As you read the News & Observer‘s lead story today about the new incentives deal for tire makers, be sure to hop over to the business page.
David Ranii’s latest article tells us:
Goodyear Tire and Rubber Co. may be controversial among the politicians on Jones Street, but Wall Street investors are mostly bullish on the company and its prospects.
“We’re a long way from where we were at the trough, which was 2003,” said analyst Kirk Ludtke of CRT Capital Group, who recommends buying Goodyear stock. “There were serious bankruptcy concerns then. I don’t think anybody is thinking that way now. It’s a pretty dramatic turnaround.”
But what has cheered analysts may not be what politicians and community leaders want to hear: cost-cutting, plant closings and a new union contract that significantly lowered starting pay. At the same time, however, concerns that the Fayetteville plant would be shut down motivated the state to offer incentives.
So let me recap: Goodyear is more likely to survive because market signals have directed company executives to get rid of costly, inefficient operations ? the types of operation that can be propped up by government giveaways. Does this give you any confidence that Goodyear’s Fayetteville plant will ever thrive again without your taxpayer dollars?
John Hood has more in today’s Daily Journal.
