Gary Anderson

Gary Anderson

Bath Iron Works is currently competing for new contracts in a $19 billion bidding war against five other shipyards seeking to build 20 frigates for the U.S. Navy. In what is always claimed as being an unprecedented competitive environment, mega-corporate General Dynamics’ local subsidiary maintains that once again its survival is dependent on continued public largesse to pay its taxes. Once again the spectre of lost jobs is trotted out and statewide fears of loosing BIW’s economic stimulus altogether are rekindled. Once again they stand hard hat in hand asking for financial assistance, not with humility, certainly not with transparency, but with an all too familiar expectation of entitlement.

Meanwhile, BIW’s main competitor employs the same tactics to reduce its overhead in Mississippi. No matter who wins the brass ring of the actual contract award, both bring home the gold in their collateral competition for securing the greater corporate welfare. BIW loyalists argue that it is only doing what its competition does. It’s all about “competition.” Everyone seems to readily confuse the positive term “competitiveness” with the more base motive of maximizing “profitability.” If BIW needs a legitimate leg up in procuring contracts they should request it from their parent company which seems to being doing just fine given that in the last several years General Dynamics has reportedly spent $9.4 billion repurchasing its own stock on the open market.

BIW’s employees well deserve a paycheck on their own merits and not on the backs of other hardworking Mainers left fending for themselves in an equally competitive marketplace without needing the government reaching into their pockets in order to assist the deep pockets of one of America’s wealthiest corporations. I wish BIW workers all good things and whatever they can individually or collectively earn, but I don’t understand why my paycheck from a small local business receiving no government hand-holding should be required to subsidize the payroll of one of Maine’s foremost businesses, especially when BIW’s bottom line is totally taxpayer derived in the first place.

“Too big to fail,” or to pay their fair share. What a tiresome economic rationale. General Dynamics and BIW routinely expect their rank and file and Maine’ general citizenry to sacrifice towards unnecessary corporate welfare while hierarchical management portfolios and distant shareholders reap the ultimate benefit. Last year, General Dynamic’s CEO reportedly received $21M in personal compensation.

What average Maine business receives such taxpayer underwriting? When they suffer economic difficulty why doesn’t the “greater good” intervene? Why are Maine’s largest employers economically propped up when they can far better stand on their own than the mom-and-pop businesses asked to suffer additional taxes?

What sort of “economic development” justly asks taxpayers, especially those on fixed incomes, to continue shouldering increased financial burden so that one of the largest businesses in the state can improve its bottom line by continuing to can-kick its tax responsibilities down the road? The whole point of the original BIW state and municipal tax break was that, after 20 years of deferred taxes, BIW would eventually begin paying a greatly increased tax bill in full.

The Navy supposedly gets the best deal through such dog-eat-dog competition, and states where contracts are awarded supposedly benefit overall from being coerced into waiving taxes so revenue from continuing employment and commerce, even if greatly reduced, is sustained. Such winner loser economic competition, pitting city against city and state against state, has become a perverse reality of We the People vs They the Powerful.

In 1997, BIW convinced Maine’s legislature and Bath’s City Council to buy into Tax Increment Financing so that the shipyard could expand and revitalized its facilities by constructing a revolutionary Land Level Transfer Facility. The goal was “competitive efficiency,” meaning enhanced profitability by increasing productivity with less employees, not more. There were no traditional promises of job creation, but rather a publicly stated goal of cutting their workforce by a third. Those objectives were then achieved through major capital improvements substantially underwritten by a combined state and city tax credit of $197 million over a 20 year run. Bath’s contribution alone was $85 million. Despite a boasted 2,000 worker resurgence since 2014, Maine’s once largest employer now retains 5,700 employees from what was 8,500.

In asking Maine’s legislature and Bath’s City Council to embrace the original TIF deal, BIW fanned fears of relocation. In separately asking the DEP and the Army Corps of Engineers for an environmental permit they vehemently asserted that relocation was practicably impossible, that their survival depended on staying in Bath.

In 2013, BIW claimed dire need of an additional municipal tax break to remain “competitive.” After an unprecedented grassroots pushback, the City of Ships conceded only $3.7M of a $6.36M request. BIW accepted nonetheless while almost immediately landing a huge “unforeseen” government procurement. The ultimately unnecessary pocket change of $3,7M spread over 25 years remains “fortuitously” theirs.

When not asking for handouts large or small, BIW’s a very good neighbor. Bath and Maine are indeed fortunate to have its economic engine. But, it’s way past time to just say no to their ongoing addiction to low-hanging fruit.

Gary Anderson lives in Bath.

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