Volkswagen layoffs loom amid questions of new “clawback” rules

May 28, 2013 4:46PM investigates how a new state law will fail to protect taxpayers from a recently announced layoff of 500 workers by Volkswagen. The auto manufacturer has received hundreds of millions of dollars in taxpayer money for its Chattanooga plant, and the state will likely be unable to recoup any of the money it handed the company to create jobs despite the layoffs. Beacon’s Trey Moore expressed concern about the effectiveness of the new clawback law.

“[W]hile the intent of the bill seems to be good, the final language appears to give ECD the discretion of whether to ‘clawback’ funds in the event a company reneges on its end of a deal. Since discretion is susceptible to political influence, a mandatory clawback provision is more appropriate when you’re dealing with taxpayer money.”

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