For the past week I have read, seen and heard how Sen. Bob Corker (Typical Southern Republican of TN) wants to kill the big 3 US automakers. He wants autoworkers to lower their wages, remove retiree’s benefits and make other cuts by 2009. Political commentators have said that he wants to protect auto manufacturers in Tennessee. That however, is only partially correct. Sen. Corker’s motivation is based on one, and only one, auto company: Volkswagen.
As Mayor of Chattanooga from 2001-2005, Corker oversaw a $120 million downtown/riverfront renovation, cut city workers pay and dangerously understaffed 9-1-1 personnel. After leaving Chattanooga with debt, Corker finally realized that the city needed more than just tourism, minimum wage jobs and property tax increases to keep the city out of the red. Corker then spent his first two years as Senator trying to lure a car maker to Chattanooga.
Corker was at an auto show in, (wait for it.......) Detroit a couple of years ago, when he heard that Volkswagen was looking for a US location to build cars that appeal to the North American market. Chattanooga had recently been on the short list for both KIA and Toyota but lost out to Alabama. Corker made sure the Volkswagen deal didn’t fall through. He wined and dined Volkswagen executives at least three times in his mansion known as Anne Haven.
And, as a typical Republican, Corker, and Democratic - lite Gov. Phil Bredesen, offered millions of the taxpayer’s money to get Volkswagen to come to Southeast Tennessee. According to 'Good Jobs First, University of Tennessee Center for Business and Economic Research' via The Chattanooga Times Free Press:
City, county, state and federal governments have pledged to provide $577 million worth of tax breaks, worker training and infrastructure improvements for the $1 billion Volkswagen plant in Chattanooga. The incentive package is the biggest among $3.58 billion of incentives provided for 20 foreign-based auto companies since 1980.
- Tax credits in current dollars* — $239.2 million
- Site preparations and infrastructure — $208.8 million
- Training and recruitment assistance — $81.2 million
- Land — $40 million
- Welcome center — $6 million
- Marketing — $2 million
The second item in the above list is quite a story in and of itself. The city and Hamilton County began preparing the former Army ammunitions site before the deal was even reached. Again, according to the Chattanooga Times Free Press:
"...officials visited the site in early May, some expressed concern about whether they could get the land cleared and ready to build according to the company's ambitious schedule....
Within hours, Mr. Ramsey and Chattanooga Mayor Ron Littlefield mobilized a small army of city and county construction crews to work up to 18 hours a day to clear more than 500 acres. The move was potentially risky because there was no guarantee Volkswagen would locate in Chattanooga. "
"..... To make sure VW officials and consultants could monitor the daily progress on the site, crews also installed video cameras atop three poles to provide streaming video Web views of the bulldozers and graders at work."
Alrighty then, let me see if I get this straight. Corker has noooooo problem giving $577 million in tax breaks and spending taxpayers money preparing a site for a foreign owned Volkswagen plant that he doesn’t even know is going to built in the city of Chattanooga, but he can’t cast a vote to give the US Big 3 auto companies a freakin' bridge loan to make it through the next year???
An article written by Katja Ridderbusch, in the The Atlantic Times a monthly newspaper in Germany, is much more blunt about what the failure of the big three means to Volkswagen:
"What is a burden for some might be a blessing for others, goes the old saying. And it could prove to be very true in the case of the failing U.S. auto industry. As the big three, Ford, Chrysler and General Motors, find themselves on the verge of bankruptcy, struggling with structural change, a harsh economic downturn, unsteady fuel prices and fading consumer loyalty, Germany’s biggest carmaker could become a beneficiary of the crisis.
A partner in Corker’s favorite law firm, Miller & Martin, in Chattanooga also feels the same way:
"If any of the big three goes under, VW will have the golden opportunity to fill the void," said Tom Harrold, a corporate lawyer and partner in the Chattanooga-based law firm, Miller & Martin.
Miller & Martin represented Corker in a lawsuit in which he sold protected wetlands to Wal-Mart for $4.7 million when he was Mayor. Miller & Martin were also Corker’s biggest campaign contributors, donating $73,010 to Corker, according to Open Secrets.
For more information about the Volkswagen deal please visit The Chattanooga Times Free Press. Writers David Flessner, Andy Sher, Mike Pare and Herman Wang have written very informative articles.