In 2008, the governments of the city of Chattanooga, Hamilton County, the state of Tennessee, and the United States all collaborated to provide Volkswagen (VW) with a $577 million subsidy package, the largest taxpayer handout ever given to a foreign-headquartered automaker in U.S. history. The bulk of the subsidy package, $554 million, came from local and state sources. The federal government also threw in $23 million in subsidies, bringing the grand total of taxpayer money that VW received in 2008 to $577 million. According to the Subsidy Tracker at the website of watchdog group Good Jobs First, the package provided to VW included “$229 million from the state for training costs and infrastructure; $86 million in land and site improvements from the city and the county; state tax credits worth $106 million over 30 years; and local tax abatements worth $133 million over the same period.” In exchange for this massive infusion of public wealth onto Volkswagen’s corporate balance sheets, the company promised to create 2,000 jobs in Chattanooga, bringing the price tag for each promised job to $288,500.When asked to respond to concerns about VW’s record-shattering subsidy package, then-Tennessee Governor Phil Bredesen, a Democrat, unabashedly replied, “I don’t know whether it’s fair that a Mercedes Benz costs $90,000, I just know if I want one that’s what I’ve got to pay.” Tennessee’s U.S. Senator Lamar Alexander, a Republican, applauded the deal as another significant mile marker on the way towards “Tennessee’s future” of becoming the “the No. 1 auto state in the country.”
