Volkswagen builds vehicles in Hamilton County.Later this month, at Volkswagen’s Chattanooga plant, a massive layoff will occur. As a result of slower-than-expected growth in Passat sales, about 500 Chattanooga-area workers will find themselves jobless, most not knowing how – or when – they’ll get their next paycheck.
The VW layoffs are just the latest in a long line of examples of failed corporate welfare handout schemes that have left workers without jobs and taxpayers holding the tab.
In an attempt to lure – some would use the term “bribe” – new businesses, state and local governments have increasingly relied on a cocktail of tax breaks, free land, training grants, infrastructure handouts and giveaways of cold, hard cash. With states battling against one another to land employment hubs such as business headquarters, manufacturing plants and distribution centers, a race has developed. Unfortunately, it is a race to see which state can lavish very wealthy, well-connected companies with the most incentives in exchange for jobs. Those incentives, of course, are funded with our tax dollars, and they rarely result in the promised number of jobs or the anticipated long-term economic benefits.
The VW plant that is laying off 500 employees is the same VW plant that is the recipient of $577.4 million in government giveaways, the largest incentive package for any auto plant in U.S. history. The incentives included more than $350 million in state and local tax breaks; $81 million worth of land, courtesy of city and county taxpayers; $43 million worth of federal and state-funded road improvements; $36 million in state money for worker training and a training center; and $3.5 million in rail line upgrades, financed by state and local tax dollars.
And less than five years later, what do we have to show for more than half a billion dollars in handouts? Pink slips. Five hundred of them.