Monday, May 26, 2008

the C-J on KY's "response " to GE

From the editorialists of the C-J...

Yesterday's confirmation that General Electric plans to put Louisville's Appliance Park up for sale should have come as no surprise.

The warning signs have been there for some time. Wall Street analysts have long expected GE to make an exit from the appliance business. GE says that its Louisville-based Consumer & Industrial division rakes in less than 8 percent of the company's revenues, and that the Appliance Park manufacturing operation lost $24 million last year.

It is an anxious moment -- especially for Appliance Park's 5,500 employees, but also for the city and state, which have already lost thousands of manufacturing jobs.

The first question that must be addressed, of course, is now what?

There are reasonable grounds for optimism. James P. Campbell, the divisional CEO, says he will stay in Louisville to cut the sales deal, and assured local officials that he will invite the city to meet with bidders with the aim of maintaining Louisville as the center of a worldwide appliance enterprise, either by means of a GE partnership or joint venture or through an outright sale.

Clearly, that must be Plan A. Mayor Jerry Abramson will need to make a strong case to the new management for remaining in Louisville, and the state should stand ready to offer aggressive, though responsible, incentives....

How are incentives "responsible"? Why is it ethical to benefit some firms over others? Why is it practical to try to pick winners in this arena? Why is it preferable to benefit some rather than simply producing a more palatable business environment in general?

To position itself for the new economy, Kentucky needs more emphasis on education, research and attracting good jobs in the professional, business service and high-tech sectors. Yet, during the recent legislative session those interrelated areas generally received less support.

The GE announcement is yet one more wake-up call. Did Frankfort hear it?

Again, all about targeting particular industries and jobs. And why does the C-J say nothing about unions, artificially high wages and their various inefficiencies, and the need for that wake-up call?


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