NASHVILLE -- A research study commissioned by UAW labor organizers claims that Nissan Motor Co. could receive four times the previously reported level of state and local incentives and tax breaks to operate its assembly plant in Canton, Miss.
According to the study by the Washington-based Good Jobs First research firm, Nissan may receive an estimated $1.33 billion in special state and local incentives over the first 30 years of the plant's operation.
When the $900 million plant project was announced in 2000, Mississippi officials estimated the initial value of the state's incentive package to Nissan at $295 million.
The union said today its new estimate adds $400 million in job tax credits that Nissan is due to receive over 20 years for its employees, and those of suppliers, who operate on the Nissan plant site, and another $160 million in Advantage Jobs subsidies that Nissan can receive as annual rebates from its employees' state withholding taxes.
The union's estimate includes other benefits such as training subsidies and reductions in business franchise taxes.
But the calculations may be less about accounting than about union organizing.
The study, revealed today at a press conference in Jackson, Miss., is the latest public airing of Nissan's business by UAW organizers attempting to recruit the plant's 5,000 workers.
Nissan's Canton plant is nonunion, as are almost all other non-Detroit 3 auto plants in the United States. In recent months, the UAW has enlisted college students, church leaders, civil rights activists and Hollywood actor Danny Glover to shine a spotlight on Nissan's U.S. wage and labor practices.
One of the labor organizers, Mississippi minister Isiac Jackson Jr., said today that he hoped that airing details of Nissan's ongoing tax incentives package will make residents in the state bring new pressure on the automaker to embrace the union.
"Mississippians will be surprised by the amount of money that has been given to Nissan to make this plant possible," Jackson said prior to the press conference. "They're going to want to see Nissan treat their employees with dignity and to give them the right to organize.
"Nissan should readily open up its doors to the union to come in and explain to workers how the union can work there."
Asked whether he believed Nissan is likely to respond in that way, Jackson said, "We're trying to get to that point."
In a statement released today by Nissan North America in Nashville, Nissan defended its use of public incentives to generate jobs in the state.
"Nissan has more than met the requirements for job creation called for in the state's incentive package," the statement read. "Our 5,000 team members hold some of the most secure jobs in Mississippi and enjoy competitive pay well above the state average for manufacturing jobs and strong benefits.
"In addition," the company said, "our area suppliers are responsible for more than 2,000 jobs, to say nothing of the impact on economic growth and job creation for businesses throughout central Mississippi. Nissan is proud of its history of beneficial economic impact in Mississippi and its reputation as a good corporate citizen."
Both the original public accounting of Nissan's incentive package and the latest calculations by the UAW are open to some interpretation. The actual dollar figures are determined by the plant's employment levels, investment outlays by Nissan, vehicle production, property values, worker training needs and supplier activity -- all of which change over time.
Since breaking ground in 2000, Nissan has invested more than $2 billion in the Canton plant. It is currently expanding operations to produce eight models there -- the Altima, Sentra, Frontier, Xterra, Murano, Titan, Armada and NV-series commercial vans.
Nissan is not unique in receiving large incentives packages to support new and existing plant projects. General Motors, Kia Motors America and others have secured packages worth hundreds of millions of dollars in recent years.
States and counties typically chip in millions of dollars to pay for land acquisition, roads, site preparation, utilities and employee training. Manufacturers in other industries, including Boeing, Intel and General Electric, also have been awarded huge investment packages.
Philip Mattera, who conducted the study of Nissan's incentives as corporate research director for Good Jobs First, predicted the latest calculations will stir debate over what a company's obligations are in return for building a factory and hiring workers.
"People will look at these numbers in one of three ways," Mattera says. "Some people will say that the company is being greedy for taking so much. Some will say that the local public officials are foolish to give away so much. And some will say that it's just a good deal all around."
Marlo Dorsey, chief marketing officer for the Mississippi Development Authority, which negotiates economic incentive packages for the state, said the numbers in the new report appear to be “artificially high.”
“The report talks about lost tax revenues as a result of the Nissan project,” she says. “How can we be losing revenues on a project that wasn’t here before? If Nissan never came to Mississippi, Mississippi would have zero revenues from it.”
She said that in 2002, the state undertook a cost analysis of its investment in the Nissan project, based on Nissan’s original projection that it would hire only 2,000 employees. At that level, she says, the state would have recouped its incentives outlay by 2007. But Nissan has continued to add additional workers.
“They have far exceeded our expectations,” she said.