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At a time when South Carolina’s critical infrastructure needs remain unmet and its small businesses and individual income earners are struggling to make ends meet, Scout Motors – a subsidiary of über-woke Volkswagen – is receiving hundreds of millions of dollars for a new intersection adjacent to its envisioned manufacturing facility near Blythewood, S.C.
“The Scout Motors Drive Interchange project on I-77 is now underway,” crony capitalist governor Henry McMaster proclaimed. “This project will provide the infrastructure needed to support the thousands of new jobs being created and lay the foundation to bring even more private investment and jobs to the Midlands.”
Anyone care to remember the last time McMaster was this gung-ho about a crony capitalist interchange? Yeah… to say that project did not end well for citizens or taxpayers would be a colossal understatement.
Scout is an even bigger gamble for McMaster and his legislative allies than their ill-fated courtship of the Carolina Panthers six years ago. The interchange launched this week is part of $650 million in taxpayer-funded infrastructure associated with the Scout project – and part of a broader $1.3 billion subsidy package.
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Why is the state of South Carolina subsidizing the construction of an EV plant at a time when this market is collapsing? A time when the administration of Donald Trump is curtailing government support for it?
This media outlet staunchly opposed the Scout deal. And we staunchly oppose Scout’s latest bid to rig the market – a crony capitalist carveout which would give the company yet another undeserved leg-up on its competitors.
The company’s preferred legislation – H. 3777 – would allow direct auto sales in South Carolina only for companies which “own and operate a manufacturing factory or assembly plant” in the Palmetto State, which “manufacture or assembles vehicles propelled wholly or in part by an electric motor” and which have “no franchised dealers in this state in the ten-year period before this item became effective.”
In other words, just Scout.
In fact, it appears as though Scout’s entire project depends on lawmakers passing this market-distorting carveout.
McMaster, incidentally, endorsed Scout’s carveout at this week’s press conference – but that wasn’t the only preferential treatment the governor is proposing for the company (again, with your money).
With Scout barely even tapping its first trench of taxpayer-provided largesse, its leaders are already asking for tens of millions in additional funding from the state for workforce training. McMaster is eager to oblige, too, proposing $10 million in one-time funding for “EV training” at South Carolina’s technical college system and nearly $100 million in annual funding for EV industry scholarships from the S.C. Education Lottery.
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RELATED | SCOUT SPAMS LAWMAKERS
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“I have asked the general assembly for $10 million more dollars in nonrecurring money to support EV (electrical vehicle) training at the technical colleges and I am requesting another $95 million in lottery funds for workforce industry scholarships,” the governor said at this week’s event.
In other words, South Carolina taxpayers not just having to pay for Scout’s new plant, they’re having to pay for its workforce training and its space in the state’s vehicle sales market.
McMaster’s enthusiasm for new Scout subsidies and carveouts encounter stiff opposition in the legislature – even from those who supported him on the original $1.3 billion agreement.
During an interview with FITSNews this week, state senator Josh Kimbrell took direct aim at Scout – arguing its investment in EV manufacturer Rivian immediately after receiving subsidies from South Carolina was dishonest.
“I’m very frustrated by how this Scout deal came together,” Kimbrell said. “That initially looked pretty good on paper – that Volkswagen was going to come in and make this work – but then Volkswagen, right after South Carolina got involved in that targeted tax package, went around and gave over a billion dollars to Rivian.”
“If you said you needed money to come here and then you turn right around and give a billion dollars to Rivian, that kind of frustrated me,” Kimbell added. “Essentially they took the money they said they needed from us to be here and then went and invested it in another company.”
Kimbrell also accused Scout of “flouting the law” related to its latest carveout request, which he said “will hurt another industry ecosystem that already exists here and will affect other jobs and economic opportunity.”
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Some TRUTH on the @Scout_Motors boondoggle South Carolina lawmakers approved in 2023. @JoshKimbrellSC – who voted for the bill – lays out why he is "really ticked off" at the company for not keeping its word. Full interview drops tomorrow… pic.twitter.com/qnLzlXtg1v
— FITSNews (@fitsnews) February 4, 2025
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Kimbrell has introduced legislation (S. 132) which would impose strict clawback provisions on the $1.3 billion Scout has already received from taxpayers. And if Scout decides to violate state law governing the sale of its EVs, it would direct McMaster’s administration to “end all projects that have commenced and… not initiate any new projects related to the incentive package.”
While Kimbrell deserves credit for acknowledging what a bad deal this has become – and taking steps to hold Scout accountable for its actions – the real solution to the problem is simply not getting entangled into these corporate welfare debacles in the first place.
“The question before the legislature is what does it mean to be a conservative in 2025,” one industry analyst tracking the debate told me. “Do we protect small businesses in South Carolina and support small businesses in South Carolina? Or do we continually give handouts to major corporations over and over and over again with no end in sight?”
That’s a question this media outlet has been asking for years… and sadly, state leaders keep answering it the wrong way.
As I noted last week, Trump has taken steps to shut down the preferential treatment being given to the EV industry (and further executive orders could take aim at additional subsidies).
“South Carolina should follow his lead,” I wrote. “Not only that, lawmakers need to ensure Scout Motors is held accountable for every penny of (and every promise associated with) the massive amount of taxpayer money the company has been gifted.”
A legislative hearing on Scout’s latest carveout request has been set for next Tuesday (February 11, 2025). Count on our media outlet to provide updates on the status of that bill – and Kimbrell’s clawback proposal – as they make their way through the S.C. General Assembly.
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ABOUT THE AUTHOR …
Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and eight children.
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2 comments
Bend over taxpayers. More coming
These manufacturers have multiple states vying for their business. To say that they needed the money to locate in SC isn’t to say they couldn’t open a plant without it. It means that they need that much to locate here, rather than somewhere else. It’s pay-to-play where the manufacturer has the upper hand. A lot of folks have no problem playing those games, which is why counties and cities all have their own economic development organizations. Sadly, it’s the way of our world, but it’s nothing new. This kind of stuff has been going on for decades. It seems that most folks like the overall economic boost that comes from having a large, successful employer in their area. Just look at the impact that BMW has had on the upstate, not only with it’s direct investment, but with the growth of other companies that popped up to support it. I dare say that their positive economic contribution has greatly offset any taxpayer investment.
Now, if we want to talk about the preservation of what is left of our state’s rural character, and the damage to it that is done by attracting industrial growth, that’s another matter. But to think that this state is going to attract major industrial and commercial growth by altering our individual and corporate income tax rates is just fantasy.