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Copyright (c) 1995 Fordham University School of Law
Fordham Urban Law Journal


Fall, 1995

23 Fordham Urb. L.J. 101


By Kary L. Moss, Esq. *



In 1991, General Motors Corporation (GM), the world's largest automaker, announced that the company would close 21 plants, thereby terminating 74,000 jobs by 1995. 1 As part of the plan, GM would cease its Willow Run Plant operations in Ypsilanti Township and move them to Arlington, Texas. 2 Seven years earlier, GM had promised to maintain 4,900 jobs at its Willow Run plant for 12 years after receiving significant tax abatements. 3 In total, combining all abatements received since 1975, GM obtained an estimated $ 1.3 billion in tax abatements. 4 Under the 1991 plan, 4,014 jobs were lost at the Willow Run plant, and 10,000 to 18,000 jobs were lost at parts suppliers and other related industries. 5 The Township's effort to force GM to comply with its earlier promises by taking the company to court was ultimately not successful. 6

This example is one of many that demonstrate the emergence of a newly recognized phenomenon called "corporate welfare:" 7 a series of tax abatements and other financial advantages given to companies by states and municipalities with the expectation of increased employment opportunities for its residents. 8 The most significant cost of these agreements between cities and companies to bring in or maintain jobs is the loss of a substantial amount of public money to corporate pockets, with little or no return. To make matters worse, in the current legal realm, municipalities have little ability to hold corporations to the job creation promises that ...
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