N.J.’s incentives to Mercedes couldn’t offset cost of doing business
JANUARY 6, 2015, 11:21 PM LAST UPDATED: TUESDAY, JANUARY 6, 2015, 11:28 PM
BY HUGH R. MORLEY AND LINDA MOSS
STAFF WRITERS |
THE RECORD
New Jersey “worked tirelessly” for months to persuade Mercedes-Benz USA to stay in Montvale, the car company said Tuesday, including several meetings and calls between Governor Christie and company CEO Stephen Cannon and a last-ditch offer three days ago.
The state wielded an arsenal of incentive programs that were revamped just over a year ago to enable New Jersey to award more generous tax breaks that would counter the high cost of doing business in the state.
Yet the state’s effort fell short, rebuffed by the reality that even the heavily fortified programs – which enabled New Jersey in 2014 to award about $2 billion in breaks – couldn’t negate the high cost of doing business in the state, and the lure of Atlanta, where the company said Tuesday it will move its heaN.J.’s incentives to Mercedes couldn’t offset cost of doing business
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While critics immediately suggested that the German car giant’s departure announcement showed the redundancy of the state’s strategy of offering big-dollar tax breaks, state officials dismissed that suggestion.
Michael Drewniak, a spokesman for Christie, said the governor “took a direct role in trying to keep Mercedes-Benz USA in New Jersey.”
Taxation is certainly a significant issue, but there are several other issues that put NJ at a competitive disadvantage. These are;
1. Higher cost of employee compensation (i.e. employees cost more in NJ than, say, in Virginia.
2. Real Estate. Same deal with this. It’s cheaper to operate a large building elsewhere.
3. Utilities.
I could probably go on and on, listing all the various line-items that businesses can get better rates elsewhere. The only businesses that operate here are simply here because they have to be here.
These issues did not seem to bother them in the past, they were just offered more money to move than stay and also to be closer to there manufacturing base.
Maybe Chris Christie can woo Jerry Jones to move his “beloved” Cowboys to MetLife and dispatch the Giants to Philadelphia and the Jets to Foxboro?
Sounds more like NJ just priced themselves out of the competition thanks to poor business practices, excessive costs, and the right-to-work attraction of the Southeast (Atlanta). Plus the wealth concentration is shifting from the tri-state area to the SE, and more of the retiring boomers who buy Mercedes cars are heading south. Sounds like they are following their customers. Yet more good jobs lost in NJ; BMW will be next. And we’re also making life difficult for Tesla thanks to connected auto dealers. Soon the state will be littered with old auto dealers like Ken Smith Chevy and Brogan Cadillac in Ridgewood. And we still owe $130 BILLION on our outstanding NJ state credit card bill for future public pensions & healthcare that remain unfunded.