Host Michael Patrick Leahy and All-Star Panelist Crom Carmichael on Pros and Cons of New Ford Motor Site

 

Live from Music Row Monday morning on The Tennessee Star Report with Michael Patrick Leahy – broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 a.m. to 8:00 a.m. – host Leahy welcomed the original all-star panelist Crom Carmichael to the studio to discuss the new Ford Motor site in Haywood County outside of Memphis and whether or not it’s good for the state.

Leahy: In studio, the original all-star panelist Crom Carmichael. Crom, it’s not often that I cite the work of The Tennessee Journal Eric Shelzig. The former AP reporter who leans more than a little bit left.

But let me start off with this statement. His lead from a story that was published on Saturday when lawmakers return in a special session next week to take up an incentive package for Ford’s Blue Oval City at the Memphis Regional Megasite they might be surprised the price tag has now reached $884 million.

Let me break it down for you, Crom. $500 million in a grant to Ford Motor Company or its electric battery affiliate, $200 million for road work, $138 for building demolition and related work on the site, $40 million for the construction of the Tennessee College of Applied Technology, $5 million for consulting services, and $675,000 for a new mega-site.

Now Crom, just to kind of set the premise for this, I’ve said, and maybe 10 percent of state legislators would agree with me. I don’t think we should be giving any incentives to any corporation of any kind.

I think 90 percent of the state legislators would agree more with you. Which is, well, it depends on the deal. What are your thoughts on this?

Carmichael: Well, Michael, I think it depends on the deal.

Leahy: (Laughter) Boom! You got me.

Carmichael: You got me at 6:51 a.m. in the morning. Let’s talk about this particular deal. I’m going to make a couple of assumptions here.

And so you can push back on the assumptions and maybe the legislature would incorporate these in the bill that they pass.

I’m going to assume that the $500 million grant has some strings attached to it. I think it would be improper if the state wrote a check for $500 million and then hoped that Ford would then do what they promised.

Leahy: Here’s your check for 500 million.

Carmichael: Now please do what you promised. I’m hoping that there are some hurdles that Ford Motor has to achieve in order to get the 500 million.

Leahy: And let’s make that assumption. I don’t know if that’s true, but I think this is in the details in the bill under consideration in both the state Senate and state House today.

Carmichael: I would assume that the roadwork of $200 million is going to benefit a lot of the communities around Memphis. $200 million is a lot of road work. And when they built the Saturn Parkway, for example, leaving I-65, a lot of people who are not Saturn employees use that parkway.

I’m going to assume that in addition to benefiting, Ford is an infrastructure project that will benefit more than just Ford. The school is interesting. What did you say about the $40 million?

Leahy: $40 million dollars  Tennessee College of Applied Technology in Hayward County, which is where this is going to be located.

Carmichael: Now, if it’s a privately run College, I’d much rather have a privately run College teaching applied electronics. That sounds like a very forward-thinking idea. And I like that idea.

Leahy: The governor called it a first of its kind trade school. Now, I will have to say this. The governor comes from a background as a certified welder, and he’s got a mechanical engineer degree. I like this.

He’s been promoting apprenticeships and things of that nature. I think people should be more in the trades. I don’t know the details of this College, but if it is, as they describe, a very detailed trade relevant to building electric car batteries and plants. I think that’s worthwhile.

Carmichael: You’re not as upset by that as the other?

Leahy: The $500 million given to Ford, I don’t like.

Carmichael: The return that the state will get and that that particular community will get because, remember, the state gets the lion’s share of any sales tax revenue.

Leahy: And this was the argument made by Andy Smith, the Mayor of Maryville. Were you in here with us when we talked about that?

Smith and Wesson came and he made the same argument. There’s going to be sales tax increases from all the consumption of people there.

Carmichael: Well, you’ve got 5,800 jobs. If you assume a $65,000 a year average for the jobs, which I think is a reasonable average might even be a little low, then you’re approaching $400 million a year in payroll. So let me just add one other question for you.

Leahy: They’re going to use this to build electric cars, not other cars. Does that raise your eyebrows? Electric versus others.

Carmichael: I think electric cars are being part of our future. I think as batteries become more and more and more efficient, I think we will move from fossil fuels to batteries. I would prefer that we do that because of the greater efficiencies of batteries rather than subsidizing individuals car owners.

Leahy: It looks like basically, what’s going on here is the federal government, as a matter of policy, is picking electric cars over internal combustion engine policies. And whenever that happens, the unintended consequences are never good.

Carmichael: I agree that if you make the incentives too great that you create problems. If you eliminate the Keystone pipeline, I think that was a terrible decision.

Leahy: At the national level.

Carmichael: Absolutely. At the national level. I think if you eliminate fracking, I think that that has terrible implications. And so energy policy, to me, should be a menu of all of the above with the proviso that you’re consistently moving toward the objective of cleaner air and cleaner water. And cleaner air has now been achieved.

Leahy: I got one little thing for you on this. They’re going to be making electric-powered pickups. That’s what they’re going to be making. I got one little caveat on this.

Carmichael: What’s that?

Leahy: Do you think that people who buy pickups are going to be as friendly towards the purchase of electric vehicles as the hipsters who live in Germantown?

Carmichael: No, I’ve not done the market survey.

Leahy: That’s the question I would have. Because the guy is driving a pickup is a guy who’s like driving to a construction site.

Carmichael: Let’s remember, we’re not building the plant for Ford. Ford, I think you said earlier is investing $5.6 billion of its money, right? Ford obviously thinks that they’re going to be building a product there that people would buy.

Leahy: It’s a risk, I would point out.

Listen to the second hour here:

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Tune in weekdays from 5:00 – 8:00 a.m. to the Tennessee Star Report with Michael Patrick Leahy on Talk Radio 98.3 FM WLAC 1510. Listen online at iHeart Radio.