Last month, Toyota made a decision that didn't get a lot of press, but
sent ripples of concern through state houses across the South.
The Japanese auto giant announced that it was going to bypass offers of
hundreds of millions of dollars in "recruitment incentives" (corporate
subsidies) from several Southern states, and would instead set up shop
in Ontario, Canada, which was offering much fewer give-away's.
The decision to head north was an embarrassment for Southern states
eagerly competing to lure Toyota, on several levels. Not only did they
lose a trophy job-creator for their state.. But the reason Toyota gave
for the move was especially damning:
"The level of the workforce in general is so high that the training
program you need for people, even for people who have not worked in a
Toyota plant before, is "minimal" compared to what you have to go through in the southeastern United States," said Gerry Fedchun, president of
the Automotive Parts Manufacturers’ Association, whose members will see increased business with the new plant [...]
Several U.S. states were reportedly prepared to offer more than double
[the] subsidy [Southern states were offering]. But Fedchun said much of
that extra money would have been eaten away by higher training costs
than are necessary for the Woodstock project.
He said Nissan and Honda have encountered difficulties getting new
plants up to full production in recent years in Mississippi and Alabama
due to an untrained - and often illiterate - workforce.
In Alabama, trainers had to use "pictorials" to teach some illiterate workers how to use high-tech plant equipment.
Starting with Alabama’s successful bid to lure a Mercedes plant in 1992
with an incentive package that eventually cost over $300 million in tax
breaks and other give-away's — while the state's education system was
under court order for lack of funding — Southern states have shoveled
billions of dollars to huge foreign automakers, turning the South into
the "new Detroit."
But now companies are waking up to the limitations of locating in a
state that cares more about handing out tax breaks than investing in
its people.
Unfortunately, state leaders haven't caught on —
indeed, states like North Carolina expanded their corporate give-away programs in the last legislative session.
