More Problems For Volvo In South Carolina

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Weeks after announcing the firing of 125 workers in South Carolina – or five percent of its Palmetto State workforce – Chinese-owned Volvo confirmed this week it was halting production at its Ridgeville, S.C. facility.

The move – which the company insists is temporary – is being blamed on a parts shortage tied to tariffs imposed by U.S. president Donald Trump. The company did not identify the parts in question, however – nor did its executives offer a time frame for the duration of the shutdown.

News of the shutdown was first reported by David Wren of The South Carolina Daily Gazette.

The announcement is the latest blow to befall the crony capitalist automaker – which was supposed to create 4,000 new jobs at its massively subsidized $1.2 billion plant in the Palmetto Lowcountry. Volvo hasn’t come close to hitting that mark, with the company holding at approximately 2,500 positions prior to its recent reduction in force.

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It also comes as S&P announced it was lowering its outlook on Volvo from “stable” to “negative.”

“The negative outlook indicates our view that Volvo Cars will face many challenges in the next two years, threatening its recovery to a sustainable growth path,” analysts for the rating agency noted.

In other words, Volvo isn’t going to make good on its lofty promises to Palmetto State taxpayers anytime soon.

The problem with that? Palmetto State taxpayers have already dropped hundreds of millions of dollars on this project – including $40 million for a state-of-the-art interchange on Interstate 26. That’s money which could have been allocated toward far more pressing infrastructure needs.

At least $330 million in taxpayer-funded subsidies (that we know of) were earmarked for Volvo’s Berkeley County facility – including state grants for the development of its Lowcountry manufacturing facility as well as tens of millions in “economic development bond proceeds.” Most of this money was blown between 2015-2017 – including $110 million taken from Berkeley County taxpayers.

Volvo also continues to receive millions of dollars in undisclosed, recurring subsidies from state taxpayers for “job development” tax credits.

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RELATED | VOLVO SLASHING JOBS IN SOUTH CAROLINA

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Legislative leaders have long insisted these massive investments in speculative corporate projects were warranted.

“Folks argue we shouldn’t be trying to lure these companies with incentives, but the bottom line is: if we don’t, then those manufacturers will not locate here,” fiscally liberal state senator Larry Grooms told The (Columbia, S.C.) State at the time.

Grooms, incidentally, was recently rated the most fiscally liberal “Republican” in the S.C. Senate.

FITSNews has made no secret of our contempt for government-subsidized economic development (a.k.a. crony capitalism).

“We reject crony capitalist handouts on principle,” our outlet wrote back in 2015 at the time the Volvo deal was made. “They are patently unfair, and South Carolina’s escalating use of them to reward favored corporations at the expense of small businesses and taxpayers is killing our state’s consumer economy.”

As crony capitalist schemes like these keep escalating, South Carolina continues to lag behind the rest of the nation in jobs and income growth.

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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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