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AIM seeks to expand successful job retention program to help ALL Missouri manufacturers

Building on the success of the original Manufacturing Jobs Act of 2010, Associated Industries of Missouri (AIM) is again proposing incentives for all types of manufacturers to help retain jobs at Missouri manufacturing facilities.  Incentives would also be available for suppliers to qualifying facilities.  And no, we don’t mean tax credits!

In 2010, Missouri faced the grim possibility of massive job losses and potential closure of a large auto manufacturing plant – the Ford plant in Claycomo, MO.  AIM was part of a diverse team that included unlikely allies from labor and business and across the political spectrum that joined forces to help pass the Manufacturing Jobs Act during a special session of the legislature.  The bill, sponsored by then Rep. Jerry Nolte and handled in the Senate by then Senator Luann Ridgeway, was unique in that it provided benefits to a company for making an infrastructure investment even if no additional jobs were created.  A company would be rewarded for retaining jobs if the company made a significant investment in infrastructure to make a new product or to expand the manufacture of an existing product.

The results have far surpassed the goals of simply retaining the jobs at the Ford facility.  Since passage of the bill, Ford has invested $1.1 billion in the Claycomo plant, the plant is manufacturing a new product, and more than 4,000 new jobs have been created at that facility alone.  But there was also growth at the General Motors plant in Wentzville, MO, and at suppliers across the state.  In fact, according to a report issued by the Missouri Economic Research Information Center , manufacturers and suppliers in the auto industry have invested $1.29 billion in capital investments, added or retained nearly 14,000 jobs, and supported an additional 21,000 jobs since the Act was passed in 2010. Remarkable outcomes!

Now we need to make this program available to ALL types of manufacturers and their suppliers.  Too often, when multi-state manufacturers are faced with downsizing, available incentives are weighed with other factors such as labor and utility costs and the facility with the best bottom line deal wins.  The losing state finds a facility or manufacturing line closing, resulting in job losses and often a downward spiral in entire communities.  The impact is widespread as it also hits the closed facilities’ suppliers, and the tax base of not just the state, but local governments, schools, etc.  And the impact is often worse in rural areas where a single employer may provide a higher percentage of employment than in urban areas and the preservation of that manufacturing facility, or the facility to which its product is supplied, is even more important.  These decisions are made frequently and too often, our economic development professionals have little to offer companies to stay in Missouri.

Senator Brian Munzlinger, Representative Nick King and Representative Nate Walker have filed bills in the House and Senate to change that.  SB 284 and HB 627 would allow manufacturers that make infrastructure investments to make new products or to expand manufacturing of existing products to retain withholding taxes on jobs retained at their facilities. Suppliers to participating facilities would be able to retain withholding taxes on new jobs that are created at their facilities, with a lower job requirement than is required under other programs.  The benefits are exactly the same as those provided in the auto industry. And taxpayers are protected because the investment amounts are very significant and there are no tax credits associated with the program.

Associated Industries of Missouri was proud to author this program and will work hard to pass it in the 2015 legislative session.  It’s time to make our Missouri manufacturing locations competitive!  We will keep you posted of the bills progress.

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