incentives are given, just as every other state in the US does.
Do a little research, instead of making wild accusations. You might actually learn something.
That's true with some suppliers anyway. When GM was in the midst of bankruptcy, I talked to my BIL who works for a tool and die shop in Michigan. He deals with Ford, GM, Chrysler, Honda, and Toyota among other manufacturers. I don't know if he does any business with the other transplants. Anyway, I asked him how bad would GM possibly being gone hurt him and the company he works for. He said they'd be okay, they did enough business with other manufacturers that they could afford to lose GM (granted it would hurt). But GM going down wouldn't take down the whole operation. He drives a Nissan Maxima BTW.
Did they pay that amount. Or did the taxpayers of the state and other taxing entities pay large amounts to subsidize the plant?
Gee, even if it was $1B it is 1/60th of the amount that GM has been paid to survive. So you pay $1B and get a new plant and new services for an area, or you pay $60B to bail out a company with a failed business model - not even comparable! :shades:
I disagree, but at least I appreciate your style!
$1B=one plant in one area
$60B=multiple plants and suppliers across the entire U.S.
$60B=multiple plants and suppliers across the entire U.S.
The falacy in that argument is that SC DIDN'T spend anywhere near $1 billion for the BMW plant, but the US taxpayer IS on the hook for $60 Billion for GM and C.
Talk about comparing apples and oranges....
I also read that SC spent "millions" to get that one plant there, and that BMW leases its site for $1 a year and pays no state or corporate profits tax and no land tax to Spartanburg County, which built it a $40 million aircraft runway.
Thanks!
$1B=one plant in one area
$60B=multiple plants and suppliers across the entire U.S.
I guess it boils down to one's feelings about capitalism. I have a very strong belief in a market system. The strong survive and the weak should fail. I'm embarassed that if I go to Europe I can get a BMW or Audi, yet US cars are big soft and hulking (although Ford has some good stuff over there). And when you look at 30 years of mismanagement, a union that sucks a company dry, and decades of products that most of us would admit were inferior (at least most of them) -- well I find it offensive to the workings of a free market that we would spend $60B of taxpayer money to prop up such failures. It goes against everything that our economy should stand for.
I know that if my kid was a tatooed drinking druggie 20 year old, I would not buy him/her a house or give him/her a car because it would "help them". I'd bite the bullet, feel a parent's pain, and kick them out of the house to make it on their own.... or not.
Ironically, I would disagree with that, only because recent history (within the last 25 yrs) seems to disprove that.
In 1965, Buick produced 653,838 cars. That was spread over at LEAST 8 different plants. (there were 8 plants for the full sized cars, not sure how many more for the A bodies.) And that doesn't even include the number of other GM makes produced at those plants.
In 2009, Buick produced 102,306 cars. Thru July, they have put out 86,831. They also use far fewer plants. This has me wondering if GM's downfall, and also the troubles we have seen from Toyota and Nissan, may be due to the sheer volume of vehicles coming out of Flagship plants in Georgetown Ky, and Canton Miss (Nissan).
I mean, if those plants are (as the GM plants were) going full bore 24/7, could that be a major factor in the dropoff in quality??
Read the Factory Milestones section (under the NewsCenter Tab). The plant is currently undergoing an additional $500-750 million expansion.
Another interesting link...
http://bbr.unl.edu/aubertest/documents/BMW_Economic_Impact.pdf
As for the airport, GSP jetport (what it was called back then) existed long before BMW arrived. I was flying Eastern and Southern airlines out of GSP way back in the 1970's. GSP was an idea of Roger Milliken and some other far-thinking executives from back in the 1960's.
http://en.wikipedia.org/wiki/Greenville-Spartanburg_International_Airport
http://www.gspairport.com/images/downloads/GSP_Economic_Impact_1009.pdf
Personally, I'm not so ticked that $60 B was spent in as much as I am that the industry was completely on the rocks before anything was done. The executives knew, yet they continued taking huge salaries. The unions knew, yet kept demanding unreasonable concessions. The dealers know the product quality was horrible, but never banded together to confront the manufacturers.
