Government

Brown Touts Auto Bill; Renacci Calls It ‘Magic Act’

NORTH JACKSON, Ohio – Scott Chittock of Berlin Center, laid off from the General Motors Lordstown Complex, wore a reminder Friday morning of another time when the future appeared uncertain for the auto plant.

Pinned to his T-shirt was a round button with the logo of the Bring It Home campaign of 20 years ago, when the Mahoning Valley mobilized to show support for the plant amid speculation that it was slated for closing.

“I personally love building cars. That’s my job. That’s what I want to do,” said Chittock, the former fabrication shop worker. “It’s a questionable, scary time right now, but it is what it is.”

Chittock was among  90 UAW members and guests at Local 1112 union hall to hear U.S. Sen. Sherrod Brown outline his bill to boost domestic auto sales and domestic auto manufacturing jobs.

Brown, D-Ohio, introduced the American Cars, American Jobs Act last week. If passed by Congress and signed into law by President Donald Trump, the act would temporarily provide car buyers with a $3,500 discount when they purchase or enter into a five-year lease for one of 100 cars and trucks manufactured in America, including all passenger vehicles made in Ohio.

GM’s Chevrolet Cruze is manufactured at Lordstown, which last month eliminated its second shift because of declining Cruze sales as demand shifts to sport utility vehicles and trucks. The shift ended the same day GM announced it would build its new Chevrolet Blazer at a plant in Mexico, a “brazen” move that Brown said surprised him.

“These are challenging times for our Valley,” said Lordstown Mayor Arno Hill, who attended the press event. “All the workers here — they’re the ones who helped carry us though all the low times.”

Brown’s legislation would revoke a tax break included in the Tax Cuts and Jobs Act of 2017 that the Democrat said incentivizes companies, including automakers, to manufacture products outside the United States.

The tax bill, which was passed by the Republican-controlled Congress and signed into law by Trump, permits some overseas profits to be taxed at a 10.5% rather than the full 21% corporate rate.

The policy essentially gives U.S. companies “a 50% coupon off your taxes if you move overseas,” Brown said. “It’s immoral and stupid.”

The elimination of the tax break will generate approximately enough money to pay for the rebate program, which would run for about two years, according to the legislation.

The goal is to get automakers to manufacture their products in the United States and employ American workers, he said.

In July, when Brown discussed with GM CEO Mary Barra the possibility of retooling the Lordstown plant for a larger vehicle, she told him adapting the paint shop, which is configured for a smaller vehicle, would be too expensive, he said.

A decade ago, American taxpayers came to the rescue of the U.S. auto industry, the senator said. “There seems to be this amnesia” among some people in government and in the auto industry, he remarked.

U.S. Rep. Jim Renacci, R-16 Ohio, who is challenging Brown in November, criticized the incumbent’s plan.

“This is the six-year magic act that Brown comes up with,” he said during a phone interview following Brown’s event. The bill “will never get passed.”

Among Renacci’s criticisms is that the rebate would last for two years. In addition, revoking the tax break created under the 2017 GOP legislation would increase costs for manufacturers, who would pass those along to consumers, he said.

Under the old tax law, Renacci notied, companies did not have to pay any taxes on those foreign earnings.

Renacci, a former car dealer, pointed out the similarity to the Car Allowance Rebate System, a 2009 program more commonly known as “cash for clunkers” that was meant to boost car sales. He called it a “terrible situation” that drove up the cost of used cars and made it difficult for dealers to meet their financial obligations until the government reimbursed them for the rebates.

“This is a 40-year career politician dabbling in economics and business, which he probably has no business doing,” Renacci said.

He asserted that the Tax Cuts and Jobs Act encourages U.S. car makers to build their products in the United States, although the latest Lordstown layoffs and the decision to build the Chevy Blazer in Mexico came after the legislation was enacted. Lawmakers need to figure out how to help plants like Lordstown without hurting the entire industry, he argued.

U.S. Rep Tim Ryan, who arrived at the union hall after the event was over, said he planned to introduce companion legislation in the House when it returns from recess in mid-September. “I’m thinking there will be a lot of members from the industrial Midwest that will be supportive of it,” he said.

During the program, UAW Local 1112 President Dave Green praised Brown as “a true public servant” and “a voice for working people” across Ohio.

Warren Mayor Doug Franklin, who joined Green’s praise of Brown, also voiced his support for the legislation.

“For far too long, the Mahoning Valley and other regions of Ohio like ours have borne the brunt and the burden of unfair trade,” Franklin said. “This act will help all of us.”

Published by The Business Journal, Youngstown, Ohio.