The anticipated closing of the Ford Motor Co. plant in Norfolk was back in the news today. Gov. Timothy M. Kaine and Mayor Paul D. Fraim met with leaders of the United Auto Workers to brainstorm on the future of the plant’s 2,275 workers. (Read the Virginian-Pilot story here.)
How important is the closing of the Ford plant? Consider this point of comparison: The 15 plant expansion/relocation announcements made by the Kaine administration so far are expected to create new 1,882 jobs. (See the Virginia Economic Development Partnership website.) More than four months of industrial recruiting work canceled out by one plant closing.
There is nothing that the Kaine administration could have done to save the Norfolk jobs; the plant closing was based on internal Ford considerations. But the continued loss of manufacturing jobs in Virginia is a real possibility. Thus it came as a disappointment to read in the Richmond Times-Dispatch Saturday that Kaine had vetoed a measure to provide some modest tax relief to the manufacturing sector.
Local governments collect an estimated $194 million a year in machinery and tool taxes in 2005. A bill supported by the Virginia Manufacturers Association (VMA) would have reduced the length of time from 12 months to three that machinery had to stand idle before it could be exempted from the tax. R.J. “Buddy” Klotz, a VMA board member and founder of Electromagnetics Inc., of Ashland, said that the structure of the tax hurts companies’ abilities to adjust to changing market conditions. Kaine sided with local governments, which worried about the potential impact on municipal revenues.
The state offers millions of dollars a year in “incentives” to attract manufacturing business. The Kaine administration would be well served to think about what it takes to keep manufacturers here. No one wants to see any more closings on the scale of Norfolk’s Ford plant.
