Is VW Chattanooga right or wrong to bypass Georgians?
No production worker from Georgia has benefited from the new VW Chattanooga plant, AJC staffer Dan Chapman is reporting.
What do you think of this?
Volkswagen officials bluntly explain their parochial pattern: Tennessee gave them $577 million in tax breaks and other financial inducements so, naturally, those from that state get the jobs, Chapman writes.
But Georgia and the local officials around West Point did not take the same approach with the Kia plant — even though $469 million in incentives were spent there, Chapman writes. One-fourth of the workers there are from Alabama.
“With all those tax breaks, maybe they should’ve worked harder to keep the jobs in Georgia,” Tim Stennett, an unemployed engine builder from Ranger, told Chapman.
Which side are you one?
Are VW and Tennessee justified in keeping the work for themselves?
Or is it short-sighted to bypass Georgians, given how interconnected local economies are these days — not to mention all the joblessness in north Georgia?
- Henry Unger, The Biz Beat
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130 comments Add your comment
worth repeating
January 21st, 2011
9:28 am
and please VW is a good auto maker, they will soon be the largest auto maker in the world. What wold you rather have a vw or a kia? haha
Nospin
January 21st, 2011
9:29 am
It costs Tennessee something like $200,000 in lost taxes for each employee at VW. They wanted it that bad, let them have it.
Mishap
January 21st, 2011
9:37 am
Nospin,
We paid nearly as much for the Kia plant and we were too stupid to put in any stipulations. I’m sure we paid similar amounts for NCR to move their HQ here. Ain’t corporate welfare grand?
Don't Do It
January 21st, 2011
9:39 am
I’ve had three Maximas… the first two made in Japan, the current one made in Tennessee. The difference in quality is clear. VW – you might wanna rethink this.
Oboma Is My KIng!
January 21st, 2011
9:49 am
What Volkswagon need to do is give them good job to people like me that need it!
The Presdent need to step in and make these haters hire people that need the money!
JR
January 21st, 2011
9:54 am
Georgians who live just across the state line from Chattanooga are just as much a part of the economy of Chattanooga as the people actually living in Chattanooga. Where do you think those people go to shop, eat, conduct personal business, etc? They go to Chattanooga. It’s incredibly shortsighted to deny someone employment just because of where they live.
Keeping It Real
January 21st, 2011
9:59 am
As long as this VW plant doesn’t give any handout jobs to unqualified, jive-talking, lazy and unmotivated Affirmative Action hires, the quality the plant produces should still be consistently good.
Jerry Landfill
January 21st, 2011
9:59 am
Ex-Gov Lump, the gift that keeps on giving…..
FinanceBuzz
January 21st, 2011
10:02 am
The question is not really whether it is right or wrong but is it the best thing to do. The whole question comes up because government is spending taxpayer dollar to skew the free market’s ability to win the plant at a given location. Once those payments enter into the equation, decisions get influenced by non-market factors. If I were a VW shareholder or customer, my concern would be is VW hiring the best, most qualified employee at the wages they offer. By automatically excluding a large number of people in the “Chattanooga metro area” the optimal quality of their workforce is in question. It is hard to buy that the most qualified potential employees within a given radius of the plant all happen to live in Tennessee. When it comes to positions requiring a college degree, I am confident in saying that Georgia Tech and UGA graduates are generally more qualified and better educated than UT grads (I say this and I am a GT alum so I am not being a UGA homer!). So I cannot say this decision is “wrong” – VW is a private company and they did receive Tennessee tax dollars. However, I can say I am not sure it is the best decision if their goal is to hire the most qualified workforce they can.
Gary
January 21st, 2011
10:02 am
“Volkswagen officials bluntly explain their parochial pattern: Tennessee gave them $577 million in tax breaks and other financial inducements so, naturally, those from that state get the jobs, Chapman writes.”
Not that I agree with this kind of thinking, but in light of it, why didn’t Kia show this same loyalty to Georgia workers
JLM
January 21st, 2011
10:03 am
The Kia jobs should belong to Georgians in the start-uo and growth phase of the plant. During the mature phase, you may want to extend jobs across the borders.
At the end of the day, it came down to the hiring philosophy of Kia and VW. It appear VW elected to be loyal to TN. Lesson learned, our state leadership should insist companies hire Georgians to be egilible for the tax incentives.
Grumpy
January 21st, 2011
10:07 am
What goes around comes around. Kia, which is much fewer than 10 miles from the Georgia-Alabama border, has focused its hiring on Georgia residents, including a number from many miles away, despite the fact that the unemployment rate in nearby Chambers County, Alabama, has hovered around 15 percent and higher for 3 or 4 years.
NotImpressed
January 21st, 2011
10:11 am
To Finance Buzz- I am sure that “backwoods Bubba” north Georgia is just full of GaTech grads that want employment in Tennessee.
