Monday, May 20, 2019

State taxpayers gave Ford $240M, then it cut 800 local jobs

Posted By on Mon, May 20, 2019 at 12:28 PM

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Ford began cutting 800 local jobs today as part of a company-wide restructuring in which it's shedding 7,000 positions globally.

The plan is expected to save the Dearborn-based automaker $600 million annually in what's ultimately an effort to boost sagging profits.

However, the company made $3.8 billion in 2018, and the local job cuts feel a bit unjust when one considers that just a few months ago state and Detroit officials handed the automaker $240 million in tax incentives to relocate its autonomous vehicle division from Dearborn to Corktown.

Ford has $17 billion in the bank while Detroit had $593 million in savings at the end of 2017 and struggles to pay for basic services. With the layoffs, Ford will save $1.2 billion by the time it's done renovating the Michigan Central Depot.

It's also worth stressing that Ford isn't actually promising to create new jobs in Corktown. We regularly heard it would be "creating" 5,000 new positions there. But it will actually be transferring 2,500 people from its Dearborn headquarters, while employees of existing partner companies will add another 2,500 jobs by 2028. All this comes just a year after Trump's corporate tax cuts saved Ford about $208 million in the first quarter of 2018.

All this also comes just months after General Motors announced it will shutter its Detroit-Hamtramck Assembly Plant, for which it received hundreds of millions of dollars in public subsidies in the early 1980s, but never created all the jobs it promised. Meanwhile, the city in 2013 gave $324 million to the Ilitches to build an arena and new neighborhood in the Cass Corridor, but most of those promises have so far gone unfulfilled.

One would think the city and state's elected officials would be asking Ford some tough questions and reconsidering their practice of handing out taxpayer money to corporations. Instead, it's doing just the opposite and is rushing to give Fiat-Chrysler about $340 million worth of tax incentives for a plant it's proposing on the city's east side.

In a statement sent to Metro Times on Monday afternoon, a company spokesperson said Ford is "undergoing an organizational redesign process helping us create a more dynamic, agile and empowered workforce, while becoming more fit as a business."

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