Ford CEO Farley Talks EV Tax Credit, Chip Shortage

[FordBuyer]

49 minutes ago, jcartwright99 said:

 

When I graduated in 05, I had a really hard time finding a job out of college in Michigan. I took IT contractor jobs which paid decent but none of the perks. A lot of the recruiters and company HR staff had indicated that companies had been laying off employees pretty steadily since 2000. Many of the recruiters had said that the folks that were taking these entry level IT jobs had a ton of experience. Total disadvantage for me with just part time IT work and internship.

 

I took the hint and looked in Chicago. In two weeks I had a higher paying job in Fin tech.  By the time the recession hit, Fin Tech was booming and Michigan had almost been in recession for 10 years. I haven't looked back since. Michigan has somewhat recovered but it will never be like the 90's ever again.

 

Chicago is littered with MI transplants who want nothing to do with constant roller coaster of the auto industry. Especially in IT where, every 5 years there are massive IT layoffs. They outsource to India and then that's terrible. Then they hire like nobody's business to get back to inhouse (see GM's announcement this week). I only know about 20% of people I went to school with that stayed in Michigan. 

 

You got it. Massive brain drain going on there since the 1980's. Still remember GM buying EDS and about 35,000 young, bright workers coming into Metro Detroit around 1989 or so. Within 5 years, they all left and moved on as GM fortunes lost steam. Another failed venture by GM.

 

And of course don't forget Chrysler that has filed for bankruptcy twice. And let's not forget AMC and the abandoned Packard plant still semi standing. Also remember going to a Macdonalds on Woodward Avenue that used to be a Hudson showroom.

 

And Trump pardoned Kwami Kilpatrick, the most corrupt mayor that has ever lived. Now he's back in Detroit doing god knows what. 

 

[rperez817]

2 hours ago, FordBuyer said:

MI has had a "brain drain" going on for decades.

 

Yes sir FordBuyer. Both the NYT article from 2012 and the more recent Crain's article that mackinaw shared explained why. It has nothing to do with winter weather, but the fact that decades of handouts to big corporations like Ford and GM have negatively impacted the ability of Michigan's state and local governments to fund education, especially higher ed.

 

there's been a 20-year disinvestment in higher education in this state [Michigan], which ranks dead last in state taxpayer-funded need-based financial aid for students.

[rperez817]

6 hours ago, akirby said:

West Point GA and the Kia factory is a great example.

 

A great example of politically motivated corporate welfare. State of Georgia, County of Troup, and City of West Point gave Kia taxpayer funded handouts that averaged $160,000 per job at KMMG... for jobs whose average compensation is less than half that.

[mackinaw]

2 hours ago, Footballfan said:

I wouldn't give this Cranes article much credence. 

 

It's Crain's, not Crane's.

 

At least get the spelling right.

 

[mackinaw]

1 hour ago, FordBuyer said:

And Trump pardoned Kwami Kilpatrick, the most corrupt mayor that has ever lived. Now he's back in Detroit doing god knows what. 

 

Kwame is actually living someplace in the south, though he did make a quick visit to Detroit a few months back.

[Footballfan]

56 minutes ago, mackinaw said:

 

It's Crain's, not Crane's.

 

At least get the spelling right.

 

Well EXCUSE ME!?.  No matter how you spell it, "Crain's" is not the quality publication it was when it first started. 

[rperez817]

34 minutes ago, Footballfan said:

No matter how you spell it, "Crain's" is not the quality publication it was when it first started. 

 

The Crain's article mackinaw shared about Ford Corktown is well written and has lots of useful data. And the article's premise that the success of Ford's Corktown project is much more important to both Ford and to the state of Michigan than the location of Ford's HV battery assembly plants is absolutely correct. Though that still doesn't make giveaways from the governments of Michigan, Wayne County, and city of Detroit to Ford for the Corktown project a good idea.

[Footballfan]

1 hour ago, rperez817 said:

 

The Crain's article mackinaw shared about Ford Corktown is well written and has lots of useful data. And the article's premise that the success of Ford's Corktown project is much more important to both Ford and to the state of Michigan than the location of Ford's HV battery assembly plants is absolutely correct. Though that still doesn't make giveaways from the governments of Michigan, Wayne County, and city of Detroit to Ford for the Corktown project a good idea.

A matter of opinion.  The raw numbers tell a different story.  The job spinoff effects of a major manufacturing plant is about 8 to 1.  With an office building it is about .5 to 1.  And as time has proven, the knowledge jobs for a given industry usually gravitate to where the manufacturers are located. 

