President Bush grants Loans to Domestic Auto Companies
I have to chime in here. The public flocking of the domestic auto companies has been a healthy exercise for all. And today’s announcement by President Bush was the absolute right thing to do for the auto industry and the country - and history will prove it correct.
Let’s face it; our free and open political system in the USA has caused much of the current dysfunction in the auto industry. Have you ever asked yourself why Toyota, Honda, BMW, etc chose to build assembly plants here in the USA? The country with higher labor costs than virtually any other country on the face of the earth? TAXES and INCENTIVES. Yes, our own government (mostly state government) set out in a bidding war over the past decade to attract these foreign companies to build assembly plants in their states to attract new jobs. They gave away property tax abatements, job creation incentives, enterprise zone grants and more.
The money granted today to GM and Chrysler amounts to an interest expense of about $16,000 per U.S. job at these companies. That is serious taxpayer money. However, last year VW got $288,000 per job created at their new plant in taxpayer subsidies. And Toyota got over $150,000 per job created at their plant in Texas. It’s time to wake up and recognize we have a problem here in the U.S. when individual states can create such inequities in our national economy. Read more »







