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.


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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