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Ralph Nader > In the Public Interest > Chrysler in Toledo

Toledo, Ohio — Chrysler Corporation, having just merged with the German auto giant to become DaimlerChrysler, is teaching this city about some state of the art corporate socialism. Last year, Chrysler announced that it would expand the existing Jeep plant if the City government would subsidize this project with local tax dollars and a 100% property tax exemption.

With over $9 billion in cash reserves and reporting record profits, Chrysler wants to freeload on the backs of small businesses and home owners who have to pay their fair share for city services and who paid for their land and improvements with their own money.

The Mayor is on bended knee, one step ahead of whatever Chrysler demands in money and extended secret negotiations. It has taken 16 months for the City to issue a signed agreement with Chrysler, while violating one law after another including those that block the right of residents and citizen groups to obtain information, receive proper notice of proceedings and participate in the decisional process.

The new factory site involves about 400 acres of which Chrysler owned around sixty percent. The City agreed to use taxpayer money to buy out the eighty three homes and numerous small businesses on the remaining acreage and pay for site preparation costs, accept Chrysler’s environmental liability risks, give the company a tax holiday and receive no guarantees as to how long Chrysler will stay in Toledo or how many jobs it will guarantee.

Chrysler is talking about a total of 4900 jobs which include those in the existing plants that are to be expanded. But UAW workers and others in a position to know expect that figure to come down by 2000 jobs because of ambitious automation plans. A whole stable, crime-free community of modest middle class homeowners and business is to be evicted, their homes and buildings demolished for King Chrysler’s profits. The City has already strong-armed most of the homeowners, paid inadequate compensation and bulldozed many of the houses to break the will of those remaining homeowners (nine of them) who are resisting. Formal eminent domain citations are expected shortly.

The amazing aspect of this corporate-government assault on the community, whose residents and ancestors have called home for nearly a century, is that these 23 acres in the lower corner of the area most distant from the proposed plant are not even needed for the Chrysler expansion. The auto company wants it for landscaping and one of its maps indicated the area was to be empty space. When this was pointed out, Chrysler responded by saying it would need this space in the future for some unspecified truck staging area.

Federal and state courts have ruled that governments can take private property by eminent domain and transfer it to a private corporation as long as it serves a “public purpose.” Jobs are considered a public purpose. In this Chrysler case, apparently a forthcoming reduction of overall jobs is considered a public purpose by the local authorities.

There are few if any boundaries to the definition of a public purpose. But what if the seized property serves no public purpose because it is not needed for any public purpose when it is taken. This is a question that the courts should be asked to judge.

The City of Toledo is in serious financial straits. Moreover major repairs are needed for its public works, it schools and other public buildings. The roughly $300 million subsidy deal for Chrysler erodes the City’s tax base and increases its debt to the federal Department of Housing and Urban Affairs (HUD). To pay back HUD the City has to hold the job total at 4900 workers who will pay a 2 1/4% municipal tax. The agreement with Chrysler is so one-sided in favor of the auto company that if a private attorney drafted such an instrument for his or her client, the latter would have cause to accuse that attorney of legal malpractice.

To further punctuate its feudal subservience to King Chrysler, the city government declared the 23 acre neighborhood a “blighted area” to secure federal subsidies and grease the way for expropriating the homes. By demolishing houses that were bought-out, the city created its own blight on the ground against the opposition of the remaining homeowners.

When a lawless city government ignores all other municipal interests and serves a greedy company that is shaking down Toledo to add to its hyper profits by not contributing to the school, police, fire and other budgets, corporate irresponsibility reaches new levels of license.

Chrysler CEO Robert J. Eaton is now the co-chairman of the DaimlerChrysler — the fourth largest industrial corporation in the world. Mr. Eaton’s personal compensation package, pursuant to the merger, amounts to at least $112 million.

His company should pay the City for the land and improvements, pay their share of property taxes and pay each of the homeowners, whose lives were so sharply disrupted, $100,000. Because this controversy has the potential to reach from Detroit all the way to the company’s new headquarters in Stuttgart, Germany.