Foreign Auto Plants Have Received $3.6 Billion in Subsidies, Mostly from Southern States

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Responding to many queries, Good Jobs First released its summary of state and local subsidies given to foreign-owned auto assembly plants, totaling $3.6 billion.

“As elected officials debate aid for the Big 3, taxpayers have the right to know the full extent of government involvement in America’s auto industry,” said Greg LeRoy, GJF’s executive director. “And while proposed federal aid to the Big 3 would take the form of a loan, the vast majority of subsidies to foreign auto plants were taxpayer gifts such as property and sales tax exemptions, income tax credits, infrastructure aid, land discounts, and training grants,” he said.

Honda, Marysville, OH, 1980, $27 million*
Nissan, Smyrna, TN, 1980, $233 million**
Toyota, Georgetown, KY, 1985, $147 million
Honda, Anna, OH, 1985, $27 million*
Subaru, Lafayette, IN, 1986, $94 million
Honda, East Liberty, OH, 1987, $27 million*
BMW, Spartanburg, SC, 1992, $150 million
Mercedes-Benz, Vance, AL, 1993, $258 million
Toyota, Princeton, IN, 1995, $30 million
Nissan, Decherd, TN, 1995, $200 million**
Toyota, Buffalo, WV, 1996, more than $15 million
Honda, Lincoln, AL, 1999, $248 million
Nissan, Canton, MS, 2000, $295 million
Toyota, Huntsville, AL, 2001, $30 million
Hyundai, Montgomery, AL, 2002, $252 million
Toyota, San Antonio, TX, 2003, $133 million
Kia, West Point, GA, 2006, $400 million
Honda, Greensburg, IN, 2006, $141 million
Toyota, Blue Springs, MS, 2007, $300 million
Volkswagen, Chattanooga, TN, 2008, $577 million

Total: more than $3.58 billion

* total of direct subsidies to all Honda facilities in Ohio
** includes about $200 million for expansions of Smyrna and Decherd plants

List does not include joint ventures with U.S. companies

These data, drawn primarily from contemporary media accounts, are very conservative. They do not account for inflation; some would be worth far more in today’s dollars. They do not include any estimate of subsidies granted to hundreds of foreign-owned auto supply companies that have located in the same areas, virtually all of which were also heavily subsidized. Finally, they do not reflect later news accounts, which often place higher subsidy values.

Good Jobs First is a non-profit, non-partisan research center promoting best practices in economic development and smart growth, based in Washington, DC, with offices in New York and Chicago.

5 Responses to “Foreign Auto Plants Have Received $3.6 Billion in Subsidies, Mostly from Southern States”

  1. Darwin Says:

    The ‘subsidies’ for so-called foreign auto manufacturers were not granted by the U.S. government. The incentives granted by cities, counties and townships – were coming from the very people who who stand to benefit directly (mainly thru new jobs and local tax revenue) when the plant is located in their area – there’s a big difference between that and a blank check from DC. I see 20 plants as the beneficiary of 180M each, on average, spread out over 30 years. GM and Chrysler want 10 or 15 billion apiece – and they want it all right now. More will be needed later, of course.

    You don’t see the difference, do you?

  2. Joe Says:

    Darwin: Many of these state and city subsidies take money from programs that need to then make up the shortfall from federal funds – so federal dollars also subsidize these deals indirectly .

    Also, the going-forward value of these subsidies to communities as far as new job creation and increased local tax revenue are often inflated by economic development officials and local politicians.

    Bottom line, subsidies are subsidies, whether they come from my federal, state or local taxes.

  3. Anonymous Says:

    Several points: (1) To be fair it would seem that you should also show the comparable subsidies given to the US car companies by state and local governments to locate, upgrade, and/or retain their factories. (2) Subsidies are gone forever no matter what; loans are gone only if they cannot be repaid, and while I too am skeptical they will be in this case, nobody can be certain about the outcome; 20 or so years ago very few of us thought Chrysler would pay back the federal loans they received, but they did, so let’s at least give them a chance this time. (3) There is plenty of blame to go around in all of this debate, and it’s a good example of how tough it is to run a country, unintended consequences, bad decisions by management, and on and on, much of which sounds a lot like the $700 billion taxpayers are spending on the financial industry. These are tough times and require tough decisions, none of which we will like, but like medicine may be necessary.

  4. Apollo Daily Digest » Blog Archive » December 16, 2008: Obama Officially Announced His Energy Team Says:

    […] to Good Jobs First, many critics of the auto industry bailout have supported subsidies to foreign auto companies […]

  5. Car News Says:

    What others have said here is correct. Federal money hasn’t gone to supporting foreigh auto plants.

    The auto bailouts should have never have happened in the first place.

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