You read that right.

After laying off 10,000 workers last year, with plans in place to cut up to 30,000 more, Ford reaped a quarter of a billion dollars in tax savings due to the American Jobs Creation Act of 2004.

http://www.msnbc.msn.com/id/11008158/site/newsweek/from/RS.5/

Quote :

"[bTax Holiday[/b] How the nonsensically named American Jobs Creation Act of 2004 allowed Ford to slash jobs while reaping huge job-creation tax benefits. Jan. 24, 2006 - It's almost enough to make you laugh—bitterly, of course. Here was Ford Motor Co. announcing yesterday that it had cut 10,000 jobs last year and that it will cut up to 30,000 more. But shedding jobs at muscle-car acceleration rates didn't stop Ford from pocketing hundreds of millions of dollars courtesy of the American Jobs Creation Act. No, I'm not making this up. Right there, on page 2 of one of its news releases yesterday, Ford said that "repatriation of foreign earnings pursuant to the American Jobs Creation Act of 2004 resulted in a permanent tax savings of about $250 million." Hello? How can you simultaneously cut jobs and benefit from the American Jobs Creation Act? Welcome to the wonderful world of Washington nomenclature. Ford, understandably, declined to expand on its news release. But my calculations indicate that Ford last year brought into the United States about $850 million of profit that it had earned overseas but did not have to share with the Internal Revenue Service. Let me hasten to say that I've got no problem with Ford bringing this money home. Ford is battling for survival, and every $850 million helps. It would have been remiss not to have taken advantage of the idiotic legislation that Congress adopted and that President Bush signed despite objections from his Treasury Department and Council of Economic Advisers. My problem is with the legislation, and especially with its misleading name. Companies don't add jobs based on one-time chances to repatriate money from overseas. Congress should thank its lucky stars that federal truth-in-labeling laws don't apply to names it accords to legislation, because almost every dispassionate analyst agrees that the American Jobs Creation Act didn't create jobs in the United States. The only possible exception: short-term paper-shuffling positions added to allow companies to produce documents that let them qualify for the tax break without doing anything differently than they'd have otherwise done it. In case you've forgotten, this law gave U.S. companies a one-time chance in 2005 to repatriate profits made overseas and pay only 5.25 percent tax on them rather than the standard 35 percent. It was a tax holiday, and the biggest celebrators were pharmaceutical and tech companies that had traditionally kept tons of profits overseas. But Ford saw its chance and took it. Despite dozens of pages of regulations issued by the Treasury Department to restrict use of the money to uses approved by Congress, the whole thing was unenforceable. Money, you see, is what economists call "fungible." Any dollar is like any other dollar. Ford, for instance, could use its $850 million of repatriated profits for a permitted use such as buying equipment, freeing up $850 million for other, non-approved uses. American Enterprise Institute fellow Phillip L. Swagel, formerly chief of staff of Bush's Council of Economic Advisers, told my Post colleague Jonathan Weisman last August that "you might as well have taken a helicopter over 90210 [a Beverly Hills Zip code] and pushed the money out the door." That's a memorable quote—and a dead-accurate observation. I suspect that when the Treasury finishes analyzing its corporate income-tax receipts for 2005, it will discover that a significant part of last year's surge in collections stems from this one-time tax break. Companies took advantage of it because they prefer paying a small tax today to possibly paying a higher tax tomorrow. It's the same kind of thing car companies do when they make car-loan terms longer. They add sales today but at the expense of sales tomorrow. I hope that Ford returns to prosperity and begins adding U.S. jobs again, the way I hope that General Motors and Chrysler do. But the Ford example shows how nonsensical the name American Jobs Creation Act truly is. The bottom line: When you see a piece of legislation carrying a name that sounds too good to be true, it probably isn't true."

1/24/2006 5:19:13 PM

well, war IS peace, you know.

1/24/2006 5:33:18 PM

The thread on Ford, and the thread on Unions thats basically about Ford weren't enough? Couldn't this be discussed there?

Quote :

"I heard the same thing on the radio about the basically 2 year paid vacation time as a buffer zone, while offer retraining programs I believe. And in the long run this is supposed to help make ford more profitable. Granted they have some work to do to make themselves more appealing, but its best to get this kind of thing out of the way first so once they start rebuilding their image, they can keep it strong. Ford seems to have handled this responsibly from everything I've heard."

If they can make money by cutting jobs (but still treating the laid off employees really well) so as to be more profitable, then I don't have much of a problem with it even if they are using legislation in an unintended but legal way.

[Edited on January 24, 2006 at 5:47 PM. Reason : .]

1/24/2006 5:44:34 PM

Fine. But let's not call it the Job Creation Act.

1/24/2006 5:47:09 PM

operation infinite justice

1/24/2006 5:48:50 PM

that article is poorly written. It tries to link the tax savings to the job cuts, when there is no connection except in timing.

Ford's cutbacks had NOTHING to do with the tax savings. Thats some shady junxtaposition by the writer for shock value.

[Edited on January 24, 2006 at 5:58 PM. Reason : 2]

1/24/2006 5:52:21 PM

You're an idiot.

The only place that he mentions the tax savings is where he directly quotes Ford's new release: "repatriation of foreign earnings pursuant to the American Jobs Creation Act of 2004 resulted in a permanent tax savings of about $250 million."

Tax savings. Not reduced labor costs. Nothing misleading at all.

[Edited on January 24, 2006 at 6:08 PM. Reason : Never said anything about tax savings necessitating layoffs.]

1/24/2006 6:01:37 PM

actually, you're the idiot for not understanding my post.

Quote :

"How the nonsensically named American Jobs Creation Act of 2004 allowed Ford to slash jobs while reaping huge job-creation tax benefits."

what does Ford's job cuts have to do with the tax benefits? Nothing. But you wouldn't guess that from the title.

So what are you bitching about? The name of the act? Who cares?

1/24/2006 6:11:55 PM

The tax benefits come from the American Jobs Creation Act of 2004, which Ford gets even though they are not creating jobs and are in fact cutting them.

You're going to be hard pressed to show that the author in any way tried to link the tax benefit with the layoffs in any way other than the irony of the act's title.

1/24/2006 6:22:37 PM

the act is only for corporations to pocket more money.

1/24/2006 6:26:59 PM

^ As always, corporate welfare.

We don't collect a lot of tax money from corporate taxation. Why not eliminate it the corporate tax? Then we wouldn't have to spend all this money on corporate welfare. Of course, we'd do that anyway, but I can dream, right?

1/24/2006 10:58:16 PM

Corporations don't really pay the corporate income tax, we do in the form of increased prices on the products/services they sell. Abolish the corporate income tax altogether.

1/24/2006 11:34:01 PM

good job ford

1/24/2006 11:37:17 PM