In a ironic twist of the game "musical chairs", everyone continued playing the game, hoping they wouldn't be sitting in a chair when the music finally stopped.
If you cut your arm, how many pints of blood do you lose before you think about getting a little help from someone? Or, do you simply blame someone else for the loss of blood?
After all, it was no surprise... at least, it wasn't to anyone outside the government or the industry.
Surely we could have made adequate changes back in the 80's and 90's that would have averted (or, at a minimum, greatly reduced) the debacle as it actually occurred. I clearly remember reading about the huge debt and legacy costs coming due well back in the 80's.
Instead, we drove off a cliff and attempted to patch things up on the way down to the ground below.
Problem is "now is then" it seems to me. IOW, nothing much changed except the debt load is way down IMHO.
So, for me it's about:
A) Liking the product.
Regards,
OW
I mean, if those plants are (as the GM plants were) going full bore 24/7, could that be a major factor in the dropoff in quality??
Yes, because the controls would not be capable of ensuring high quality back then and are probably far more capable today. However, there is a high water mark after which failures are missed. Toyota learned that big time. They are in a better position to recover because of their top notch consistency which GM does not enjoy.
Unfortunately, GM could gain back close to that mark if their TOTAL quality were even close to the quality of Toyota and Honda. After all, they are the Hosts in the USA.
You loose here and you're toast everywhere. The business model was doomed and their biggest issue was complacency while Rome was burning. Looks like Toyota missed the boat but the complacency is not even remotely close to GM's historical execution. I do agree Toyota has the exact same size issues.
Too bad it's the idiots who buy their products which were the ones to bail them out, myself included big time!
Let me know how you would feel if they repeat the mistakes as Chrysler already has.
Regards,
OW
In the second quarter of this year, Honda built 236,819 cars in the U.S., a dry bit of data until you realize that in the same time frame it built 236,559 cars back in Japan. It’s a tiny edge. It may not last for the whole year. But it’s the first time that Honda produced more cars here in the U.S. than at home.
The background is also compelling: Japan’s home market continues to shrink, while U.S. sales appear to have bottomed out and are experiencing a slow uptick. According to the Japan Automobile Manufacturers Assoc., which keeps tab of such things, its members now operate 31 U.S. manufacturing plants and have 34 major R&D facilities here.
Automakers are truly international businesses; all of them. For example, a Toyota and a Honda built here beat out the likes of Ford, GM and Chrysler in terms of domestic content. Top of the list compiled by Cars.com is the Toyota Camry built in Georgetown, Kentucky, and Lafayette, Indiana. Second is the Honda Accord, among those 236,819 cited above, built in Marysville, Ohio, and Lincoln, Alabama. First “domestic” nameplates are the Ford Escape and Focus in third and fourth place, then the Chevrolet Malibu and, further down the list, the Dodge Ram 1500 truck.
Domestic parts content information is posted along side the window sticker of all new cars; this, as part of the American Automobile Labeling Act of 1994. Identified is the percentage, by cost, of parts originating in the U.S. and Canada.
Like it or not, Global Auto Manufacturing means just that: Everywhere there is investment. At the end of the day, the products speak for themselves
Honda Builds More HERE than THERE
Regards,
OW
Yes. Its the 21st Century, and that is how businesses of this nature and size exist.
The old days of Nationalism, at least as it related to automobile construction.... are long gone.
They all locate in multiple countries, and they all deal in multiple currencies... which sometimes, can mean the difference between a profit and loss in and of themselves.
Adapt or die, especially in the billion $$$ businesses. Its really that simple.
I hope you're not calling me personally an "idiot."
That would be a personal attack.
I didn't say anything about billions in my post.
>Do a little research, instead of making wild accusations. You might actually learn something
Before calling other people "idiots," please take a look. You might actually learn something.
>$$$Billion
Now that you suggest it, that may be close to what poor SC has given a company which has bounded healthily in the money since building the plant in SC. Add up all the benefits paid by the state and others probably is close to that in subsidies.
