REPORT: GM tells TN state officials it needs $200M to keep Spring Hill plant open
Provided that it survives bankruptcy, General Motors plans to build a small car somewhere in the US. The General has stated that it is investigating three sites to build the yet unnamed vehicle; Janesville, Wisconsin; Orion, Michigan; and Spring Hill Tennessee. GM previously announced that all three facilities would close, though it subsequently said that one location would ultimately reopen.
GM hasn't publicly laid out parameters for picking which plant will produce the new vehicle(s), but the state of Tennessee says that the biggest requirement is money. Governor Phil Bredesen reportedly told The Tennessean that GM has asked for at least $200 million to stay in the game, characterizing talks with the General as "Tell me how big of a check you're going to write." We're not talking tax breaks, either, as Bredesen is quoted in the article as saying:
"They don't care about tax credits and those other kinds of things...it certainly was a new look for me at how they're approaching this thing, which is absolutely, 'Tell me how big of a check you're going to write.'"GM isn't talking about its specific requirements for the small car plant, saying that the talks are "private discussions." Officials from Michigan and Wisconsin are following suit, but Tennessee is taking a different stance. Bredesen says the state doesn't have the kind of money that GM is asking for, and he told The Tennessean that "this is not a year in which I've got a spare couple of hundred million dollars from the rainy day fund to use for something like this."
GM has not yet come up with a timetable for announcing the winner of the small car facility sweepstakes. Thanks for the tip, JayP!
[Source: The Tennessean]
Reader Comments (Page 1 of 4)
Seminole 11:08AM (6/12/2009)
Quit acting like a bunch of thugs GM.
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why not the LS2LS7? 11:14AM (6/12/2009)
VW got $577M in tax breaks for their plant in Tennessee.
Mercedes got $300M from Alabama.
http://www.tradingmarkets.com/.site/news/Stock%20News/1853844/
Stop acting like VW and Mercedes, GM!
tankd0g 11:20AM (6/12/2009)
There's a difference between tax breaks for a successful business and charity to keep a bankrupt plant going for another year, and you know it.
zamafir 11:26AM (6/12/2009)
tankd0g has a point.
why not the LS2LS7? 11:28AM (6/12/2009)
tankd0g:
I dunno where you got the another year thing. That's just you applying your own opinions on top of the facts.
And no, I don't see a huge difference between getting money by not paying it out in taxes and getting "cashback". Either one comes out of the taxpayer's pockets.
GM has 3 prospective locations, they surely asked all 3 for the same incentives. They'll evaluate the 3 incentive packages they get. When you go to buy a car do you say "you know, I'm not going to ask for a better deal, it would be immoral"? I doubt it. It's negotiation, you ask for the moon and the other side has to be wise enough not to give it.
why not the LS2LS7? 11:32AM (6/12/2009)
zamafir:
If it's worth $200M to Tennessee, maybe they'll pay it. If it's not worth $200M (including the risks that GM will just shutter the plant anyway) they shouldn't. It's that simple. Whether tankd0g likes it or not doesn't come into it. I'd rather Wal-mart didn't get huge amounts of money from governments across the country, but my opinion in that matter is not needed either.
Dude 12:43PM (6/12/2009)
$150 million and a guarantee from GM that it will be a Non-Union plant. That would be my counter offer. Take it or leave it.
XJ 1:04PM (6/12/2009)
There is a difference. One is an investment. The incentives are to entice them to build a plant there and bring in new business and new jobs. The other is extortion. The plant's already there and they already received incentives when it was built. Now they are threatening to definitely close up shop UNLESS the state government can conjure up $200 million to save businesses and jobs.
BigWill 1:27PM (6/12/2009)
"And no, I don't see a huge difference between getting money by not paying it out in taxes and getting "cashback". Either one comes out of the taxpayer's pockets"
Ummm ... it's called the time value of money. When faced with two choices - pay $200 million now, or not collect $200 million over the next 10 years, the better choice is rather obvious. It's even more obvious if you don't have a spare $200 mil in your budget at the moment. If you still don't think so, ask Tipton, Indiana about how those upfront cash outlays can come back to bite you in the ass.
inline6 1:27PM (6/12/2009)
XJ,
They were going to shutter the plants anyway. They announced them publicly.
They were going to close up shop. They're simply shopping for the best offer of the 3 locations. They got the tax breaks already. This $200M is a sweetener. If TN doesn't go for it, fine.
GM doesn't OWE them a car plant.
tuxchown 2:02PM (6/12/2009)
Let Spring Hill rot in hell.
why not the LS2LS7? 3:59PM (6/12/2009)
BigWil:
So now you're just arguing about the amount?
tankd0g 12:58PM (6/13/2009)
As usual LS7, You are quite ignorant if you don't see the difference between taking cash out of your current budget and forgoing future tax revenue you didn't have coming in the first place until these plants decided to grace your fair state and provide new jobs.
Sea Urchin 11:11AM (6/12/2009)
I am out of words
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Ed 11:18AM (6/12/2009)
Congratulations. You've recognized that you generally have nothing to say that's worth reading. Please try to keep that in mind when preparing to post in the future as well.
BrianFL 11:19AM (6/12/2009)
Best news I've heard out of you
MoonRover 12:39PM (6/12/2009)
Thank Gawd, I hope your malady is terminal.
BigWill 1:29PM (6/12/2009)
I can't begin to express how relieved Rick Wagoner feels at this moment.
Wawadelco 11:11AM (6/12/2009)
Tennessee ran out of money after they gave it all to VW....LOL
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homunculus 11:11AM (6/12/2009)
gm has been sucking at the government teat for the entire 20th century (federal highway policy etc.).
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