Friday, February 7, 2014

Two Tales of Moraine's Big Fish Deal

It's about time we had some good economic news in Dayton. I'm not talking about December's official 6.7 percent unemployment rate. That happened because hundreds of thousands of more people dropped out of the work force. President Obama and the Federal Reserve continue dragging the US economy down the drain, and government statistics continue to hide the decline as real unemployment climbs to nearly 25 percent. The good, maybe great, economic news is Chinese auto glass manufacturer Fuyao Group Glass Industries Co. Ltd plans to purchase 1.4 million square feet of factory space in the old General Motors plant in Moraine and eventually employ up to 800 people there. Given the exodus of businesses and workers from Dayton over the last ten years, this is the first, honestly good economic news I've heard in Dayton in that period.
But it's funny, if predictable, how government and its propagandists claimed credit for this Big Fish deal. On January 10, the Dayton Daily News published a hilarious tale crediting JobsOhio with bringing Fuyao to Moraine.
The article began, "The deal to bring 800 jobs to the former General Motors assembly plant in Moraine involved wooing the leader of Fuyao Glass Industry Group on three continents over eight months. JobsOhio, the state’s private economic development arm, started courting Fuyao in April and sent Managing Director Kristi Tanner to Fuyao’s opening ceremony for its newest auto glass plant in Kaluga, Russia, and then to meet with company officials at Fuyao’s headquarters in Fuzhou, China."
This tale would have us believe that heroic, tireless bureaucrats at JobsOhio identified Fuyao as a potential buyer for the old GM plant, then dogged its reluctant officers, selflessly wining and dining them all over the world for eight months at taxpayer expense, to reel them in. We're to believe that bureaucrats marketed the property then landed the Big Fish, not the owner of the property, Industrial Realty Group, LLC, based in California, which has been doing deals like this for 40 years.
Fuyao's billionaire chairman praised JobsOhio, and the deal was supposedly consummated, "with a formal, highly-scripted ceremony at the Ohio Statehouse, complete with Chinese and American flags, an exchange of gifts, and the signing of the sale agreement between Industrial Realty Group, the plant owner, and Fuyao Chairman and Founder Cao Dewang." Nobody becomes a billionaire without climbing in bed with government and making politicians and bureaucrats look good. Plutocrat Dewang plays that game well.
The only problem with this narrative is it's dishonest. Before the propaganda piece was scripted, the DDN reported, "Fuyao’s agreement to move to the former General Motors complex at Ohio 741 and Stroop Road is the fruition of months of work by local and state officials — and nearly three years of work by the plant’s owner, redeveloper Industrial Realty Group (IRG)." Reporting the real work done by the property owner seems an afterthought.
In another DDN article, Dewang tells the truth, "'We are here because our customers want us to be here,' Dewang said through an interpreter at the state capitol." His customers include General Motors, Chevy, Cadillac, Buick and Hyundai. Furthermore, from late in the fish tale, "Cao, who is a self-made billionaire, said he fell in love with the Moraine plant at first sight."
So much for JobsOhio and local government. IRG and market forces brought Fuyao to Moraine, not government. Government was an obstacle, not a facilitator. If you fell in love at first sight with a property you wanted, and if the price was right, ideally, you would just buy it. Imagine instead, before you could buy your dream property, you had to pay tribute to the rulers of Moraine, Montgomery County and Ohio. Imagine you had to spend eight months sucking up to wasteful, vapid bureaucrats from JobsOhio. You might pass on the property.
Fortunately Fuyao didn't pass. Before it could buy the perfect plant for its business needs, it first had to promise tribute to Moraine's, Montgomery County's and Ohio's rulers. That burden of government delayed the sale to three years before it was done. That wasteful signing ceremony in Columbus was part of the tribute. Political theater was its only purpose. It wasted time and resources for the two parties making the deal, but it boosted Gov. Kasich politically. The deal doesn't actually close until April. Government could still ruin it.
And JobsOhio didn't woo Dewang. This deal that will benefit everybody in greater Dayton was made between private sector actors driven by the profit motive. JobsOhio bureaucrats used this impending deal as an excuse to fly all over the world and party for eight months on money stolen from taxpayers. This idea that government helps business deals is a fraud. It's impossible for government to help. Because of its coercive nature, government can only hinder business deals, reduce profits, bankrupt businesses, and drag our economy down. Of course our rulers offered reduced taxes as incentives, but that's just a reduction of the tribute demanded by brigands. Fortunately, these two companies overcame the burdens government put in front of them to make this deal.

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