Who should be blamed when a town’s signature-industry jobs depart – when a company providing those jobs moves a plant or other facilities to a new location?
That’s what Warren, Ohio — as well as many other plant and headquarters locations — face today (and really or subconsciously have faced for a long time).
Warren residents are grieving, rightfully, over the just-announced G.M. plan to shut its nearby iconic Lordstown Chevrolet Cruze assembly plant. Thousands will lose their jobs.
The New York Times lays most of the blame on the company “Taxpayers Always Lose Industry’s Shell Game With Jobs” ; subhead: “G.M.is the latest example of a company getting incentives based on empty promises”.
The Times goes on: “Folks in the industrial heartland are no strangers to this kind of betrayal. But after forking over $60 million in state and local incentives in the last decade, they believed they had done enough to get G.M. to maintain Lordstown, which built 16.3 million vehicles since 1966.”
But there is blame to be shared:
“Federal, state and local governments have gotten into the habit of providing corporations with incentives to move, incentives to stay, bailouts to stave off failure and tax benefits to build on success and create more jobs. All are based on promises about job creation and economic development that more often than not prove hollow.”
Then, of course, there is the current Administration ignoring macro economic fundamentals when, by fiat, it promises to preserve jobs, or bring jobs back, to America’s industrial heartland from abroad.
Unfortunately, in recent years millions of workers in Warren/Lordstown and many other manufacturing cities have been lulled into false security. It is impossible to fully appreciate their grief or ameliorate it. And it would be the height of presumption to offer a glossy formula for their relief or for the prevention of corporate decisions that have negative effects.
However, as the American society and economy moves forward, these realities – some harsh – merit consideration.
A publicly-owned company is not an eleemosynary, charitable institution. Yes, it has responsibilities to the communities and employees where it operates as well as to its customers and to society as a whole. But it also has legal, ethical and moral responsibilities to its owners — shareholders. Balancing all its responsibilities is often a very difficult, but socially positive mission – especially in this era of the rise of the corporate social responsibility/sustainable development business model.
Community long term strategic planning, i.e., developing as diverse an economic base as possible must become a cornerstone of political and civic agendas.
A mutually-responsible company-city relationship begins at preliminary negotiations for the “move-in”. That’s when to negotiate a legally-binding just and humane company exit commitment — no matter how far into the future.
Civic organization involvement in negotiations must protect the interests of all segments of the community. Local political leaders come and go and, as The Times concludes, “[companies]
will always find lawmakers ready to provide tax breaks with the wispy hope that they will make everyone’s life better.”
Transparency. Transparency. Transparency.