Thursday, July 17, 2008

Zero

That was the effective chance that the once great state of Michigan ever had at being the site of the huge $1 billion factory that Volkswagen is planning on building in the US. The factory will instead be built near Chattanooga, Tennessee.

Zero. None. Nil. Zip.

Early leaked memos said as much, but common sense told us Michiganders that this was the case long before any secret memo was uncovered. In fact, it is pretty easy to eliminate Michigan from any future car factories for the next 20 years or so.

Why?

As the Freep reported yesterday:

The sites in Chattanooga and Huntsville, Ala., emerged as favorites early in the search, and officials in both states lobbied hard for an investment that could top $1 billion. Both states prepped giant tracts of land with rail and freeway access that could have been turned over to VW almost at a moment's notice.

"This area has a deep base of well-trained labor, with excellent engineering and manufacturing programs at the universities and technical colleges," said Stefan Jacoby, president and CEO of Volkswagen America.

Michigan was named as a finalist, but many analysts said the state's chances of winning the plant were slim from the start. In addition to lacking a competitive physical site, Michigan's history of labor organizing and UAW-automaker battles makes it difficult to lure investment from foreign automakers, despite a deep pool of well-trained workers.
Or even a deep pool of unemployed and well-trained workers.

Governor Granholm, I'm sure, gave it the old college try.

As Michigan's annual budget battles surely indicate, the state is too fiscally fragile to make the types of infrastructure investments that Alabama and Tennessee can. While Alabama may have lost this particular factory, you can bet that the tract of land that it prepared will be snapped up soon by another manufacturer.

Though unable to make these types of investments to benefit Michigan's established automobile industry, Michigan has found many millions of dollars to bribe Hollywood to make motion pictures here. But, while automobile factories create thousands of direct permanent jobs and create millions of dollars in tax revenue, Hollywood's contribution to our state will be a quick wave from Clint Eastwood (isn't he dreamy!) and a huge credit card bill.

It occurs to me, however, as if this particular angle is of lesser importance than Michigan's famously combative organized workforce. The union is king in Michigan and it is also perhaps the most valuable voting bloc to Michigan's Democrat Party. Jennifer Granholm actively recruited the union vote in each of her gubernatorial campaigns as have most democratic candidates in Michigan for the past half century.

Granholm laments her inability to attract VW's newest factory to the Automobile Capital of the World. What she will never lament is the support of her most important constituency, the one that couldn't care less that VW just walked away.

No comments: