Governor Seeks New Legislation For New Economic Development Program

The American Productivity and Competitiveness Act of North Carolina

August 29, 2007

WILSON COUNTY NC NEWS -- North Carolina Governor Mike Easley has announced he will seek new legislation in the 2008 session of the General Assembly to secure major manufacturing investments from existing industries in disadvantaged parts of the state. The new program would complement the already existing, One North Carolina Fund grant program and the Job Development Investment Grant program.

Titled "The American Productivity and Competitiveness Act of North Carolina," the Governor's proposal would have the state partner with qualifying existing industrial companies that commit to invest substantial amounts modernizing their facilities to ensure greater productivity and global competitiveness in their operations. The program would operate in a fashion similar to current incentive programs that require approval by the Economic Investment Committee and award grants measured by a portion of new taxes resulting from the investment and by training costs.

The Governor said, "As our economy has globalized, our largest industries can now direct investments to areas of the country and the world where they can achieve the lowest production costs. My plan will create a state program to partner with local governments and secure commitments from major anchor industries to modernize operations and enhance their presence in North Carolina. The economy is changing rapidly. Those companies that invest in technology and in a high-skilled workforce will succeed. Those which do not will fail. North Carolina wants to partner in success."

At least one North Carolina business has already signaled that a grant under the proposed legislation could secure its commitment to upgrade a major existing manufacturing plant in North Carolina to state-of-the-art status.

Steven Akey, Vice President of Government Affairs for Bridgestone Firestone North American Tire, LLC, which operates a large plant in Wilson, said: "We have been briefed on Governor Easley's proposed legislation, which is an innovative, on-target program. It would be a major step forward in our ability to stay globally competitive in a changing economy by supporting worker training and encouraging investments to enhance productivity. If this were to become law, and we received a grant, we would be prepared to move forward with substantial new investment in our Wilson facility and retain employment at least at current levels in the years to come."

Commenting on the Governor's program, Manager of the Wilson plant, Jim Pridgen said, "A grant from a program like this would enable our Wilson facility to secure our position as a world-class operation that can compete and win in the global economy."

Grants would be available to manufacturing facilities that require assistance to modernize in the state and that employ at least 1,500 workers in high-paying jobs in Tier 1 distressed counties. Companies receiving grants would be required to maintain current levels of company jobs, pay wages that equal or exceed 140% of the county average wage, and provide quality health insurance and benefits. They would also be required to maintain clean environmental and workforce safety records and not be delinquent on taxes owed.

A key feature of the new program would be a requirement that local governments partner with the state when awarding inducements for the company's commitment to invest. Current programs such as the One North Carolina Fund also require local government participation.

Remarking upon partnership between government and private enterprise, Governor Easley said: "Any effort to retain a major economic engine in a community needs to be a fair partnership between the state and local governments  one that appropriately balances both the risks and the rewards of the expanded economic activity."

Likewise, Officials in Wilson County, where Bridgestone Firestone has been considering future expansions, agreed. "As it has in the past, our county stands ready to do its part and will partner with the State," said Frank Emory, Chairman of the Wilson County Commissioners. "It is vitally important that we work together to ensure that Bridgestone Firestone remains an enduring presence here and enhances its technology to meet the demands of globalization."

Senator A.B. Swindell, (Dem) of Nash County, said, "I'm looking forward to working to build consensus in the General Assembly for the Governor's plan. It's a creative model that can work for other significant industries in North Carolina and guarantee that we're the most competitive and innovative state in the country."

Praising Bridgestone and speaking in favor of the Governor's plan, Representative Jean Farmer-Butterfield, (Dem) of Edgecombe County, said, "Bridgestone Firestone provides high-paying jobs to many of our citizens. The Governor's plan is exactly what is needed to keep communities like Wilson strong."

Representative Joe Tolson (Dem) of Edgecombe County, said, "This will guarantee that world-class companies invest in Eastern North Carolina. We need to come together on this fair plan to ensure that we help our long-time employers stay and grow here."

State grants under the program would be measured against the income, franchise and sales tax revenues paid to the state as a result of the company's commitment to maintain and modernize operations, as well as the cost of training workers to operate new equipment and manage new lines of production. Companies could also receive refunds for near-term sales taxes on electricity and natural gas, which are scheduled to be phased out for all manufacturers as a result of legislation recently signed by the Governor.

Qualifying companies that fail to follow through on commitments would see their benefits reduced or terminated, and companies that shut down facilities could be required to repay any incentives received under the program.