I've noticed a trend of criticism of other people rather than discussion of the topics:
Post 9675:
"The sheer amount of what I like to call "2 dimensional thinking" on these forums simply amazes me. Its like reading a book, but only being aware of the 2 pages the book is opened to... never stopping to understand there is so much more to the story. "
Post 9685:
"If you can't understand that, or refuse to accept it, then all you really are interested in is whining in a public forum.... nothing more. "
Others have a right to their opinion without being treated in a pompous manner. Try just discussing the topic.
######
######
Incentives for BMW off the top,
$115 million
$1500 per job
Promises of "stable" tax rates
And this tidbit full of the actual incentives:
"But, thanks to incentives, BMW's South Carolina plant has escaped millions of dollars in taxes and costs that industrial companies expect to pay in developed nations.
"BMW paid only $1.4 million in state taxes of all kinds in 1998 and $6.7 million in local taxes, mostly building and equipment taxes to one small school district. Together, that's less than 2 percent of what the company paid in worldwide taxes for the year.
"Government giveaways permeate BMW's finances.
"South Carolina taxpayers spent $40 million on a runway for BMW's planes. They furnished millions more for BMW worker "training," including whitewater rafting trips for BMW executives. The company pays $1 a year to lease its $36 million piece of land. It pays no land tax to Spartanburg County. Building and equipment tax on the first phase of BMW's plant is 43 percent lower than what established businesses have to pay. Tax discounts on BMW's second phase are even bigger -- 62 percent -- even though the expansion couldn't have been built anywhere but Greer.
"BMW has never paid South Carolina's 5 percent tax on corporate profits and shows no signs of doing so for years. Start-up and depreciation costs will delay profitability "until early in the next century," said BMW spokesman Bobby Hitt. But even then, tens of millions of dollars in incentive credits will keep BMW immune to income taxes for much longer."
And I don't think I saw mentioned in the original round of giveaways, the cost of training programs for employees is usually picked up by the bidding state.
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And for the current addition:
Infrastructure
:Full details of the incentive package haven't yet been fully disclosed. State officials, however, did say that BMW's project support will include a $35-million I-85 interchange to handle the added traffic at the automaker's plant.
"Other infrastructure support will likely include a wastewater treatment plant, auto industry analysts speculate.
"One of the deal's key supportive elements, however, bolsters intellectual infrastructure. And that support reflects the new role that BMW envisions for the Greer operation.
"South Carolina is donating $25 million to nearby Clemson University for the school to create an automotive engineering graduate program. BMW, in turn, is donating $10 million to the Clemson program.
" "As we look to the future, Clemson's graduate program will create an additional quality source of engineers for BMW, as well as for the larger automotive industry," Dr. Leube said"
2014 Malibu 2LT, 2015 Cruze 2LT,
SC simply doesn't have that kind of money to throw around, so IMO, no rational person would think it would. I agree, I could have worded it better.
So, for that, I humbly apologize.
But actually, this was the earlier "exchange":
>BMW has invested well over $1 BILLION in its manufacturing facility in upstate SC
Did they pay that amount. Or did the taxpayers of the state and other taxing entities pay large amounts to subsidize the plant? In most cases very expensive incentives have been given to get the plants to locate. The companies have the Southern states bidding against each other.
Every state gives incentives. BMW got them, and more recently, Boeing did as well so that it would agree to locate here in SC (Charleston). I never claimed otherwise. And, its not isolated just to the southern states. See below what GM got from Michigan.
Take a look at these links to get the other side of the story...
http://www.bmwusfactory.com/#/environment/
Read the Factory Milestones section (under the NewsCenter Tab).
Another interesting link...
http://bbr.unl.edu/aubertest/documents/BMW_Economic_Impact.pdf
Would you spend a couple hundred million to make a few billion?
I think most would respond with a definite "YES".
