The stunning audacity being shown by Toyota Motors in seeking $2 million in California taxpayer money is reminiscent of that old joke where the kid murders his parents and then begs for mercy on the grounds that he’s an orphan.
Granted, the $2 million was promised to them. It was promised to New United Motor Manufacturing, Inc. (NUMMI), the joint Toyota-General Motors auto assembly plant in Fremont (about 40 miles southeast of San Francisco), by the California state Employment Training Panel (ETP), a taxpayer-funded agency that doles out money to companies looking to refit or expand their workforces.
Since ETP was founded, in 1983—coinciding with NUMMI setting up shop in Fremont—the panel has allotted more than $1 billion to assist companies in various industries (e.g., Georgia-Pacific Gypsum, the Gnomon School of Visual Effects, and Intuit, Inc., a software firm) in the training of their employees.
The rationale for coughing up millions of dollars in training funds—for having the state’s treasury serve as the private sector’s personal ATM machine—is that this money would, in theory, eventually “come back” in the form of decent, middle-class jobs (Fremont’s wages averaged about $20 per hour).
Unfortunately, these quid pro quo deals don’t always pan out. Following General Motors’ abrupt announcement, in July, that it was withdrawing from NUMMI, Toyota crushed what was left of everyone’s hopes by announcing, barely a month later, that they, too, were pulling out, shutting down the entire operation.
The closure, tentatively scheduled for March 31 of next year, will put 4,700 people out of work, and directly affect tens of thousands more in related industries. The employees of the Fremont plant are members of the United Auto Workers (UAW), Local 2244.
What rankles Sacramento is that, despite the shattering news of Fremont’s closure, Toyota still thinks it should be paid for its training program. These Toyota employees, who were undergoing “training” on the government’s dime, were being groomed specifically for work in auto assembly plants—if not NUMMI, then at some other auto manufacturing facility.
But, with NUMMI folding, California will not only have an additional 4,700 people out of work, it won’t have any auto plants left. That’s correct. Pulling the plug on Fremont leaves the state with exactly zero auto assembly plants. Yet, these Toyota employees continued to be trained with California dollars for jobs that no longer exist in California. Like the atheist laid out in a coffin: All dressed up, with no place to go.
Governor Schwarzenegger’s office is balking at paying because it believes Toyota arranged the deal under false pretenses. After all, this $2 million in so-called “training expenses” was secured in a February 27 agreement with the state. Then, in July, GM abruptly bails out. Then, in August, Toyota bails. All this after negotiating a $2 million stipend? Sorry, but that seems fishy.
Of course, this NUMMI arrangement isn’t extraordinary; in fact, it’s more the rule than the exception. Subsidies and lucrative, one-sided agreements—particularly when the Japanese are involved—are part of the economic landscape. As writer Eamonn Fingleton has noted in his CounterPunch articles, no country has benefited more from protectionism than Japan.
But it’s not only Japan that has its hand out. American corporations are on the same gravy train. Billions of state and federal dollars are given annually to businesses across the spectrum, from pharmaceutical, defense, technological and manufacturing companies to agriculture, ranching and mining.
In one form or another—whether it’s subsidies, exemptions, loans, dollar-a-year leases, grants, seed money, write-offs, tax breaks, what have you—Corporate America is dependent upon government largesse. Indeed, if we had a “pure” free market, with no government intervention—no assistance, no incentives, no protection—we wouldn’t be the United States. We’d be Ghana.
Yet, conservative groups still sing the virtues of the Free Market. They like to pretend we actually have one. Let President Obama so much as open his mouth about going to a public option in health insurance, and they revile him as a “socialist.” Hypocrisy, thy name is Commerce.
DAVID MACARAY, a Los Angeles playwright and author (“It’s Never Been Easy: Essays on Modern Labor”), was a former union rep. He can be reached at email@example.com