The following is taken directly from How Americans Can Buy
American: The Power of Consumer Patriotism.
When foreigners assume ownership of U.S. land and factories, they become
our landlords and holders of the mortgage on our national treasury.
They dissipate wealth instead of creating it since their profits return
to foreign lands and the taxes are paid to foreign governments.
Foreign owned companies pay fewer taxes to the United States government
than comparable American owned companies. The more we support American
owned companies, the stronger they will be and the less likely they will
be to merge with or be taken over by foreign companies. Representative
Bill Archer (R-TX), Chairman of the House, Ways and Means Committee,
recently argued that as American companies merge with foreign companies
and move their headquarters overseas, they inevitably pay less money to
the IRS. The biggest recent example of a former American company
merging with a foreign company is when Chrysler, the most successful
automobile company in the 1990's (but not the biggest), was acquired by
German-owned Daimler-Benz. Detroit and its workers will now take their
orders - and layoff notices - from Stuttgart, Germany instead of
Detroit, Michigan, and will have to fly across the Atlantic Ocean to
protest corporate decisions.
When Daimler-Benz and Chrysler merged, Chrysler had a 44% stake in the
newly formed company. By March of 1999, however, the percentage of
American shareholders in DaimlerChrysler had dropped to 25%. Although
the deal was passed off as a "merger of equals," it soon became obvious
this was not to be the case. By June of 2000, Detroit could not keep up
with the processing of resumes since so many former executives were
leaving. Many of these same executives used to take pride in the fact
that although Chrysler was the smallest American car company in the
1990's, it was still the most successful. "Fast is better than big" used
to be the saying among Chrysler executives.
New CEO Jurgen Schremmp won and Chrysler lost. It would seem for a short
time in the beginning that both would win, because at the time of the
takeover, Chrysler was awash in profits. Differing from the initial
announcement of a "merger of equals," Schremmp made Chrysler a mere
subsidiary of the German automaker. Almost every aspect of making
Chryslers, from design to production, was to be controlled by Schremmp
from the German headquarters.
After the ink on the deal was dry, Schremmp spent the night drinking it
up with his new American colleagues, leading them in the singing of
songs which included "Bye, Bye, Miss American Pie."
By January 2001, when it was evident that Chrysler was in deep financial
trouble, Schremmp tried to put an American face on Chrysler, saying "I
will not rest until this company - this American icon - is back where it
belongs, at the top of the industry. But it was too late. Chrysler had
been solidified as a German company. Most of the former American
executive talent had left out of cultural differences, and the workers
morale wasn't faring too well either. In February 2001, within days of
detailing plans to eliminate thousands of American jobs, Schremmp
announced that German workers would be paid an 11% bonus. 140,000 hourly
employees would get checks totaling nearly $1,500 each.
Any contribution Chrysler can make to DaimlerChrysler's bottom line will
now further enable Airbus to compete with America's largest exporter -
Boeing. Airbus is a heavily government-subsidized consortium of British
Aerospace PLC, France's Aerospatiale Matra SA, Spain's Construcciones
Aeronauticas SA, and the aerospace unit of DaimlerChrysler. In fact,
Airbus won more orders than Boeing for the first time in history in
1999, the year after Chrysler merged with Daimler-Benz.
In 1997, the state of Alabama granted huge subsidies to Mercedes in
exchange for a plant that would employ 1,500 people. What were the
details of this huge incentive package? $300 million in tax breaks, $253
million in other direct incentives, $60 million in Alabama taxpayer
money to send fellow Alabamans to Germany for training, and a promise to
buy 2,500 of the new Mercedes SUV's at $30,000 each, representing
another $210 million in guarantees. Based on just the initial $300
million grant alone, those 1,500 jobs will cost Alabama taxpayers
$200,000 per job. Apparently Alabama, not Mercedes, will be paying those
salaries for years to come. With deals like these, it's no wonder
foreign automakers have stepped up production in the U.S. We'll even pay
their workers' salaries for them!
But it didn't stop there. DaimlerChrysler decided in August of 2000 to
build a second plant next to their existing plant in Alabama. The
German company will reportedly receive an additional $150 million in
government incentives for the expansion.
The original deal Mercedes crafted with Alabama caused such a backlash
from Alabama citizens that it cost then-Governor Jim Falson his
reelection bid, since voters in that state did not appreciate
commitments to Mercedes that required school officials to raid education
funds to the tune of $43 million. Education administrators refused to
hand over the money, forcing Alabama to raid pension funds instead, and
to secure financing at 9% interest to repay the borrowed funds.
Roger Simmermaker, Author
How Americans Can Buy American
www.howtobuyamerican.com
