Aug 14, 2008

CheeseSteak Blowhards

Last Thursday Rendell was in town giving Cunningham and Pawlowski millions of our dollars for projects in Allentown that will probably not produce one job. (new street lights on 19th St., infrastructure for the river-front) Today we learn Mack Trucks will relocate it's headquarters, with hundreds of jobs, to North Carolina. None of Three Amigo's knew anything about it. Mayor Pawlowski said it was an opportunity for us to attract a new business.


Anonymous said...

If you know anyone who works at Mack, or know anything about Mack the writing was on the wall for a long time.

This was simply the next move by Volvo to further integrate the Mack Corporate functions into Volvo. All they ever wanted was the Mack name. the engines of the two vehicles are no longer even different.

3BG said...

Mack's biggest problem is that their competitors are building more fuel efficient trucks in an economy where Diesel fuel prices are 1t $5 a gallon and rising.
I work in Logistics, and we are sticking with Kenworth because they offer the best ROI for equipment.
Mack is in bigger trouble long term than people realize.

I hate to say it, but it may be a blessing that our state and local government is not propping up a company that may fail within a decade. Volvo wanted the name, and they own it. Freightliner builds the best box truck chassis and tractor's for the money in North America, and many of those are built in MEXICO.

Look at the newer School buses in use in our area, and you will see they are "FL" Models. That should tell you something. They are more fuel efficient and built better.

Anonymous said...

MM -

There seems to be no shortage of "opportunity" (as Mayor Pawlowski calls it) in Allentown.

Glenn said...

Well I'm not sure if I want to bribe Mack Trucks yet again with tax money.

N. Carolina agreed to refund up to $8.5 million in employee withholding taxes to Mack if it creates the promised 493 jobs and retains them for at least nine years, officials said.

In 1999
First, in January 1999, Virginia put together a $54.2 million incentive package (some say between $60 and was $100 million over ten years) in return for Volvo's investing $148 million in a 185,000-square-foot plant expansion and hiring 1,277 more workers.

In 2003
Mack Trucks Inc. wants more public aid than the $5.7 million that Maryland and Washington County have promised it to keep its Hagerstown engine and transmission plant running.

In 2004
Commissioners approved a total of $420,000 in new incentives Thursday with $250,000 going to Volvo Trucks over four years for a $10 million upgrade of its plant at 7900 National Service Road, Greensboro. The company employs 1,473 workers in Guilford County

Mack's isn't exactly a taxpayer's friend!

Anonymous said...

Glenn -

They are taxpayers themselves.

If all else is equal, they will go to the place where taxes are lower (or where they receive rebates) in order to maximize the return for their investors/owners. There is nothing wrong or surprising about this. Individuals do it all the time for similar reasons.

The reaction of our elected officials is part of the problem. Most of the politicians quoted wished they had been contacted so that "they could have done something".

Instead of "doing something" - like lowering taxes for all Pennsylvania businesses to make the state more competitive with other states - our politicians prefer to hand out cardboard checks to a select few businesses that that they look favorably upon.

While that approach might help a small number businesses, it lets other businesses continue to suffer high tax rates. There is no data for how many other businesses simply do not even consider locating to Pennsylvania because of the posted tax rates.

Besides being unfair, the "cardboard check approach" is also a system that is ripe for corruption. Such aid usually goes to the politically-connected, in return for thinly-disguised kickbacks in the form of campaign contributions.

In Allentown, some businesses have received millions from government in the form of grants and loans to stay afloat, while other competing businesses without such aid are left to compete against the government-supported businesses.

This approach has met with mixed results, and does not always ensure that the highest-quality or best-run business is the one that survives.

I don't like seeing our state lose business to states offering sweetheart deals, but I also don't think our state should be trying to do the same thing. I would argue that economic development (statewide and in the city) would be better served by creating a level - and attractive - playing field for all.