[pictor]

Not seen that in practice, I have seen knowledge jobs migrate to the source of the knowledge, university centers.  Putting a manufacturing plant in the middle of a cornfield is not a big draw for siting a research/lab center.  It all about the workforce you are trying to recruit. I run a group of pharma tech consultants, all remote but located in big bio/pharma tech centers. Nobody can predict the future but if things go south, people want to know they can get new job and not be tied to a position with no options.  In the last 20 years most of the major pharma moved R/D facilities Boston/Cambridge.  Why, for tax breaks, no.  For the talent pool.

[akirby]

11 hours ago, rperez817 said:

 

A great example of politically motivated corporate welfare. State of Georgia, County of Troup, and City of West Point gave Kia taxpayer funded handouts that averaged $160,000 per job at KMMG... for jobs whose average compensation is less than half that.

Stop reading biased stories that cherry pick numbers.  This is a huge win for the city county and state. 

 

https://www.ajc.com/business/west-georgia-beginning-reap-kia-investment/JKyHMtue6QAJ7pdBWo2XCM/

 

 

[rperez817]

27 minutes ago, akirby said:

Stop reading biased stories that cherry pick numbers.  This is a huge win for the city county and state. 

 

https://www.ajc.com/business/west-georgia-beginning-reap-kia-investment/JKyHMtue6QAJ7pdBWo2XCM/

 

 

 

Thanks for the updated cost per KMMG job in the AJC article, which they state is $195,417 rather than the $160,000 in other sources. That is almost 3 times the average compensation for those jobs at KMMG. 

 

The politicians who brokered the deal and Kia are huge winners. The citizens of Georgia, Troup County, and West Point are not. They bear the impact of losing out on at least $469 million worth of investment in public institutions that are truly critical to long term economic growth and prosperity.

[slemke]

2 hours ago, pictor said:

Not seen that in practice, I have seen knowledge jobs migrate to the source of the knowledge, university centers.  Putting a manufacturing plant in the middle of a cornfield is not a big draw for siting a research/lab center.  It all about the workforce you are trying to recruit. I run a group of pharma tech consultants, all remote but located in big bio/pharma tech centers. Nobody can predict the future but if things go south, people want to know they can get new job and not be tied to a position with no options.  In the last 20 years most of the major pharma moved R/D facilities Boston/Cambridge.  Why, for tax breaks, no.  For the talent pool.

It worked for IBM when they created the Rochester, MN site.  That was mixed use and contained both manufacturing and engineering.  I believe the manufacturing portion has now been shut down.  They did it again in RTP, NC.  But, it was difficult attracting talent to the area.  People don’t want to work in a one horse town.  They want options for better opportunities without relocating.

 

Many of the pharma companies have both knowledge and manufacturing jobs in NC.  Lower taxes, cost of living, and weather being a major draw to NC.  It doesn’t hurt having large universities and a critical mass of talent available.

[rperez817]

3 hours ago, pictor said:

Why, for tax breaks, no.  For the talent pool.

 

Yes sir pictor. Talent pool is the essential piece for Ford's survival in the ongoing automotive industry revolution. As one of the people interviewed by Crain's said, if Ford doesn't get the talent it needs, nothing else will matter. 

 

Jim Farley said that Ford's most formidable competitors are Tesla, Apple, Amazon, and Baidu. Farley of course is correct. The challenge for Ford is to convince talented people who either currently work at those competitors or are in the job market to consider employment at Ford instead. Farley did succeed in that regard last year when he convinced Apple vice-president Doug Field to accept a position at Ford, as Ford's chief of advanced technology and embedded systems. Field worked at Tesla before Apple and Ford.

Edited January 30, 2022 by rperez817

[akirby]

33 minutes ago, rperez817 said:

 

Thanks for the updated cost per KMMG job in the AJC article, which they state is $195,417 rather than the $160,000 in other sources. That is almost 3 times the average compensation for those jobs at KMMG. 

 

The politicians who brokered the deal and Kia are huge winners. The citizens of Georgia, Troup County, and West Point are not. They bear the impact of losing out on at least $469 million worth of investment in public institutions that are truly critical to long term economic growth and prosperity.

Those concessions are TOTALS over 15 years, so take the avg salary times 15 if you want to do that comparison.

 

Did you miss the part where property and sales tax revenues INCREASED?  Or the part about 19 new businesses opening in just the first year?  Or the 5500 total jobs created including suppliers (not just the 2500 from Kia itself)?  
 

