State and Local Gov'ts Have Already Bailed Out Foreign Carmakers

Last week, as we all know, Congress rejected a $14 billion bailout for the "Big Three" automakers. So now President Bush must decide whether to offer a bridge loan or some other form of relief with all kinds of strings attached to an industry whose car and truck sales have declined at a whopping, 43.7, annual rate.

Foreign automakers actually support a bailout, both to prevent a disruption in autoparts and to deter some Indian (Tata Motors) or Chinese (Geely) auto manufacturer from buying up a US company's assets and posing a low-cost threat that will just depress their prices.

But isn't that just the American way?

Between 1980 and the present, state and local subsidies to foreign-owned auto assembly plants total $3.6 billion, according to Good Jobs First, a non-profit, non-partisan research center that has consistently condemned corporate welfare.

"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," says 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."

Here's a listing of these corporate subsidies.

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

According to LeRoy, these data do no account for inflation or include any estimate of subsidies granted to the hundreds of foreign-owned auto supply companies that have located in the same areas, virtually all of which were also heavily subsidized.

Did Big Three Try to Buy Their Bailout?

MAPLight, a nonpartisan group that "illuminates the connection between campaign donations and legislative votes," has cast a spotlight on the bailouts the Big Three have already provided to Congressman who supported the $15 billion bailout. Auto manufacturers, auto dealers and labor unions gave an average of $74,100 in campaign contributions, over five years, to each Representative voting in favor of the auto bailout. That's 65% more money than the $45,015 average to each Congressman opposed.