BATH — General Dynamics, which owns Bath Iron Works, is embarking on a statewide public relations campaign to ask the Maine Legislature for a $60 million tax break over the next 20 years for their operation in Bath.
While never actually mentioning their requested tax break, a Nov. 17 Portland Press Herald commentary by BIW President Dirk Lesko did pull all the emotional levers about jobs, shipbuilding history and more.
General Dynamics claims that in order to stay competitive they must have state financial support – what I’d call “corporate welfare.”
Already over many years General Dynamics has received more than $200 million in state and local tax breaks for BIW. In 2013 General Dynamics asked for another $6.3 million tax break from the city of Bath. I worked with a small committee that organized a local campaign to oppose the tax cut, and in the end the City Council voted to reduce the tax break, giving General Dynamics $3.7 million. Citizen intervention saved the community $2.6 million that could be used for other local needs, like fixing crumbling infrastructure and paying salaries for firefighters and police officers.
Now General Dynamics is daring to come around to the already financially strapped state of Maine with their corporate silver cup in hand, asking for an additional $60 million.
On top of this, the Providence (Rhode Island) Journal recently reported that General Dynamics spent $9.4 billion buying back its own stock from 2013 to 2016.
In the Nov. 3 article, William Lazonick, an economist at the University of Massachusetts at Lowell and an expert on stock buybacks, says, “I think, as taxpayers, we’re being taken for fools. At a minimum, I would have a rule saying, ‘You’re not getting any subsidies if you’re doing buybacks. You’re showing us you don’t need the money.’ ”
The article also suggests that buybacks are bad for workers and average shareholders because the real beneficiaries are savvy traders who can time their sales and corporate brass with pay packages linked to stock performance and earnings per share.
In fact, the CEO at General Dynamics, Phebe Novakovic, last year made $21 million ($5 million of which was a bonus). It was Novakovic who accelerated General Dynamics’ stock repurchases after taking over the corporation in 2013 – so her bonuses are likely because of these fiscal shell games. Novakovic netted $49 million in take-home pay in her first four years as General Dynamics CEO, with an annual average of 43 percent of her total compensation coming by way of stock-based pay.
The company plays one state against another, saying that if they don’t get more tax breaks in Maine, then they can’t maintain their operations, because a fellow shipyard in Mississippi gets tax breaks from that state. So the poor in Maine are pitted against the poor in Mississippi, and all the politicians – Republican and Democratic alike – give these greedy corporations everything they want.
General Dynamics, like most weapons corporations, get the vast majority of their operating funds from the U.S. Treasury. The taxpayers pay the freight from the start. But then the military-industrial complex adds another twist – a strategy to extract even more profit from the taxpayers by going to the states, and even to small cities like Bath, demanding more tax breaks.
We all should demand that our state legislators oppose this corporate welfare giveaway. Before General Dynamics gets any more state taxpayer dollars, they should be required to begin a transition process to build commuter rail systems, tidal power and offshore wind turbines to help us deal with our real problem – global warming.
We have the right, and the responsibility, to speak out and demand that this nonsense stop now. We are handing a collapsing nation, facing the ravages of global warming, to our children and grandchildren. The least we can do is call upon on state legislators to go to Augusta and say “no” to General Dynamics. Enough is enough.
Let General Dynamics take back the extravagant pay raises and bonuses from their top executives before they come poormouthing to our already financially barren state treasury.
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