If you can’t show the total picture then don’t comment.

[rperez817]

16 minutes ago, akirby said:

Did you miss the part where property and sales tax revenues INCREASED?  Or the part about 19 new businesses opening in just the first year?  Or the 5500 total jobs created including suppliers (not just the 2500 from Kia itself)?  

 

No sir. Increased business activity, property and sales tax revenues, etc., could have been much broader in terms of who are "winners", and more long term as well had Georgia and its state and local governments invested whatever amount they gave away to Kia in things like public education, infrastructure, entrepreneurship, etc. 

 

That brings up a good proposal from one of Delaware's former governors, Jack Markell.

Congress should institute a federal tax of 100 percent on every dollar a business receives in state or local incentives that are directed specifically to that company. This would not include investments in public infrastructure, work force development or other investments that can attract employers while also providing a significant long-term benefit to taxpayers.

This tax would, however, end payouts that go directly to a company’s bottom line and would eliminate the pressure these companies are under to pursue such enticements. I’m talking about incentives like direct grants to a company in exchange for the creation of a specific number of jobs (something we did in Delaware while I was governor) or free or reduced land or the passage of a tax policy tailored specifically to one company.

States would still compete for these jobs — but they would do so in a way that better aligns with the long-term interests of taxpayers and the businesses themselves.

States and municipalities would also retain the ability to institute tax-friendly policies for certain sectors — like small businesses or high-tech firms (Delaware, for example, has instituted one of the most attractive research and development tax credits in the country).

This approach would provide a significant victory for taxpayers. Instead of making direct payments to businesses, states and municipalities would invest in and compete solely based on factors that make the most difference for an area’s economic potential and for a company’s ultimate success, like the abilities of the work force, the excellence of their schools and the quality of life for residents. That is a competition worth having.

[Footballfan]

3 hours ago, pictor said:

Not seen that in practice, I have seen knowledge jobs migrate to the source of the knowledge, university centers.  Putting a manufacturing plant in the middle of a cornfield is not a big draw for siting a research/lab center.  It all about the workforce you are trying to recruit. I run a group of pharma tech consultants, all remote but located in big bio/pharma tech centers. Nobody can predict the future but if things go south, people want to know they can get new job and not be tied to a position with no options.  In the last 20 years most of the major pharma moved R/D facilities Boston/Cambridge.  Why, for tax breaks, no.  For the talent pool.

Perceived quality of life has a lot to factor in as well.  Unfortunately Detroit has-and continues to have- a bad reputation in the areas of crime and blight- unlike Cambridge, Palo Alto, or Austin. The downtown area has been revamped but for the most part a lot of Detroit is third-world caliber.  Throw in a brutal winter climate and new graduates are more eager to leave than come. 

[Footballfan]

31 minutes ago, rperez817 said:

 

No sir. Increased business activity, property and sales tax revenues, etc., could have been much broader in terms of who are "winners", and more long term as well had Georgia and its state and local governments invested whatever amount they gave away to Kia in things like public education, infrastructure, entrepreneurship, etc. 

 

 

 

Bottom line you want the new plant (or pro sports team) you pony up.  You can stand on ideologies or pie-in-the-sky philosophies, and just stand on the sidelines as other states drain your job base, your population, and your economy diminishes. Ideologies and philosophies do not put bread on the table.

 

There are a lot of states that have great roads and universities, but I bet you could not name one major companies these states landed or any new startups that they birthed. 

[Chrisgb]

14 hours ago, rperez817 said:

Back to Jim Farley's statement "whatever it’s going to take" regarding government to consumer incentives to help speed the transition to 100% electric vehicles.

 

Hopefully Farley supports the proposal that Coltura put forth last year that focuses on getting gasoline Superusers to switch to BEV as quickly as possible. This is a better approach than a flat incentive structure for tax credits to BEV buyers, including the proposal in the Build Back Better bill. Gasoline Superusers Report — Coltura - moving beyond gasoline

 

 

 

I think the difficulty in this is that the Superusers are likely comprised of drivers who commute very long distances, and would have less fuel efficient vehicles. There isn't as  much Incentive needed to convince someone who commutes 20 miles a day or less that they could get a BEV and charge to 80% at home. But there are people who commute 100-200 miles a day every work day in a 4WD SUV or pickup that are understandably skeptical about BEVs, or moving closer to work for that matter.

