Wednesday, February 23, 2011

Comparing the Memphis Incentives

Posted By on Wed, Feb 23, 2011 at 1:43 PM

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Taking a cue from Mayor A C Wharton, here's a look at what some other Southeastern cities and states reportedly paid to land big manufacturing plants and major employers in the last 18 years.

On Tuesday Wharton suggested that critics of incentives for Mitsubishi Electric and Electrolux read up on what other cities offer. I looked at car manufacturers because Wharton specifically mentioned Nissan and Hyundai at his press conference.

Conclusion: Memphis paid less for less.

Numbers are easy enough to find since public expenditures must be disclosed. But comparisons are harder to make and quantify when other factors are considered. How many spinoff jobs and industries? What average wage? What's the inflation factor for an incentives package given years ago? And how desperate was the city and/or state for new jobs and a good story to tell?

And in this case we're not talking apples to oranges, but cars to appliances and transformers. Or first-round draft choices and third-round picks, if you prefer.

One thing is indisputable. You have to pay to play. As then-NFL commissioner Paul Tagliabue said in icy-cold tones in Chicago several years ago when Memphis and Liberty Bowl Memorial Stadium finished out of the running for an expansion team, "You can win or you can be disappointed."

With those cautions, here's a look at some big car deals within 500 miles of Memphis and the two Memphis deals.

Electrolux, Memphis, 2010: $132 million in incentives. $190 million plant, 1,200 jobs.

Mitsubishi Electric, Memphis, 2011: $34 million in incentives. $200 million plant, 280 jobs.

Daimler/Chrysler (Mercedes-Benz), Vance, Alabama, 1993: $253 million in incentives. The $300 million plant opened in 1997 and employs 4,000 today.

Honda, Lincoln, Alabama, 1999: $158 million in incentives. $400 million plant with 1,500 employees.

Toyota engine plant, Huntsville, Alabama, 2001: $30 million in incentives, $220 million plant, 330 jobs, since grown to $514 million investment with 768 employees.

Nissan, Canton, Mississippi, 2002: $363 million in incentives. $1.4 billion plant with 5,300 employees. The initial announcement in 2000 reported $68 million in incentives, a $500 million plant, and 1,300 jobs.

Hyundai Motors, Montgomery, Alabama, 2002: $234 million in incentives, $1 billion plant, 2,000 employees.

Nissan, Franklin, Tennessee, 2005: $197 million in incentives for North American headquarters and 1,300 jobs. In 1982 Nissan built its first domestic assembly plant in Smyrna, Tennessee and later added its North American manufacturing headquarters and an engine plant in Decherd, Tennessee.

Volkswagen, Chattanooga, Tennessee, 2009: $577 million in incentives. $1 billion plant, 2,120 employees.

Toyota, Tupelo, Mississippi, 2007: $296 million in incentives, $1.3 billion plant, 2,000 employees.

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