Alabama Senator Richard Shelby has emerged as the leader of Republican opposition to a federal rescue of the Big Three U.S. automakers. Shelby would have us believe that his position flows out of a deep belief in market forces. “The strength of the American system,” he said recently,” is it allows us to take risks—to create, to innovate, to grow, to succeed and sometimes to fail.”
While Shelby (seen in photo with Saddam Hussein) is credited by some for consistency in that he also opposed the big federal bailout of financial institutions, he’s been called a hypocrite because his home state lavished major economic development subsidies on Asian and European automakers—a total of more than $750 million to Mercedes, Honda, Toyota and Hyundai over the past 15 years. These transplants, all non-union, have given the Yellowhammer State one of the country’s largest auto sectors, albeit one that is foreign controlled.
Shelby insists that Alabama’s handouts to the foreign automakers are not relevant to the current debate, but what he and his critics are both ignoring is that the funds channeled to the likes of Mercedes and Honda have not been only state and local. The federal government has also provided assistance to the transplants, and Shelby, along with other members of the Alabama Congressional delegation, helped that happen.
A stroll through the archives of Alabama’s newspapers on Nexis makes this clear. In 1993, when Mercedes was lured to the state with a $250 million incentive package, Shelby praised the deal, stating: “Alabama put together a smart investment package that in both the short and long term will yield solid results for our state” (Birmingham News, 9/29/93). Federal money helped pay for some of the highway improvements that were promised to Mercedes to make the site more appealing (Birmingham News, 10/21/93).
In 1999, when Honda was induced to build a plant in Alabama with a $250 million package of its own, the Alabama delegation quickly mobilized. On May 7, 1999, Michael Brumas of the Birmingham News reported: “Alabama members of Congress said Thursday they will be looking for ways the federal government can help underwrite part of the costs associated with building the new Honda plant at Lincoln. And the lawmakers pledged to help the automaker maneuver through the federal bureaucracy as it prepares to build the plant.” The article said Shelby, as chair of a transportation appropriations subcommittee, was expected to funnel money for road projects near the site.
In 2001, when the Korean automaker Hyundai was deciding where to locate its first U.S. plant, Shelby and other members of the Alabama delegation met with the company (Birmingham News, 10/11/01). After the state won the plant with yet another package of around $250 million, Shelby arranged for $445,000 in federal funds to go to the Alabama Tombigbee Regional Commission, which planned to arrange free bus and van service to take construction workers to the Hyundai site (Montgomery Advertiser, 9/10/02). And these are only the cases that found their way into the press.
Shelby is far from the only senator to have used his office to arrange for federal funds to help a company in his state. But the fact that Shelby has worked so hard for the foreign automakers and now opposes measures deemed necessary to protect the jobs of three million American workers in the auto industry and related sectors makes one wonder whether he should be seen as a U.S. Senator or a foreign corporate agent.