Ford Motor Co.’s decision last week to cut 2,000 salaried jobs and 1,000 payroll jobs — including a significant amount in Michigan — to address what its executives say is the company’s “uncompetitive” cost structure is well within the purview of top executives on how best to run the business.
But that the announcement came after the state of Michigan awarded the automaker more than $100 million in taxpayer-funded incentives for its activities there should be a reminder to elected and appointed public representatives everywhere: Trust, but verify.
We’ve noted previously how generous state and local economic development officials have been with taxpayer money for decades as they try to attract or retain lucrative auto industry jobs within their regions. The onset of electrified propulsion seems to have turbocharged those efforts in recent years, largely because automakers have chosen to continue to produce combustion-powered vehicles while they ramp up EV production, requiring additional manufacturing capacity at least temporarily. And automakers and parts manufacturers would be negligent if they failed to seek such assistance to help offset the tremendous capital outlays required.
Yet those who negotiate such deals on behalf of taxpayers must recognize their additional obligations: to ensure that the terms are equitable and not overly generous, and to police the agreement years or even decades into the future to certify that the company is living up to its end of the bargain.
Politicians may find little motivation to safeguard the public purse when another big, glitzy announcement of future jobs may be in the offing. But they have no greater responsibility to taxpayers than to do so.
Today, there is a partially completed monument to empty promises near Kenosha, Wis., where what had been a planned $10 billion Foxconn factory offering a staggering 13,000 jobs is now a $672 million project expected to employ less than 1,500 people.
Politicians too often tout the jobs created or retained under their watch, as if the business decisions and conditions underlying those jobs were irrelevant or under the elected official’s control. Companies sometimes have to trim payroll. But taxpayers shouldn’t remain on the hook if companies later determine they are unable to keep their commitments.
