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Illinois joins new auto caucus

August 17, 2012
Illinois Gov. Pat Quinn has joined three other governors of states with large automotive plants in creating the National Governors Auto Caucus, a bipartisan group to address topics that impact the auto industry.
Fellow Democrat Jay Nixon of Missouri and Republicans Rick Snyder of Michigan and Bill Haslam of Tennessee joined Quinn as founding members.
The group announced the new caucus at the Center for Automotive Research conference in Traverse City, Mich., on Aug. 7, according to the Detroit Free Press.
According to the Alliance of Automobile Manufacturers, the governors formed the caucus to “support a robust auto manufacturing sector that is vital to the U.S. economy.”
Generally, states compete against each other to draw auto plants, and leaders give large tax breaks to companies that come to their state.
The governors’ formation has prompted questions about how state leaders will both cooperate and compete. 
Bill Visnic, senior analyst, said it seems, at least partially, like an effort to avoid giving huge tax incentives to auto plants.
“It will be interesting to see the auto industry’s eventual posture on this development,” he said. “While being billed as an effort to develop guidelines for the competitive process of vying for large manufacturing investments, auto companies could interpret the National Governors Auto Caucus as little more than collusion to cap the incentives states can offer to win those investments.”
Michael Finney, president of the Michigan Economic Development Corp., told the Detroit Free Press that his state isn’t playing the divisive incentive game.
“That’s a zero-sum game for the U.S. if you take the pie, slice and dice it and give away millions of dollars in incentives to lure companies from one state to another,” he told the newspaper. “Everybody loses. Even the companies who get the incentives may lose by focusing their attention on the wrong things.”
In 2008, the Chattanooga Times Free Press reported that the state’s incentives to get Volkswagen to Tennessee could be as much as $400 million over 20 years.
Visnic said the VW incentives were big, but there have been bigger.
The organizing governors hope that others join the caucus, which will explore policy frameworks, provide a forum for discussion of “noncontroversial issues” and examine other initiatives that impact the auto industry, according to the Alliance of Automobile Manufacturers.