I fully agree with GaTech being typically superior to UT but I disagree with your assessment that UGA grads are better than UT grads for degree-requiring jobs. That is, unless the job is “beer-taster”.
Gary
January 21st, 2011
10:13 am
“No production worker from Georgia has benefited from the new VW Chattanooga plant, AJC staffer Dan Chapman is reporting.”
“But Georgia and the local officials around West Point did not take the same approach with the Kia plant — even though $469 million in incentives were spent there, Chapman writes. One-fourth of the workers there are from Alabama.”
@Grumpy…I guess I’m missing your point about going around and coming around.
The NEW Detroit
January 21st, 2011
10:17 am
What economic incentives did the state of GA give VW?
Bobby
January 21st, 2011
10:19 am
Maybe I shouldn’t have bought my 2010 VW Jetta TDI. Should have looked at Ford’s or Kia’s if VW doesn’t like Georgians.
JR
January 21st, 2011
10:28 am
“With all the whininng above, posters forget this is alledgedly a red state based on free trade and no regulations! VW is a public company who can do whatever they please. You forgot your mantra? Oh, it doesn’t apply when it affects you?”
Typical socialist, equating dissent with denying someone their rights. Of course, the irony is people like this don’t want you to have any rights in the first place. Their comments are simply the proverbial ‘red herring’.
jnorwood
January 21st, 2011
10:33 am
So if I am reading this correctly we are supposed to be mad at VW for hiring only people from Tennessee and mad at Kia for hiring people from Alabama which is what we are mad at VW for not doing. Isn’t that very hypocritical of Georgians?
deegee
January 21st, 2011
10:35 am
Sonny and the hicks that are still running the show down at the Capitol couldn’t even keep a NASCAR race in GA. What are you going to do, boycott NASCAR? You would be better off demanding more from our elected officials.
“In August, 2010 Speedway Motorsports Inc. owner Bruton Smith announced that an annual NASCAR Sprint Cup race would shift from Atlanta Motor Speedway to the Kentucky Speedway near Cincinnati.
This happened despite some last-minute, hands-on lobbying from the most powerful men in the state Capitol – Gov. Sonny Perdue, Lt. Gov. Casey Cagle, and House Speaker David Ralston, who made a last-ditch personal visit to Smith.”
baby
January 21st, 2011
10:42 am
Why are people upset with VW about this? Makes no sense. I guess it would be too much to ask people to actually know what they are talking about. Business friendly states get the business. Point your finger at your leadership who you keep electing if you are not happy
Tom Joad
January 21st, 2011
10:47 am
The race to the bottom continues.
$577 in tax breaks and incentives for roughly 2000 jobs. How much are they starting at – 16 bucks an hour? These are non-Union jobs with minimal benefits where both heads of household will still need to work full time in order to pay the bills. How do people even send their children to college anymore?
Meanwhile, Chattanooga will continue to face budget cuts. But at least the state of Lower Saxony, Germany (who owns 20% of Volkswagen) and the Emirate of Qatar (17%) will get good returns on their shares.
Live from TN
January 21st, 2011
10:53 am
Attention Tom Joad:
VW located to TN precisely because of non-union interference. And if you bothered to do any research, you would know that the average production worker at the new VW plant will average around $39,000 – $42,000 in yearly salary. VW was also partly responsible for helping Chattanooga and Bradley County land not one, but TWO, new Amazon.com distribtion facilities, one of which will be built directly across from the VW plant.
Ree-bah Ree-bah Ondulay!
January 21st, 2011
10:54 am
Hey, Tow Truck Driver, from page 1. If you are in the ATL area you have probably met my daughter/son-in-law. Passat=Money Pit
tt
January 21st, 2011
11:06 am
I guess the whiners are too stupid to change address if they really want a VW job. Last time I ck Chattanooga was in TN not GA. TN owes GA nothing. Dang GA gov’t and gov. Purdue fault they cant even get new corporations to come over here. Even Red Hat passed on GA when looking for a new HQ so GA must not be to enticing in terms of offering incentives to companies. Look for unemployment in the state to be 11-12 % .. That is your future .. LOL
Tom Joad
January 21st, 2011
11:07 am
Just so Georgia doesn’t feel left out…
Abolish Progressive Era child labor laws and make public school children assemble small electronics for a Chinese company (they have such small hands) two hours out of each day. Our kids don’t need science or history classes, anyway. This might make the public school system self-supporting and, would free up more state money for things like purchasing a hunting club.
Tom Joad
January 21st, 2011
11:12 am
Well, I guess after being underpaid at the manufacturing plant, the new American worker could pick up a night shift at not one, but TWO of the Amazon distribution centers located next door.
