I’ve written before about the unholy relationship between Chrysler Corporation and the state and local governments in Missouri. It has to do with Chrysler’s threat to close down plants in the St. Louis suburb of Fenton, and the state’s desire to keep them open. This should not signify that the state has any interest in producing automobiles, but in milking a cash cow.
Details of the latest arrangement between the carmaker and the authorities were disclosed in the St. Louis newspaper. Interesting — at least to me — is the implication, from the headlines, that the state and local governments, and Chrysler are on an equal footing. The main headline says, "Chrysler signs off on deal." Well, that’s true enough. Beneath there are three sub-heads: AUTOMAKER has said it wants to invest up to $1 billion at plants, FENTON is willing to kick in up to $46 million in tax abatements, and MISSOURI announces it will provide $32 million in additional incentives. Did you get those verbs: "kick in," and "provide?" But who is "kicking in" and "providing?" Why, Chrysler, to the tune of a billion bux over the next decade or so. That’s a nice piece of cash! What the local community, Fenton, is willing to do is allow Chrysler to keep 46 million of what the automaker might, navely, have thought it was its own in the first place: its return for manufacturing automobiles. It isn’t as though Fenton was going to seize automobiles worth 46 million — heaven forbid! No, Chrysler could manufacture, ship and sell the cars — in other words, do ALL the work, and then be allowed to keep 46 million of the proceeds that would normally have been taken by the local rulers. To call that "kicking in" is playing a bit fast and loose with the language.
Would you say that a mugger "kicked in" fifty bux if he found 100 in his victim’s wallet, and allowed him to keep half? It’s worse: the mugger in this case is bestowing his favors only upon the promise that the victim invest what he’s allowed to keep, so that the mugger can encounter him later, with even more money in his wallet. Talk about generous! It must be the Christmas season!
It’s similar with the state of Missouri, which is "providing" 32 million, half of which will be in the form of tax credits; i.e., allowing the company to keep what is its own. The other 16 million will be used by the state to train employees, although what the state knows about training automobile workers is hard to imagine.
Actually, Missouri is letting Chrysler off pretty easy. In neighboring Illinois, the state has offered 36 million in incentives to Chrysler, provided the company spend half a billion to expand its plant in Belvidere, and agree to employ an additional 1000 workers. The local arrangement doesn’t require Chrysler to take on any more employees, although the state of Missouri is willing to spend 16 million to train them!
Chrysler has entered into a similar arrangement (bribe?) with the state of Michigan, promising to spend another half billion at its plant in Sterling Heights, in return for not being looted for a measly 19 million.
A question: does any of this suggest that Chrysler will be able to manufacture automobiles more efficiently? Will Chrysler products become more competitive with those of Japan or Korea? Or does Chrysler really care, as long as it can make suitable financial arrangements with the looters? If the answer is no, as I suspect it is, the result can only be that the state will continue to have a fat cow to milk, the workers will have their jobs, and the people will have more expensive products to buy. Is it the proper role of the state to pad its own pockets, and ensure jobs for the union workers who will be reminded of the state’s contribution when it’s time to vote? Wouldn’t the greater good result from Chrysler closing its less efficient plants, relocating them where it could operate more economically, thus making cheaper cars available?
Is bribery the fuel that powers the automobile industry? If so, that may be good for the government entities that profit from it, and the automakers who get a kickback of their taxes, but what about the rest of us?
But, come to think of it, who’s looking out for us?
Dr. Hein [send him mail] is a retired ophthalmologist in St. Louis, and the author of All Work & No Pay.
