Why Is Ford Closing its Norfolk Plant?

Del. Ben Cline, R-Rockbridge, has blamed Virginia’s tax-and-spend policies for the Ford Motor Co.’s decision to close its Norfolk pickup-truck assembly plant. The Newport News Daily News quotes him as follows, comparing Virginia to Michigan:

“We are reaping the same results from this type of tax-and-spend policy with the events in Norfolk and the announcement of the Ford plant closing,” he said. “We’re seeing the same effects that Michigan has seen from their tax and spend policies.”

I agree with Cline’s premise that Virginia has adopted a tax-and-spend policy towards transportation, and I totally support his effort to hold the line on tax increases. But I also think it’s important to base arguments on well-founded facts. And the fact is, Cline has absolutely no evidence that Virginia’s tax burden — which, as the Kaine administration has pointed out, is relatively low compared to other states — was responsible for the Ford announcement.

Based on the press reports I’ve seen, Ford has given only the vaguest of explanations for its decision to shut down the Norfolk plant. The company has indicated that it wants to shift to a new system of flexible manufacturing, a system that entails the ability to shift production rapidly and inexpensively from one auto model to another. This new methodology requires a very different factory layout than the old manufacturing paradigm in which auto plants produced long runs of the same model.

I would conjecture that Ford’s Norfolk plant, which was built in 1925 — making it 80 years old — has a layout and configuration, literally locked in steel and cement, that is impossible to adapt to flexible manufacturing methods. I don’t know this to be the fact, but it sounds far more plausible than the notion that Virginia’s business taxes were too onerous. It would be helpful if the reporters covering the Norfolk plant closing would probe that angle.

Based on the information disclosed so far, there is no evidence to justify pinning the Norfolk plant closing on Virginia’s “tax-and-spend Democrats.” If anything, one could plausibly argue that Virginia’s business tax burden was a point in favor of the Norfolk plant. But we just don’t know because Ford isn’t releasing details.

The case for low taxes must be built on supportable facts, not fanciful speculation, or we risk losing credibility with the public.

Update: Here’s the Virginian-Pilot’s coverage, quoting a Ford spokesman as explicitly denying that taxes were a factor in the decision… And the reaction of Will Vehrs at Commonwealth Conservative.


ADVERTISEMENT

(comments below)




Comments


Comments

6 responses to “Why Is Ford Closing its Norfolk Plant?”

  1. kingfish Avatar

    A grossly irresponsible comment by this idealogue Cline. Unfortunately, he won’t have to face the wrath of the laid off Ford workers at the polls.
    Where are the Ford jobs going? Here in Hampton Roads we hear Michigan and Kansas- both with higher tax burdens than Virginia. Ford has its reasons but taxes aren’t one of them.

  2. Will Vehrs Avatar
    Will Vehrs

    Del. Janis has a rebuttal to criticism of Del. Cline in the comments section of my post on the subject:
    http://vaconservative.com/archives/2006/04/19/lay-off-ford-budget-boys/

  3. James Atticus Bowden Avatar
    James Atticus Bowden

    It’s really irresponsible for anyone to make political points out of this problem.

    It’s not likely that government at any level is the cause or the solution to Ford closing a plant.

    Governments should be business friendly while maintaining stewardship of the environment – if they want the jobs and taxes businesses bring.

  4. Chris Brancato Avatar
    Chris Brancato

    Why does Cline feel the need to blame Ford’s closing on anything other than Ford being whimpering in the death rattle of near bankruptcy?

    Doesn’t he see the stock price? To me his comments were that of an insecure teenager complaining that his friend hates him when the family has to move because of dad’s employment relocation.

    Pluuueeeesssee!

  5. Anonymous Avatar
    Anonymous

    I tend to accept the Janis version, knowing the MSM as I do. I also suspect Cline was less than careful in his phrasing. Ford had to cut a truck plant and it cut the plant with the greatest transportation costs caused by the longest distance from the parts manufacturers. The problem is not really congestion in Hampton Roads, but the hundreds more miles from Norfolk to the parts suppliers compared to its other two F 150 factories. The transporation costs it cited are NOT related to congestion in Hampton Roads, but simple distance.

    Ironically, there was a proposal in the Warner 2004 package to change the corporate income tax formula that would have hit a company like Ford hard, but we made that bad idea go away very quickly. And of course there was that ill advised House Bill 1488 the House Republicans put in. But if Cline’s point was that tax policy matters, then his point was valid.

  6. Porkchops sure are delicious.

Leave a Reply


ADVERTISEMENT