Mississippi Electric Car Manufacturing Short of Job Target

When taxpayer dollars fund private companies, citizens expect to see improvements in their local economies. Electric car company GreenTech Automative fell short of those expectations after failing to create 350 manufacturing jobs in northern Mississippi within three years. Instead of stimulating job growth, the GreenTech venture has citizens wondering why the government risked nearly $5 million on one fledgling company.

GreenTech Overestimates Future Job Growth

Economic development incentives have the potential to attract booming industry and provide much-needed job growth in impoverished areas. In exchange, companies that cash in on these programs gain access to low-cost loans and tax breaks. For GreenTech, the incentive was a $3 million state-sponsored loan to build a factory in Robinsonville, Mississippi, and a 10-year exemption from state income and franchise taxes. Tunica County also received about $1.9 million to accommodate the project.

The state hoped the project might promote commercial investment and combat Mississippi's high unemployment rate, which averaged 6.5 percent in 2015. To satisfy the agreement, GreenTech was required to hire 350 employees with minimum salaries of $35,000 by the end of 2014 or within three years of starting production. The company also agreed to invest $2 billion in regional ventures, fulfilling the first $60 million by the 2014 deadline. As it turns out, GreenTech executives were overconfident about the company's goals from the start, once citing 1,500 expected job openings and an annual production target of 250,000 cars.

Citizens Want Job Growth to Increase Locally

GreenTech raised substantial capital from Chinese residents, who each contributed $500,000 to qualify for permanent citizenship. Yet, the promised job growth never happened, and in 2014, the company requested a renegotiation of the contract terms. GreenTech executives are also avoiding media questions about the company's employee count, which appears to be approximately 75 people. The manufacturer now has a looming debt payment of over $150,000 in June 2016 and an unpaid property tax bill from the previous year. According to Norma Anderson, a Tunica County tax assessor, the current dilemma is stalling the supervisory board from voting to grant a 40 percent tax break.

While any economic improvement in Mississippi is a positive step, residents and tax officials are concerned that manufacturing jobs at GreenTech and other companies may go to workers from outside Tunica County, further undermining the goal of this expensive project. Residents are alarmed by the ongoing trend of development incentives that dips into local taxpayers' pockets, only to benefit workers from more economically stable areas. One possible reason for the trend is the shift from labor-intensive positions to skilled mechanical and technical work in the manufacturing industry, making it difficult for workers with limited income and education to qualify.

Mississippi has one of the weakest economies and highest unemployment rates in the country, motivating state officials to make risky compromises to win profitable commercial projects. However, county governments can only improve local job growth by addressing skills gaps in education and attracting companies that are compatible with the local workforce.

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