The Republican Senator from Alabama has been getting a lot of airtime lately because of the problems in the auto world, but here's a letter from Peter Karmanos, Jr., chairman and CEO of Compuware Corporation, to U.S. Sen. Richard Shelby, R-Ala., a critic of bridge loans for American automakers, that gives us a little history on his political motives for why he'd like to see them all go under.
I trust it is safe to say that when you refer to "government subsidies," you are referring to subsidies provided by both federal and state governments. And if this is in fact true, then I am sure you were adamantly against the State of Alabama offering lucrative incentives (in essence, subsidies) to Mercedes Benz in the early 1990s to lure the German automobile manufacturer to the State. As it turned out, Alabama offered a stunning $253 million incentive package to Mercedes. Additionally, the state also offered to train the workers, clear and improve the site, upgrade utilities, and buy 2,500 Mercedes Benz vehicles.
All told, it is estimated that the incentive package totaled anywhere from $153,000 to $220,000 per created job. On top of all this, the state gave the foreign automaker a large parcel of land worth between $250 and $300 million, which was coincidentally how much the company expected to invest in building the plant...read on