Nucor steps up opposition to steel mill subsidies UPDATE | Arkansas Blog

Thursday, March 21, 2013

Nucor steps up opposition to steel mill subsidies UPDATE

Posted By on Thu, Mar 21, 2013 at 8:22 AM

WINNER: John Correnti, former Nucor exec who leads new steel mill startup, would be big winner under state subsidy plan. A competitor asks why.
  • WINNER: John Correnti, former Nucor exec who leads new steel mill startup, would be big winner under state subsidy plan. A competitor asks why.
Nucor, the big steel producer with a mill in Mississippi County, is increasing its attack on the state proposal to give tens of millions in subsidies to a startup competitor run by a former Nucor executive.

Roby Brock at Talk Business has a full report on the Nucor talking points, going out to legislators. It includes a warning that the state subsidies could contribute to market conditions that will force Nucor to pare its Arkansas jobs.

This has always been the core problem with corporate welfare. One player's gain is another player's loss, one way or the other. If the Big River Steel proposal is solid, why can't it make it on its own, in the free market, without taxpayer subsidy? (The standing state answer is that another state will get the jobs if Arkansas taxpayers don't pay tribute.) Still, is it fair for taxpayers to subsidize one business at the expense of another? Nucor's memo says, in part:

Help us understand how you can be backing a competitor when we have been in Arkansas for 25 years, have poured $2B of direct and indirect taxes in the state treasury, have brought many customers and corresponding manufacturing jobs to Mississippi County, and have been a good corporate citizen to the state and to northeast Arkansas.

Help us understand why the state believes this is such a good investment when the industry is operating at 70 to 75%, Nucor Steel Arkansas hasn’t run full since September, 2008, Nucor Steel Arkansas didn’t produce 600,000 tons last year due to lack of orders, and the BRS financial assumptions are more than questionable. If this is such a good deal, with their overstated rate of return, why aren’t steel mills popping up all over the place?

By voting to subsidize BRS ($400,000+/job), you ARE voting against jobs. You are voting against high paying jobs that have been in the area for 25 years. As stated earlier, having 3 mills so close together will drive up the costs for all mills. At some point, orders, tons and people will flow to where they can most profitably be produced. In Nucor’s case, that will be one of our 3 sheet mills in Indiana, Alabama or South Carolina.

We don’t believe it makes political sense for the state to attempt to pick winners and losers and putting existing successful industries in jeopardy by giving unique advantages to their competitors. Do other established businesses need to worry about the state subsidizing their competitors?

The state, however, picks winners and losers all the time. The Republican legislature is poised to designate the wealthy as the big winner in the tax cut derby. Those sorry takers who are the working poor will be losers, both through minimal tax cuts and the certain decline in public services (particularly in vital higher education) that will have to follow.

UPDATE: Roby Brock of Talk Business is reporting additionally on the new report by legislative consultants on the deal. They say the market can absorb additional steel capacity, though the state perhaps has overestimated the long-term economic benefits of Big River Steel. More here from Arkansas Business.

Tags: , , ,

From the ArkTimes store

Favorite

Comments (6)

Showing 1-6 of 6

Add a comment

 
Subscribe to this thread:
Showing 1-6 of 6

Add a comment

More by Max Brantley

  • Anybody around?

    The Thanksgiving open line.
    • Nov 23, 2017
  • Turkeys rescued in Yellville enjoy their Thanksgiving

    Farm Sanctuary, an animal protection organization, sends word that four turkeys rescued from the Yellville Turkey Trot after the annual drops from buildings and an airplane will enjoy Thanksgiving in friendlier places
    • Nov 23, 2017
  • The New Orleans charter school 'miracle'? It's a ruse

    The New Orleans Tribune has a devastating piece of editorial commentary, based on local reporting and test scores, that lays bare the depiction of the charterization of New Orleans public schools 12 years ago as a miracle of the "reform" movement.
    • Nov 23, 2017
  • More »

Readers also liked…

  • Judge anticipates punishment of lawyers in Fort Smith class action case

    Federal Judge P.K. Holmes of Fort Smith issued a 32-page ruling yesterday indicating he contemplates punishment of 16 lawyers who moved a class action lawsuit against an insurance company out of his court to a state court in Polk County after a settlement had been worked out.
    • Apr 15, 2016
  • The inspiring Hillary Clinton

    Hillary Clinton's campaign for president illustrates again the double standard applied to women. Some writers get it. They even find the supposedly unlikable Clinton inspiring.
    • Oct 16, 2016
  • LR speakers blast state board for double standard

    A series of speakers, beginning with Sen. Joyce Elliott, denounced what they saw as a hidden agenda favoring charter schools at the state Department of Education and asked the state Board of Education for return of local control.
    • May 12, 2016

Most Viewed

Most Recent Comments

  • Re: Anybody around?

    • Great story mountaingirl. I spent a lot of time at that sight in the 80s…

    • on November 23, 2017
  • Re: Anybody around?

    • I'm thankful I have not flown since July 2001. Flying used to be fun, and…

    • on November 23, 2017
  • Re: Anybody around?

    • Shit, Cato, looks like somebody might have to do some time. Won't be hard time…

    • on November 23, 2017

Blogroll

 

© 2017 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation