New Auto Factories: Michigan Need Not Apply

January 15, 2008

Comments

Speaking of Michigan, Glenn Reynolds observes,

SO THE CAR INDUSTRY IN MICHIGAN IS IN TROUBLE, but foreign carmakers are eager to open new factories in the United States — just not in Michigan. If I were a Michigan politician, or voter, this would make me think about what Michigan is doing wrong.

The link is to an AutoBlog story about VW’s quest to build a new American plant, with North Carolina, South Carolina and Georgia as “the leading candidates.” It doesn’t offer any analysis as to why but, presumably, the answer is that those are right-to-work states with competitive wages, good weather, coastlines, and solid schools, particularly at the university level.

One imagines that the first on the list — the unfriendliness to unions — is the most important. But it’s not the only factor; the boom in foreign auto manufacturers coming to the USA in the last fifteen years or so has left out Wyoming, Utah, Idaho, and other wage-friendly states that are otherwise weak on some important quality of life measures. I’d wager that, if Michigan were to suddenly figure out how to compete on a wage basis, they still wouldn’t be on the list.

9 responses to “New Auto Factories: Michigan Need Not Apply”

Dave Schuler

January 15, 2008 at 4:05 pm

Right-to-work regulations are for practical purposes a wage subsidy.
Anderson

January 15, 2008 at 4:28 pm

Maybe it’s also a consideration that Michigan is REALLY REALLY COLD?
James Joyner

January 15, 2008 at 5:11 pm

Maybe it’s also a consideration that Michigan is REALLY REALLY COLD?

Sure. That’s the “good weather” part.
yetanotherjohn

January 15, 2008 at 6:05 pm

Michigan has some decent schools at the University level. And they have some awesome coast line for the Great Lakes. Nice weather and competitive wages, not so much.

I remember a visiting professor from Univ. Mich. School of Law talking about the right to work laws. He said it was a misnomer because you had the same right in Michigan. You didn’t have to join the union until you had been on the job for 90 days. So in his mind, you could just change jobs every 90 days and it was all the same if you didn’t want to join the union.

I also remember the look on his face when I asked him if he saw a problem with the university taking 0.5% of his pay out to donate to the republican party. After a bit of back and forth of “no they don’t”, “sure they do, look at your pay stub”, he allowed he started getting mad because they shouldn’t be forcing him to support the republicans (dark days of the evil RayGun and his plot to blow up the world by putting medium range nukes in Europe). I then asked why it was okay to force a someone to join a union, part of his dues going to support democrats he didn’t support but not to force professors to support republicans. Of course, the university really didn’t take 0.5% out of the paycheck and if they did they would have been giving it to democrats back in those days (Tower being the only state wide elected republican).
tom p

January 15, 2008 at 8:13 pm

Ya know… About 30 yrs ago we had that so called “right to work” crap come here to MO… We said, “NO… How about the right to get a decent days wages for a decent days work?”

Now before all you right wing demagogues(sp?)(tongue in cheek)jump all over this long time Union Carpenter, have you paid attention to which states seem to have the biggest problems with illegal immigration? Not that we don’t have some of those same problems here in the “Show Me State”… I make 31.40 an hour (when I work), with overtime, with pension, with health care, with SS, with taxes being taken out, with unemployment ins, with workmen’s comp, with… You get the idea. Here is the flip side:

None of the above. Which one would you give up? Don’t have it already? Join a union. But….

How is my boss,(a good law abiding American) supposed to compete with their boss? (make no mistake, it is not only “illegal immigrants” who work this way)

Apparently, many of you think a “right to work” for a “competitive wage” equals the right to slowly “starve” while those on top reap the benefits of your hard labor.

Someday, we will all re-awaken to the fact that there is another right: Collective Bargaining.

You don’t like paying union dues? Don’t. I am sure Wal-Mart can find a place for you as a door greeter.

tom

ps: last I heard, it was against the law for a Union to use your dues for the furtherance of a political candidate.
just me

January 15, 2008 at 8:33 pm

Tax incentives are another big reason these companies are drawn to the southern states.

Between states offering outright tax incentives to the companies, and the fact that the COLA in those areas and tax burdens are also low for employees (and when Toyota went into Georgetown, KY back in the 80’s while a huge number of area people were hired for the line, hundreds of other employees that worked at the company level moved in-that whole area has grown tremendously since I moved away).

Even if Michigan were more competitive wage wise, there are other incentives that draw companies to places like Georgia and South Carolina.
floyd

January 15, 2008 at 10:45 pm

Whether they are disingenuous or not, The foreign manufacturers have consistently claimed location is largely determined by access to transportation infrastructure,[like highways,rivers, railroads]and distance to markets and suppliers[centrally located].
Of course there are many other considerations,practically all of which are financial.The rust belt is no longer as “centrally located” as it used to be as far as economic activity is concerned.
markm

January 16, 2008 at 7:19 am

“Tax incentives are another big reason these companies are drawn to the southern states.”

DING DING DING. That’s one big problem with this state. I also believe approx 60 or 70 years of Union wage scares potential manufacturers away. As far as infrastructure, we’ve got all that and have had it for some time. That’s not an issue.
rpkinmd

January 16, 2008 at 8:32 am

The auto industry is not in trouble, the South is teeming with new auto plants. Maybe it is just Michigan?