Unfortunately for the US taxpayer, we seem to (as a country) have a system that encourages companies to "game" the states for the best deal around. Like it or not, that's how the "game" is played. Don't think the Big-3 are immune to this sort of behavior, either. As an example...
http://www.siteselection.com/ssinsider/incentive/ti0007.htm
Michigan's $256 Million in Incentives
Helps Spur GM's $1 Billion Investment
Michigan, continuing the aggressiveness that's made it a potent business expansion player, has landed another behemoth. State and local governments put together a US$256 million incentive package that helped entice General Motors (www.gm.com) to build two plants just outside Lansing. The two plants will add 2,800 jobs to GM's Lansing-area work force.
In some ways, it was déjà vu all over again for Lansing. In January, GM broke ground on a $558 million luxury car plant in the Lansing area.
New Law Rewards Existing Employers
In Designated Areas for Brownfields Redevelopment
One key part of the incentive package only fully took shape on June 6.
That was the day that Gov. John Engler signed into law a bill that allows the Michigan Economic Growth Authority (MEGA), which is administered through the Michigan Economic Development Corp. (medc.michigan.org), to award tax credits to existing employers that locate in a brownfields area. Previously, brownfields redevelopment tax credits could only be granted to employers who brought new jobs to an area.
Commented Engler, "This project wouldn't have been possible without the support of the Michigan Legislature. Their approval of legislation, which allows the MEGA credit to be used for job retention, kept more than 28,000 jobs in our state. This is a tremendous victory for Michigan and Lansing area workers and businesses." (According a University of Michigan study, GM's newest investment in the Lansing area will retain an estimated 28,561 combined direct and indirect jobs in Michigan.)
Putting the revised legislation into play in a major way, MEGA awarded GM a job creation tax credit worth an estimated $61.8 million over a 20-year span.
GM Spokesman: Incentives Help
'Make Valid Business Case'
Smart players, of course, don't make location decisions on incentives alone. At most, the savvy ones use incentives only as a tiebreaker between sites of equal quality that meet the business case.
GM, history suggests, is certainly a knowledgeable operator when it comes to site selection. Nonetheless, the incentive package, particularly the extension of the brownfields job-creation tax credits, certainly seems to have made an impression.
After the entire incentives package was made public, GM spokesman Jim Hopson commented, "This goes a long way toward GM making the valid business case for making the investment in Delta Township." (Lansing is part of the Delta Township.)
Commenting after the GM Board of Directors officially approved the expansion that the automaker has earlier proposed, Lansing Mayor David Hollister said, "This announcement marks the completion of our committee's efforts in obtaining a second plant. Throughout this process, every marker we were required to complete was met on time.
"We have set the stage for this community to become the only community in the world with two new automotive manufacturing facilities," Hollister added.Here's a capsule look at some of the other major planks in GM's $256 million incentives package:
Tax abatements on real and personal property taxes:
The city of Lansing offered GM tax abatements on real and personal property taxes worth about $165 million for up to 25 years.
Job training assistance: The state pledged up to $1,000 each for each of GM's 2,800 jobs, for a total of $2.8 million, and it committed $4 million in funds to build a new Michigan Technical Education Center to support the project.
Infrastructure improvements: The state, the city of Lansing and Delta Township will make infrastructure improvements to the proposed site at an estimated cost of $28 million.
Abatements of the state education tax: Michigan is providing an abatement of the state education tax valued at $23 million over the lifetime of the local property tax agreement.
Lastly, if you wish to take a shot at "incentive giving", I'm game. I'm actually in the group that feels they should be illegal. I've seen far too many companies play one state (AND politician) against another, and US companies are equally as bad (or good, depending on how you look at it) as foreign ones.
Living in the Upstate, however, I can personally attest to the improvement in the area since BMW located here, and I can promise you the vast majority of money did NOT come from the state. It simply doesn't have the income nor the resources to pay it out.
How about giving us a link to the sources you quoted? I'd like to read them.
And, just out of curiosity...
One of the deal's key supportive elements, however, bolsters intellectual infrastructure. And that support reflects the new role that BMW envisions for the Greer operation.
