NC tire plants get up to $60M incentives
September 18, 2008
A state panel has awarded two tire plants in eastern North Carolina grants of up to $30 million each over the next 10 years if they upgrade their operations and keep jobs they''ve already created, as reported by the Associated Press. The state Economic Investment Committee''s unanimous decision to help the Goodyear Tire & Rubber Co. plant in Fayetteville and Bridgestone Firestone North American Tire LLC plant in Wilson came slightly more than a year after the Legislature passed a new kind of incentives program. While most incentives programs approved over the past decade rewarded companies that created new jobs or relocated in the state, the Job Maintenance and Capital Development grants benefit companies who retain their current work force levels. The grant program will help prevent large employers in economically distressed regions of the state from moving overseas.
The two plants currently employ more than 4,000 workers. The September 2007 legislation, which didn''t mention either plant by name but was clearly targeted for the tire makers, allows a company to qualify for incentives if it already employs at least 2,000 workers and agrees to invest $200 million in machinery and equipment over a six-year period. Average wages must remain 40 percent higher than the local average. Goodyear could receive up to $2.5 million this year for worker training expenses or other taxes and fees should it have at least 2,398 employees as of Dec. 31. Bridgestone''s level would have to hire 2,083 employees and contract workers. Each company could receive a maximum of $2.5 million this year and no more than $4 million in any additional year, up to a cumulative $30 million. Local governments also must give property tax breaks as part of the agreement. The grant amounts would be reduced proportionately if they fall short of the employment targets. The original legislation passed in the summer of 2007 was designed to benefit only Goodyear''s Fayetteville plant. Gov. Mike Easley vetoed the legislation, saying it would set a "dangerous precedent for North Carolina''s economic development policy." Instead of attempting to override the veto, legislative leaders worked with Easley to retool the bill with more wage and employment level standards and to open the grants to Japan-based Bridgestone Corp., which was already upgrading the Wilson plant. The North Carolina Institute for Constitutional Law has a lawsuit pending challenging the law that would benefit the tire makers, arguing the state constitution bars targeted tax incentives to large corporations.