Only five years ago, political poobahs in North Carolina were crowing loudly, laughing giddily, and slapping each other's backs. We won, they hooted!
Only five years ago, political poobahs in North Carolina were crowing loudly, laughing giddily, and slapping each other’s backs. We won, they hooted!
Won what? The national bidding war among various states to bribe Dell, the computer giant, to build its new assembly plant on their turf. By putting up about $318 million in tax giveaways, cash, grants, and other freebies, North Carolina officials “won,” and in October 2006, there was a glorious grand opening of the $7 million Dell plant in Winston-Salem. The future was bright.
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But, uh-oh: sudden storm clouds. This October – a mere four years and two days after that ribbon cutting – Dell announced that it was cutting out for Asia, closing the plant, discarding the 905 people who worked there, and kissing off North Carolina. Thanks for the memories.
Now, the political poobahs who had so happily thrown the public’s money at Dell, are claiming to be skinflints, insisting that they had driven a hard bargain with the slippery giant. The govnernor rushed out to declare that the deal included iron-clad clawback provisions: “We made it very clear to them,” she said, that if they left, “every red cent of incentives money had to come back.”
Some of it will, says Dell, but not all of it. Some $9 million of state money to widen roads and upgrade interchanges is not expected to be repaid, nor will about $5-million-worth of worker training and hiring services, and $3 million in tax breaks that Dell already pocketed.
Trying to put a little happy face on this bad deal, one state official noted that while their jobs are gone, workers still benefited from the training they received. Sure – as long as they’re willing to take their training to China to get a job. Along with most other computer makers, Dell has now moved all of its computer manufacturing offshore.
“Despite details spelled out in Dell deal, North Carolina might not recoup all costs,” Austin American Statesman, October 10, 2009.
“Dell to close last big U.S. plant,” Austin American Statesman, October 8, 2009.