"South Carolina is donating $25 million to nearby Clemson University for the school to create an automotive engineering graduate program. BMW, in turn, is donating $10 million to the Clemson program.
Do you take issue with that? Why?
http://www.siteselection.com/ssinsider/incentive/ti0210.htm
From the article...
BMW has expanded so rapidly in South Carolina that one in very six cars that the German automaker sells is made in the state. Last year, the Greer plant rolled its 100,000th BMX X5 off the line.
New South Carolina Incentives Spur BMW's $400M, 400-Job Expansion
By JACK LYNE • Site Selection Executive Editor of Interactive Publishing
GREER, S.C. – BMW (www.bmw.com) picked an apropos way to celebrate its 10th anniversary in South Carolina (www.callsouthcarolina.com): It announced that it's adding 400 workers in a US$400-million expansion of its sprawling 2.4-million-sq.-ft. (222,960-sq.-m.) plant in Greer, S.C. The expansion continues the German automaker's life-in-the-fast-lane modus operandi since it first announced that it was coming to the Palmetto State in 1992. With the 400 added employees, the total work force at the huge production operation in the Greenville-Spartanburg metro (www.greenvillechamber.org) will swell to some 4,900 workers. And the $400 million in new capital expenditures will push BMW's total outlay for the plant past US$2 billion. The company's expansion in South Carolina has been on such a fast track, in fact, that one in every six BMWs sold worldwide is now made in the state.
"Our decision to place our U.S. plant in South Carolina has proven to be a successful one as we strive to keep up with customer demand for our X5 sports activity vehicle and begin to build the new Z4 roadster," BMW President Helmut Leube said in announcing the project.
Current demand is straining the plant's resources, BMW officials explained. Employees at the Greer facility are working 110 hours a week on two shifts; that's 65 percent of a week's 168 total hours, and it's almost the equivalent of a three-shift setup.
With the added employees and investment, the Greer plant's 2003 production total will rise to 155,000 units. The facility's projected 2002 production will total 130,000 units, according to company officials.
Bond Act Greased Project's Skids
BMW, however, wasn't the only party in this deal focused on meeting demand. State lawmakers worked to meet the needs of South Carolina's corporate clientele, in the process giving the automaker's expansion a forceful nudge.
"South Carolina must go beyond teaching basic skills for manufacturing if our goal is to move into a knowledge-based economy," Commerce Secretary Charles Way (pictured) said.
That nudge came from the General Obligation Economic Development Bond Act, which took effect on May 15th. The South Carolina legislature recently passed the bill, which provides infrastructure to boost economic development.
BMW was no idle sideline observer in the legislative change. The automaker earlier this year lobbied for a state law to reward companies that undertake major expansions.
And the new law is a virtual blueprint for BMW's expansion. The bond act specifies that qualifying programs must involve a $400-million investment and 400 new jobs - precisely the numbers that BMW nailed with its expansion.
"The General Assembly understood that infrastructure development was essential in bringing large projects of a minimum of $400 million and 400 jobs to the state when it passed the Economic Development Bond Act," Secretary of Commerce Charles Way said after BMW's announcement. "We appreciate their ability to see how good planning today produces a high yield for tomorrow."
BMW, state officials said, will qualify for as much as $80 million of the $250-million economic development pool created by the General Obligation Economic Development Bond Act.
Aid Also Bolsters Intellectual Infrastructure
Full details of the incentive package haven't yet been fully disclosed. State officials, however, did say that BMW's project support will include a $35-million I-85 interchange to handle the added traffic at the automaker's plant.
Other infrastructure support will likely include a wastewater treatment plant, auto industry analysts speculate.
One of the deal's key supportive elements, however, bolsters intellectual infrastructure. And that support reflects the new role that BMW envisions for the Greer operation.
South Carolina is donating $25 million to nearby Clemson University for the school to create an automotive engineering graduate program. BMW, in turn, is donating $10 million to the Clemson program.