HTH
January 21st, 2011
11:33 am
I think I am going to get me one of them little cars. Mama always said they are neighbors. So take care of them. Seriously now. Y’all we get everything Tennesee gets an aquarium and a car company and you just go to pieces. I see this as nothing but opportunity.
I think what we need to do also is built that high speed rail to Chattanooga. So we can hurry up there to get one of those cars. Seriously we need to expand Atlanta to further reachs. I think a rail line just might do that.
Bryan
January 21st, 2011
11:42 am
The jobs belong to VW…no one is entitled to them. VW is free to dispense the job to whomever they want.
Stateline
January 21st, 2011
11:56 am
Well, you have created a lot of conversation with a lot of misinformation. I live in Georgia and have several friends and clients that live in Georgia and are working for VW. I would guess that it does number in the hundreds.
Ever wonder why the AJC has lost creditbility? I am just stunned that reporters can be so incompetent and create such controversy. Thank God Atlanta is a hundred miles away so VW won’t confuse us with you.
Getting Real
January 21st, 2011
11:59 am
I find the premise of this entire questionable, not to speak of its tone.
Has anyone considered that there might be practical reasons for VW to hire only those from TN?
While this is being interpreted in the realms of only a Socio/Political/Economic debate could there be another reason for it. Like a business reason?
From what I have read above:
- TN did not require VW to hire only TN residents.
- TN does not have an state income tax, but GA residents would still be paying taxes on TN income, presumably.
- Could it have something to do with a cross border liability concern … possibly with GA?
In our highly mobile society, is moving to TN for a job not realistic … especially if you live so close that you could. Establishing residence by renting is an option to qualify you, I’d think.
VW is a public company that is scrutinized by many, many people, not the least of which are the share holders and the public. Certainly there will be PR response to this in time. No one wants to be accused of unreasonable discrimination, after all.
Of course that has not stopped many here (fortunately the minority), of spouting off deep rooted biases. Overall, the tenor of this debate is disturbing in that much of it is flat out bigoted including Racism, references to Nazism, and and even Hitler.
Reading many of these comments would be unnerving to anyone person potentially researching to do business with GA … and believe it, they are reading these unfortunate lines. I know I’d think twice if I was some international manufacturer.
So how about we dig a little deeper and find out the reasoning for such purported hiring standards before we continue with 5th grade reactionary playground bully talk folks, eh?
Live from TN
January 21st, 2011
12:29 pm
Wow, could Tom Joad be any more of a sore loser? VW also has a generous benefits package, and an on-site medical and fitness facility for its employees. Not to mention the additional 7000-8000 jobs that would directly impact Hamilton County due to the spinoff supplies that will ship parts to the plant.
Tom Joad needs to buy a serious clue on how a free market economy works.
Keep Digging That Hole
January 21st, 2011
12:30 pm
Integrity is not one of mottos GA can use in it business public relations.
When the Georgia State Senate Chair of the Banking and Financial Institutions Committee, Senator Jack Murphy, is named in a federal FDIC lawsuit … for dealing in his own bank for ‘gross negligence and and various breaches of fiduciary duty’ … and yet refuses to step down (Ever heard of avoiding conflict of interest or recusing yourself, Jack? But you are no judge.)
… and then is even supported his Senate buddies of the majority Republican ruling party
… what can one say about integrity at the highest levels?
( See: http://blogs.ajc.com/political-insider-jim-galloway/2011/01/20/your-morning-jolt-senate-banking-chairman-says-he-wont-step-down/ )
The Republican led ‘Good ole boy’s business club’ and still effectively shutting GA out of a lot of potential international business with the rest of that ‘big world out beyond our state borders.’
Will Nathan Deal as governor make the same poor mistake of letting a rabid ’shoot to kill’ (quote Jack Murphy, again) good ole boys posse run amok with bigoted, anti-immigrant banter (Jack Murphy, again) to make our state suffer more national and international abhorrence.
It can’t be and isn’t good for business.
Oh … and same Senator Jack Murphy is coincidentally also Vice-Chair of the poorly performing GA State Senate Economic Development Committee.
With old clowns like this, no wonder GA can’t but loose and not do better business with the rest of the world.
Pay back might be tough
January 21st, 2011
1:01 pm
Georgians are you reading? When it comes to buying new or used vehicles, remember this. They won’t hire Georgians, Georgians should NOT purchase VW products! Enough said.
WJH
January 21st, 2011
1:07 pm
The bottom line is VW gets credits for the instate workers and the Government of Georgia missed the boat again – way to go Sonny
Tom Joad
January 21st, 2011
1:32 pm
What is “free” about a “free market” that is giving away 577 million dollars in tax breaks and “other” financial incentives? Why do we want a system that pits states in competition with one another just to see who can give away the most to get back the littlest?