[FordBuyer]

25 minutes ago, Footballfan said:

Perceived quality of life has a lot to factor in as well.  Unfortunately Detroit has-and continues to have- a bad reputation in the areas of crime and blight- unlike Cambridge, Palo Alto, or Austin. The downtown area has been revamped but for the most part a lot of Detroit is third-world caliber.  Throw in a brutal winter climate and new graduates are more eager to leave than come. 

 

Parts of Metro Detroit do very well like A2, Western Wayne County, and Nothern Oakland County. The areas of Detroit that have poor schools, infrastructure, crime, and lots of poverty need huge tax breaks to get anyone to build there. Western Wayne County and A2 don't have to offer huge tax breaks to get Rivian or Bosch to build multi acre campuses. 

 

I grant you it's a real dilemma. If you don't offer huge tax breaks like Detroit had to do to get Okympia Entertainment to build a ball park and arena, then they wouldn't have been built in Detroit. It's like either way you are screwed. Ford could have gone anywhere to give mobility division a home, but Detroit offered huge incentives to restore the abandoned train station that was a symbol of Detroit's decay and bring in thousands of tech workers. 

 

Dan Gilbert got huge incentives to build a billion dollar complex on the Hudson site, another symbol of Detroit decay. The list goes on and on. 

 

So I wouldn't call it a win-win, but a win and not much change for the people who live there in general. Same poor schools, poverty, and living conditions. In some cases, even worse as rents skyrocket because of gentrification. All the poor people have been kicked out of Downtown Detroit as rent has skyrocketed in recent years with Dan Gibert's Bedrock buying over 35 buildings downtown and turning many into apartment buildings. So now the average rent is approaching $2,000/month. 

 

I guess you could say life is complicated, and no easy answers. Going forward, leaders are really going to have to address affordable housing and homelessness. And how to attract new business without destroying tax base for decades.

[tbone]

1 hour ago, rperez817 said:

 

No sir. Increased business activity, property and sales tax revenues, etc., could have been much broader in terms of who are "winners", and more long term as well had Georgia and its state and local governments invested whatever amount they gave away to Kia in things like public education, infrastructure, entrepreneurship, etc. 

 

That brings up a good proposal from one of Delaware's former governors, Jack Markell.

 

 

How do you reconcile that there is no benefit to the tax payer/state when the company would not have built their facility in the state, were it not for the tax incentive.  If the incentive was not offered, they would have been left with nothing, and no opportunity for anyone.  You aren’t giving away something that you never had in the first place.

[akirby]

37 minutes ago, tbone said:

How do you reconcile that there is no benefit to the tax payer/state when the company would not have built their facility in the state, were it not for the tax incentive.  If the incentive was not offered, they would have been left with nothing, and no opportunity for anyone.  You aren’t giving away something that you never had in the first place.

It’s the same people who think all corporations are evil even when they create 200k well paying jobs with great benefits.  

[slemke]

Also need to remember that many of these incentives and tax breaks don’t materialize until the jobs do.  If the company doesn’t fulfill the contract, they could be on the hook to pay back the money.  It all depends on how the deal was structured.

 

Spending more on education doesn’t necessarily improve the community.  If there are no employment opportunities for the newly educated, they will take their degree and leave.  This happens in many rural areas.

[FordBuyer]

6 hours ago, akirby said:

It’s the same people who think all corporations are evil even when they create 200k well paying jobs with great benefits.  

 

Not evil, but greedy as in not paying an equitable share of taxes and even demanding that local and state governments pony up for new roads, sewers, water lines, rail lines, and the like. Abandon urban infrastructure and build all new out in cornfields at state expense. 

[akirby]

1 hour ago, FordBuyer said:

 

Not evil, but greedy as in not paying an equitable share of taxes and even demanding that local and state governments pony up for new roads, sewers, water lines, rail lines, and the like. Abandon urban infrastructure and build all new out in cornfields at state expense. 

You mean the greedy company that created 200k jobs paying employees an average of $100k in salary and benefits?   That’s $20B in employee compensation.  And those employees pay income, property and sales tax.  But sure let’s gripe about a few million dollars in incentives.

[twintornados]

11 hours ago, akirby said:

You mean the greedy company that created 200k jobs paying employees an average of $100k in salary and benefits?   That’s $20B in employee compensation.  And those employees pay income, property and sales tax.  But sure let’s gripe about a few million dollars in incentives.

 

..and that is always the excuse Corporate America uses to extract incentives from communities....all it does is shift the tax burden to the workers and when the incentive is gone, so is the incentive for them to stay in that community.