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Toledo
Blade...
Editorial:
The price looks right
Published: 9/2/2011
Ohio
taxpayers are learning what it
will cost to entice Chrysler Group LLC to add 1,105 good-paying jobs at
its
Toledo Assembly complex and to preserve at least 640 jobs at its
machining
plant in Perrysburg Township. The public investments appear worth
making.
This
week, the Ohio Tax Credit
Authority and Gov. John Kasich offered $16.3 million in state tax
breaks and
grants to encourage Chrysler to pursue both projects. That works out to
roughly
$9,340 per new or saved job -- but the automaker is talking about
initially
spending $365 million at Toledo Assembly and $72 million at the
machining
facility. Other investments could follow.
The
Toledo Assembly upgrade would enable
Chrysler to restore a second shift at the plant that makes Jeep Liberty
and
Dodge Nitro sport utility vehicles, expand production of the Jeep
Wrangler, and
build new, fuel-efficient models at the complex. A Chrysler executive
pointedly
reminded members of the tax panel that unspecified “other states” are
competing
with Ohio for that work.
The
investment at Toledo Machining
will prepare the Perrysburg Township plant to build next-generation
steering
columns and torque converters.
Local
governments also would cut
Chrysler’s tax bill to attract the expansion project. The City of
Toledo is
proposing tax credits, cash grants, breaks on water and sewer rates,
and road
improvements at the assembly complex.
Toledo
Public Schools and Washington
Local Schools have approved 15-year property tax abatements. Lucas
County is
offering to help pay to train new workers at Toledo Assembly.
These
incentives are not cost-free.
Tax breaks for Chrysler must be made up elsewhere, either in higher
taxes on
others or reduced public services.
But
the projects offer the prospects
of tens of millions of dollars in higher annual payroll at Toledo
Assembly --
and more tax revenue -- as well as the creation of hundreds of
productive
supplier, auto retailing, and other spinoff jobs locally. That’s an
appealing
exchange.
Chrysler
officials have been
circumspect about discussing the company’s product plans and timetable
for
deciding on the Toledo Assembly expansion. Such deliberate vagueness is
standard operating procedure for the auto industry.
At
the same time, company executives
are posing tough questions about how economically competitive the plant
complex, the Toledo area, and Ohio are. State and local officials must
be ready
to ask equally tough questions about how Chrysler will meet its goals
for job
and revenue growth here. They must tie the incentives tightly to
achievement of
those plans, and claw back the public spending if the company doesn’t
comply.
The
U.S. auto industry is making
heartening progress toward recovery, even amid a stubborn recession.
Toledo and
the rest of Ohio have every interest in reaping the benefits of that
recovery,
since federal tax dollars paid by its residents helped Chrysler and
General
Motors emerge from bankruptcy. Chrysler remains one of this area’s most
prominent corporate citizens.
Competition
among states to shower
incentives on employers can be wasteful and even counterproductive. But
if
state and local officials play the incentives game effectively, the
Chrysler
projects amount to a prize worth winning.
Read
it at the Toledo Blade
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