"As we look to the future, Clemson's graduate program will create an additional quality source of engineers for BMW, as well as for the larger automotive industry," Dr. Leube said.
"We looked for areas where our faculty's strengths and interests overlap with the state's economic development needs," Clemson President James Barker said of the university's new automotive engineering graduate program.
Clemson President Emphasizes
Universities' Role in Economic Development
The Clemson program dovetails with BMW's strategy to reposition the Greer plant, moving it beyond its current manufacturing focus into design and engineering.
"BMW envisions this as the next generation of leaders who will lead the country in designing customized vehicles," Clemson President James Barker said of the university's automotive engineering program.
The Clemson program also represents a shift in the state's economic development strategy, Way said.
"South Carolina must go beyond teaching basic skills for manufacturing if our goal is to move into a knowledge-based economy," he noted. "Clemson's graduate engineering education center is a tremendous step toward building our new economy by educating our future work force. State support for Clemson's program is imperative if we want to reach our goal of increasing wages and improving the lives of South Carolinians."
Automotive and transportation technology is one of eight target areas in which Clemson is aiming to create world-class programs. In picking its target programs, the university made bolstering the state's business climate a major consideration.
"In identifying these emphasis areas, we looked for areas where our faculty's strengths and interests overlap with the state's economic development needs," Barker said. "This partnership demonstrates the role strong research universities can play in economic development."
Second Plant in the Cards?
Further expansion could be in the cards for BMW's South Carolina plant.
The automaker in the spring of 2001 offered a glimpse of the shape of things that could possibly come. That glimpse came in BMW's application for an air-quality permit for the entire 1,039-acre (420.5-hectare) Greer site. The permit application s
Aside from direct cash grants to a company, I would guess that many incentives that a given state may give to a company to build a plant there may actually cost little or nothing at all, in the short run, and may get the state something back in the long run...
Example: say State A gives Company X a property tax break for 10 years so the Company builds an auto plant in the state...they take 250 acres of rural land, WHICH WAS GENERATING ALMOST ZERO TAX REVENUE FOR THE STATE AND COUNTY ANYWAY, and let Company X have it for zero property tax for 10 years...what has the state and/or county lost???...nothing...what has the state and or county gained???...jobs for the locals, who, by earnings more, will probably build real homes on real land (taxable, by the way) instead of buying run-down mobile homes with almost zero tax value...restaurants move in to serve the plant employees, along with the vendors (and THEIR employees) who also have better jobs, plus the mall that gets built 5 miles away, and all that retail sales tax, and so on, and so on...
OK, so the state may build one or two Interstate exits, run a railroad spur over to the plant, and maybe even upgrade an airport runway...this, IMO, is pennies for what the auto plant does to upgrade the area for about a 25 miles radius...
Now if the state gave away prime real estate in a downtown metropolis, you might have an argument, but I think they usually give away rural land, somewhere near an interstate highway, probably near some kind of railroad track, so the land was worthless until the plant went in, and the minor upgrades may not cost as much as one might think...it may really be a small investment by the state for the big payoff later on, and that "later on" may actually start when the plant opens...then, 10 years later, when the property tax kicks in, could it be a huge windfall for the small investment???
Wherever Hyundai makes Sonatas, I would bet that plant is humming...just not in Spring Hill, TN, where GM used to make Saturns...I would gamble on a plant for an import before I would gamble on a Big 3 plant, because the imports, IMO, have a better chance of surviving the next ten years (to pay that property tax) whereas the Big 3 may be gone in 3 years...
Lemko, better buy a few more Caddies, because they may go away soon...
Do I recall a plant built in Alabama for Mercedes? The cost of subsidies was such that the state could have paid the people for not working more cheaply. The cost was on the order of $150,000 per job? I haven't researched this year; I'm going on memory and may be wrong, so since you're closer physically to Alabama you may be more aware of the history of that one.
I recall the Ford plant build in a county where I lived. They forgave the $500,000 tap in fee required for the water system that was relatively newly developed in the county. The rest of us were paying the water bills and the usual tap ins. Oh, that Ford plant is closed now. And that's the county water system that said one of my last payments for water came in a day or two late by mail and refused to drop the $1.50 penalty.