Looks to me like the “free market” is pretty expensive for those who actually provide the labor.
techfanplus
January 21st, 2011
1:37 pm
This should not be legal in the U.S. Hope Georgians will remember this when buying that new car
KenneMa
January 21st, 2011
1:41 pm
I love my VW Passat. It is longer lasting, better made, more safe and more feature-rich than any comparable American made car. VW has the right, being an American business, to hire who they please. I think it is a little egotistical to think that North GA has more talented people than East TN. TN made them a great deal, GA did not. I agree with the person above who said you all need to be angry with the nitwit politicians you elect year after year and yet are surprised that nothing changes. Also, whose to say if this policy will last forever? Maybe folks from TN will get first interviews but if VW can’t find qualified folks, then they will broaden their horizons, as does any successful business.
Mark
January 21st, 2011
1:49 pm
Good lord, are 1,300 jobs really worth $577 million in state giveaways?
Ron
January 21st, 2011
2:02 pm
The site of the VW plant in Chattanooga is really the site of the Volunteer Army Ammunition Plant (VAAP). During World War II this plant produced the TNT that Allied forces used against the Germans. Now, some 60 years later Tennessee has given this land to the Germans and they are charging Tennessee around $250,000 per worker for the right to work in their plant. And, they want to sell their cars to the rest of us for about $20,000 per car. This is Globalization at work.
John Boehner
January 21st, 2011
2:03 pm
It’s Obamas fault.
Live from TN
January 21st, 2011
2:11 pm
Hey Tom, why don’t you take a drive up I-85 to Spartanburg, SC? See for yourself what a German auto manufacturer (BMW) did for the economy of Spartanburg-Greeneville.
VW got tax breaks from the state of TN, not GA. And once again, you have overlooked the fact that for every one job VW creates, a force multiplier of 7-8 additional jobs will be created.
Wacker Chemical is also building a $500 million dollar biochemical production facility just 20 miles north of Chattanooga. That’s another 1,000 jobs. Just because TN is on the ball when it comes to economic development is no reason to whine and moan. Don’t like it? Move to another state or another country.
Bryan
January 21st, 2011
2:11 pm
@techfanplus…Not legal??? Are you kiddning?? There should be a law that requires VW to hire Georgians? These jobs BELONG to VW and not the government. VW gets to decide who gets the jobs…and people wonder why we are in this sad state of affairs.
Realist
January 21st, 2011
2:12 pm
The state of Tennesee stole money from their taxpayers to “buy” VW into their state. In order to keep the sheep of Tenn. happy, they no doubt are requiring some tit for tat on the part of VW. We all allow this kind of corruption. No doubt KIA was a similar recipient. The problem is not with VW but with our government in general and the state government of Tenn. in particular. As always, government is the problem.
Bryan
January 21st, 2011
2:12 pm
*kidding
Realist
January 21st, 2011
2:18 pm
The use of government power to promote one business over another is generally referred to as Merchantilism. Today it is the foundation of our country. People like to think that what we have is capitalism. What we actually have is Merchantilism or Corporate Capitalism.
Shadow7071
January 21st, 2011
2:24 pm
Realist – you don’t know how close to you are to the truth regarding Tenn Tax payers.
Realist
January 21st, 2011
2:28 pm
Ron – This is not globalization, it is crony capitalism. Strip government of the power to tax and the power to regulate and companies will have to survive on their own without being able to rob the citizens for their own benefit. There is nothing wrong with a global marketplace. The problem as always is with government.
td
January 21st, 2011
2:35 pm
Well, I guess it is time for Ga. to take back our land and start draining the Tennesee river and diverting it to Atlanta?
Live from TN
January 21st, 2011
2:35 pm
Funny, we folks in SE TN did not hear a single complaint from GA residents when Home Depot built their new corporate HQ in Vinings, or when UPS relocated to Alpharetta, or when the government of GA tried steal water rights from the citizens of TN for the TN River watershed.
I wonder what the tax breaks were for those companies, and where is the outrage from GA residents? First GA wants our water, now our jobs.
Hilarious. Maybe if state government was managed better, you would not have continous furloughs for state employees.
Ron
January 21st, 2011
2:41 pm
Realist – I didn’t that there was anything wrong the “Global Market Place”. Worked for a truly global corporation for more than 20 years. Got stacks of PowerPoint slides talking about Globalization. But, this is how Globalization is being played out in America. Like it or not. And, yes, politicians are going to any lengths to solve this problem of unemployment. No matter how crazy the decision. Chattanooga, Hamilton county and Tennessee paid a “Kings Ransom” to attract VW and a forecast 2,500 jobs. And, they’ve gone to great (maybe damaging) lengths to protect their investment/prize. This is the new face of Globalization and it is everywhere i.e., Ga, Tn. Al, SC, NC, MS. Corporations are waging a high stakes game of bidding for jobs. It’s expensive and in the end there are more losers than winners. In this case Ga is a loser.