Millions Spent Luring Dell To NC Can't Be Recouped

Dell  announced Wednesday, four years and two days after its grand opening, 905 workers will lose their jobs when its desktop computer manufacturing plant closes.

AP Photo/GERRY BROOME

North Carolina politicians wary they may be blamed for a boondoggle have assured that taxpayer money that helped lure a massive Dell Inc. computer assembly plant to North Carolina will be recovered.

But millions of dollars spent on road upgrades and worker training may never come back after the plant near Winston-Salem shuts down in January.

Dell announced Wednesday, four years and two days after its grand opening, 905 workers will lose their jobs when its desktop computer manufacturing plant closes.

The vast majority of the tax breaks, cash grants and other promises worth up to $318 million that lured Dell was tied to the company meeting milestones for jobs created and money invested in the project.

The company got the potentially rich deal by seeming to offer steady assembly work paying an average of $14 an hour for hundreds of dislocated furniture and tobacco workers in central North Carolina.

State and local officials have stressed their contracts include provisions forcing Dell to repay big chunks of money.

"We made it very clear to them (Dell officials), and they already understood it quite frankly, that every red cent of incentives money had to come back to the people of North Carolina," Gov. Beverly Perdue said this week.

Winston-Salem Mayor Allen Joines said since the plant only operated for four years, the city's contract spells out that Dell will repay all $15.5 million in upfront city spending.

That includes $7 million for the 120-acre plant site Dell now owns, $8.5 million to clear and prepare the land before construction, and forgone city property taxes.

"We will continue to comply with the agreements that were structured. If there is money to be repaid we will," Dell spokesman David Frink assured Friday.

But about $18 million in public money spent to help Dell gear up appears not to be repaid.

A preliminary estimate by the state Commerce Department this week indicates Dell may have received about $3 million in tax breaks for meeting early hiring and investment goals. An agency spokeswoman was unable to offer more specific details Friday.

The state Transportation Department spent about $9.3 million widening roads and upgrading interchanges to accommodate the plant and traffic resulting from it, DOT spokeswoman Greer Beaty said.

The state spent $3.6 million to train workers for the Dell plant, while the Golden LEAF fund provided another $1.3 million to screen about 8,000 job seekers and help train about 1,200 hired to work at the plant.

The fund, which uses part of North Carolina's share of payments from a cigarette industry lawsuit to encourage economic growth, is likely to seek that money back, foundation president Dan Girlish said.

But improved worker skills represent "an investment that will continue to benefit individuals and employers" after Dell is gone, Assistant Commerce Secretary Kathy Nil said.

Plant workers have declined to discuss their pending unemployment, fearing that if they were identified by reporters they would lose their severance packages and other benefits. Dell spokesman Frink said only that all employees sign a confidentiality agreement when they join the company.


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  • by BEACHBUM3 Location: NAGS HEAD on Oct 12, 2009 at 01:20 AM
    If you ask me business mangers of these companys are so busy manger their own stock options an micro mangering these companys employees every move within the workforce that they no longer have the time or the inklingto actually manger these large coporations when it comes to their finicianals. If these mangers/ ceo. presidents would be more hands on when it comes to the accounting of the companys assests to the shareholders then there would be less likely to make this hugh decesions making mistakes as to plant locations decesions. As someone else state here if this plant was to have located in eastern nc they probably would still be in business at the new plant location for eastern north carolininas work cheaper than central nc worker do
  • by Kimo Location: Belhaven on Oct 11, 2009 at 07:38 AM
    Bill! You are right - she wouldn't lie. She simply doesn't know any better.
  • by Bill Location: Greenville on Oct 11, 2009 at 05:09 AM
    governor perdue made a speech this week that said we would get every red cent back. could she be wrong again. surely she would not lie.
  • by fed up Location: greenville on Oct 10, 2009 at 08:27 PM
    It really dont matter if they pay it back, Purdue will make sure it is wasted on some other stupid adventure!
  • by Nathan Location: Eastern NC on Oct 10, 2009 at 06:23 PM
    I don't understand, and would like to see in the article, why they are so willing to pay the state back all that money rather than just continuing to employ 905 people. At an average of $14/h, that's... OK, that's $26 million a year, but they're making money. With Windows 7 about to drop, they're not doing badly. Though I suppose if they send the jobs overseas, they can get children in sweatshops to do the job for much less. Dell is one company that can build a computer for less than I can, but their parts are generic, mass produced, and low quality, except for the processor, which is all most people care about. That and the OS. I use top quality hard drives, video cards, motherboards, and cases when I've built mine, and I can build a comparative system for about twice what theirs are, but minus the monitor and operating system. They make their own monitors, and get Windows at the bulk rate (though Linux is free, so I can do that). Well, this is one more reason to not buy a Dell.
  • by Jeff Location: Winterville on Oct 10, 2009 at 03:24 PM
    They should do the responsible thing and pay back every penny. They should also offer a nice severance to the people who are displaced.
  • by FrEaKnAsTy Location: G-Vegas on Oct 10, 2009 at 12:22 PM
    Could be a lot more of these newer plants leaving. I'm watching out for QVC, they could be next to pull up and leave, those employees who got terminated for the 401k fraud have put a strain on the rest of the employees who had nothing to do with it.
  • by Dave on Oct 10, 2009 at 12:13 PM
    Can't say we didn't see this coming. Everything eventually leaves NC.
  • by Clifton Location: Washington on Oct 10, 2009 at 11:44 AM
    Figure this. If Dell came to Eastern NC, paid an average of $12 per hour instead of $14, look at how much money Dell could have saved with 905 empolyees at $2 dollars less per hour. Big business is big at killing itself these days.
  • by Gumby on Oct 10, 2009 at 11:05 AM
    Oh no belle no dell for me.
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