Trump Gets What He Wants [BB] Electrolux to Close Memphis Plant

SamFisher · Feb 22, 2019

Looks like subsidies and giveaways couldn't save hundreds of jobs in a city that badly needs them..

Thanks, Tariff man!

https://www.bloomberg.com/opinion/a...phis-offers-lesson-about-government-subsidies

So when Electrolux — which already had a facility about 200 miles away in Springfield, Tennessee — came calling, promising 1,240 jobs if the government would help it build a plant, the city and state thought that it was an opportunity they could not let slip away. Their desperation led them to give away the store. Of the $190 million it was going to cost to get the plant up and running, various government entities agreed to pay $150 million. In cash! The state was in for $97 million, $55.3 million of which dedicated to the purchase of factory equipment. Shelby County’s share was $20 million, and the city of Memphis put in another $20 million, mostly for infrastructure. Electrolux would also get all the usual subsidies — payment in lieu of taxes, property tax relief and so on. Electrolux’s contribution to its own facility amounted to a mere $40 million.

“This was a struggling community,” said Dulberger. “They thought landing Electrolux was a grand slam.” In one presentation, Electrolux rolled out plans that called for the creation of a “supplier park,” with Electrolux-linked companies setting up shop in Memphis. Those plans, however, never came to fruition.

The plant opened for business in 2014, but from the start, it never employed the 1,240 it had promised. Employee headcount topped out at a little over 1,100, though for most of time, it was well below 1,000. In other words, having received an extraordinarily generous package from Tennessee — a package based on 1,240 jobs coming to Memphis — Electrolux wasn’t holding up its end of the bargain. Yet there was nothing the city, county or state could do about it. The memorandum of understanding with Electrolux had no protection for the taxpayer in the event the company fell short of its promises.

Now that Electrolux is pulling out, the deal looks even worse. When it leaves in 2020, the company will have operated in Memphis for just six years. The incentives it got, starting with that $150 million, were “way out of whack” for the jobs it created, said Bob Rolfe, the head of the Tennessee Department of Economic and Community Development. And there is no way to get any of that back from the company. The deal “was excessive and unrecoupable,” Rolfe added. In two years, all Memphis will have to show for the money it spent on Electrolux is an empty plant.
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KingCheetah · Feb 22, 2019

In cash...

pgabriel · Feb 22, 2019

What does that have to do with Trump or tariffs

SamFisher · Feb 22, 2019

pgabriel said: ↑

What does that have to do with Trump or tariffs
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Pat you didn't read the article, my brother.

Sad!

pgabriel · Feb 23, 2019

SamFisher said: ↑

Pat you didn't read the article, my brother.

Sad!
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Actually i read your quote and for some reason you didn't quote the whole article and your quote omits the part about tarriffs

Your quote and the whole article (there's only one sentence on tariffs) is focused on the company leaving after all the tax breaks and thats a local issue. The tarriffs dont seem to be why this plant never lived up to expectations

That being said are goods produced here by a foreign company subject to tarriffs imposed on its country?

mick fry · Feb 23, 2019

Trump bad, failure good.

juicystream · Feb 23, 2019

pgabriel said: ↑

That being said are goods produced here by a foreign company subject to tarriffs imposed on its country?
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They pay tarriffs to import raw materials.

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Trump Gets What He Wants [BB] Electrolux to Close Memphis Plant

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