Update on Automotive Incentives

The auto industry has captured a major share of all incentives dollars handed out in the U.S. and abroad over the past many years. In large part, this is because of the size of the industry, the capital investment requirements of the industry and the jobs attached to those investments.

Most communities and states with large existing auto production facilities are being pressured now to give more incentives to keep existing manufacturing jobs--an issue that is creating some controversey in many city halls and statehouses. This has more often than not been the case in dealing with Big Three automakers--GM, Ford and Chrysler. A quick look across Ohio provides many case studies to learn from--Toledo (Jeep/Chrysler), Dayton (GM), Cleveland (GM and Ford), and Youngstown (GM).

It doesn't take a rocket scientist to see that local and state governments have serious fiscal constraints right now that govern their ability to belly up with large incentive packages. Some are doing it though. A quick look at recent automotive deals in Texas, Alabama and Mississippi indicates the public money can and will appear if the deal is siginificant enough.

For a good review of the current state of incentive investments in the automotive industry, go here.