ECO550 Week 5 Discussion - In an effort to stop the migration

Week 5 Discussion Forum (ECO550 Managerial Economics)

In an effort to stop the migration of many of the automobile manufacturing facilities from the Detroit area, Detroit's city council is considering passing a law that would give investment tax credits to auto manufacturers. What this means is that it would reduce auto manufacturers' costs of using capital and high-tech equipment in their production processes. On the evening of the vote, local union officials voiced serious objections to the law.

1. As a union official, outline the basis of your objection.

2. As a representative of one of the auto manufacturers, what are your counter arguments?