It all started in 1993. The Folsom administration, in conjunction with Alabama Power, worked behind the scenes to score a commitment from Mercedes-Benz to build its North American manufacturing facility in Vance, just outside Tuscaloosa.
So would begin a trend that continues to this day throughout the southeastern United States. Twenty-five years after the Mercedes-Benz announcement, Toyota and Mazda followed Mercedes’ lead and announced they, too, would be building a manufacturing facility in the Yellowhammer State.
These auto manufacturers didn’t come to Alabama out of the goodness of their hearts. Civic leaders had to lure them here with enticements known as “economic incentives.”
With those incentives, which have come in the form of tax abatements or infrastructure improvements, elected officials have made it clear they value the economic investments these automakers are willing to make in the state.
And why not? A rising tide lifts all boats. These companies hire people who contribute to the local economy and pay taxes, and that makes the state better as a whole.
But is there a point at which these auto manufacturers might use their clout beyond gaining assurances they have what they need to operate locally? Could they collectively influence Alabama’s government to act in ways not necessarily in the people’s best interest, but rather to better their own bottom lines?
By now you’ve probably heard the term “Big Mule” tossed around, usually in reference to state politics. The ongoing demise of the Business Council of Alabama was thought to be a breakup of a Big Mule coalition that included such Alabama household names as Alabama Power, Regions Bank and Blue Cross Blue Shield of Alabama.
The term comes from the previous century and refers to the economic elites in the state, mostly out of Birmingham, that included steel manufacturers, coal mining companies, railroads and other big businesses. These so-called Big Mules collaborated with the big agricultural interests — the planters — mostly out of the state’s Black Belt region, and ruled the state government in Montgomery.
Throughout this era of Alabama politics, these Big Mules have also been a target of enterprising populist politicians. Former Alabama Gov. “Big” Jim Folsom successfully ran as an opponent of these interests.
As it goes, you live by this sword. You can die by this sword as well.
Fast-forward to 2018. For whatever reason, Alabama’s politicians and the consulting class that advises them see touting an unwavering allegiance to President Donald Trump as the best path to electoral success in GOP primaries.
In one TV spot, Alabama lieutenant gubernatorial hopeful Twinkle Cavanaugh ends her commercial with a side-by-side image of her and Trump; if you didn’t know better, you might think they were siblings and even went to the same hair stylist.
Her opponent, Lt. Gov. Will Ainsworth, isn’t that much better, touting his Trump credentials throughout this Republican primary election season. Yet, he was Alabama’s co-chairman for Sen. Marco Rubio’s 2016 presidential campaign.
That takes us straight to the top of the ticket and Gov. Kay Ivey. She wasn’t shy about running alongside Trump when she had three other competitors vying for the Republican Party nod.
“Alabamians very much favor President Donald Trump,” Ivey said in one ad released back in March. “I very much support his agenda, and I just wish we could get Congress to go along with it.”
She seemed willing to go all-in for Trump’s agenda, right up until she walked away with the nomination by avoiding a runoff with a commanding win in last month’s GOP primary. Now she has second thoughts about at least some elements of the Trump agenda.
“Import tariffs, and any retaliatory tariffs on American made goods, will harm Alabama, the companies that have invested billions of dollars in our state, and the thousands of households which are dependent upon those companies for a good-paying job,” Ivey said in a release exactly two weeks after her June 5 primary victory. “I strongly oppose any efforts that may harm those companies that employ thousands of Alabamians and contribute billions to our economy.”
The implication was that she wasn’t entirely on board with Trump’s trade policy. She validated this a few days later in a letter to Commerce Secretary Wilbur Ross and released to the media: “I respectfully ask that you not recommend to President Trump the levying of trade tariffs on automobiles and automotive parts.”
If Donald Trump is indeed the Holy Grail of Alabama politics, it must take a significant force to deviate from the Make America Great Again gospel. In this case, it wasn’t Alabama Power, Blue Cross Blue Shield of Alabama or the beleaguered Drummond Co.
It was Hyundai, Mercedes, Honda and perhaps Toyota and Mazda using their sway to get Ivey and about a dozen other special-interest groups to oppose an essential element of Trump’s 2016 presidential campaign, which was to level the playing field the U.S. is on with its international trade partners.
It’s certainly valid to be opposed to this hostile trade policy. Alabama does have a lot to lose. But the losses are levied on the status quo, which for the most part are the entrenched interests. The reason the U.S. Chamber of Commerce opposes Trump’s tariffs is not ideological. It’s self-serving.
For a moment, take a broader look at trade policy. In an ideal world, which the Earth is far from being, free trade absolutism would be best. The world isn’t perfect, and there are actors, particularly in China and the European Union, willing to make up their own rules that suit their interests.
If the market price is lowered because a foreign actor wants to keep so much inventory as to intentionally depress the price and gain a competitive advantage over U.S. farms, what would the appropriate response be? Do we continue to suck it up as a nation and subsidize it with an already bloated federal farm bill?
Those are some of the players that support Trump’s agenda. While the arrival of auto manufacturing has been a positive for the state, having an economic policy that benefits just one sector is short-sighted.
Yet, we still do it. Case in point: This push by our elected leaders in Montgomery to preserve the status quo in favor of automakers that would be stung by an import tariff on cheap Chinese steel.
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