2014 Malibu 2LT, 2015 Cruze 2LT,
Some questions for you...
Do you think a successful company should be penalized for exceptional execution? Are you of the mind that a poorly run company is entitled to taxpayer funds, but a successfully managed one isn't? Should we regenotiate/back out on agreements made with companies if they end up being really successful .vs. moderately successful?
And, most importantly, would you invest $10 in order to receive a payback of $100 over the next ten years? $50 to get $100? How much, if any at all?
Actually, Marsha7 pretty much hit the target with her posting.
But, I'll say it again. I feel that ALL incentive packages used to lure manufacturers, retailers, etc. should be outlawed, or at least, standardized, so that they CAN be compared with one another.
And, as you pointed out in the MB/Alabama example, not all incentive deals have the desired outcome. I believe NC and Dell Computer may be another failed example. Let's face it... Not every "at-bat" produces a home run.
Frankly, IMO they have gotten out of hand, and its something a company expects to be offered before it will even discuss locating in a state. It IS an entitlement expectation. And, that mentality existed LONG before BMW even first considered building a US plant.
And, to a large degree, they do make sense.
Many get hung up on companies getting property tax exemptions and transportation improvements made, but neglect the income produced by the tax on wages, properties owned by the workers, and the increased spending by the employees in the community (sales taxes).In the case of an automaker, there is also the tax proceeds that come from the suppliers that locate near the plant, most of which get NO incentive package at all.
The real problem is that every package is different, so it makes it quite difficult to compare one deal with another.
But, as I posted 3 or 4 posts ago, all the states do it. South Carolina, Michigan, etc.
As I recall, Kia located a plant in West Point, Ga.
What was the economy like 5 year before the plant located there, and what is the economy there today?
Isn't that sort of a laughable statement compared to GM needing $60B to survive? Talk about dependency.
IMHO providing tax incentives to bring substantial business into an area is good government policy. No different than a temporary lowering of a tax rate to spur an economy. Not the same as propping up a failure.
It hasn't been long enough for me to forget--400,000 U.S. servicemen killed. 400,000. Only a little more than a decade before I was born....not 100, 200, or 300 years ago.
I know, someone will post and say they know a POW who drives a Benz or Lexus. I'm glad they can overlook it. I can't. I'm also aware of the political incorrectness of such a statement.
And for those who will roll their eyes and make comments about hanging onto something for too long, I can make the same remark about the constant comments about long-ago UAW abuses mentioned in this forum.
I have complete respect for your memory of WWII. However, a failed company has nothing to do with that war and the fact that global competitors buried GM as well as the economic conditions they were not ready for can be looked at like reverse patriotism at GM and C. They had the responsibility to build the best and they failed. Chrysler X2. Yes, Chrysler was weeded twice. Buy American?
Regards,
OW
I think it's just a given that that faster you slap the cars together, the more problems you're going to have. However, 1965 was also a pretty special year. Very rarely in automotive history has there been so much that's all-new in the same year. With the exception of Imperial, Lincoln, and the Cadillac 75 limo, every single full-sized car was all-new. The Mustang was new as well (although introduced in April 1964). The Corvair was new. And the intermediate Plymouths and Dodges were heavily revised versions of those shrunken 1962-64 "full-sized" cars that were about 15 years ahead of their time.
So I think the fact that the majority of the cars were first-year designs, coupled with the fact that they were wildly popular, so they had to be thrown together quickly, made it inevitable that quality would slip.
Well, they saying "don't buy a car that is built on a Monday or Friday" had to start somewhere;).
When all of your competition is equally lousy, it doesn't matter so much.
I bought a '98 Ford SVT Contour brand new and it had numerous build quality and fit and finish issues upon delivery. When I received my SVT certificate it showed a build date that was on a Monday:( I loved the car, but once the extended 75k warranty was up, I had to get rid of it.