Easley's Development Proposal Could Doom Goodyear Grants

Raleigh, N.C. — Speculation heightened Wednesday that Gov. Mike Easley would veto legislation providing Goodyear Tire and Rubber Co. up to $40 million in state grants for upgrading its tire plant in Fayetteville.

Lawmakers last month approved a bill that would amend the state's Job Development Investment Grants program, which traditionally has provided tax breaks to companies looking to locate or expand in North Carolina.

The amendments would expand the scope of companies eligible for JDIG money to include "multinational heavy industry manufacturing" facilities that maintain their existing work forces and agree to invest at least $200 million to upgrade their plants over the next five years.

Although Goodyear wasn't mentioned in the bill, lawmakers said the proposal was written with the company in mind. Grants would be restricted to companies located in economically distressed counties and having at least 2,400 full-time employees. The grants would require each recipient to maintain its work force.

Goodyear employs about 2,700 people in Fayetteville and is Cumberland County's largest private employer.

Easley has expressed concerns about the legislation and is facing a Sept. 1 deadline to veto it or let it become law.

Late Wednesday afternoon, his office announced his intention to pursue legislative approval next year to entice manufacturing companies to expand in disadvantaged parts of the state.

The American Productivity and Competitiveness Act of North Carolina would provide grants to manufacturing companies that employ at least 1,500 people in distressed counties. The grants would come from both state and local sources.

“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,” Easley said in a statement.

Officials with Bridgestone Firestone North American Tire LLC said Easley's proposal could swing an expansion of the company's tire plant in Wilson. Local officials said they would partner with the state in providing the company with grants under the program.

However, Senate Majority Leader Tony Rand, a Cumberland County Democrat and Easley ally, said Goodyear deserves a custom-fit grant package after search-engine giant Google and computer maker Dell Inc. were offered hefty tax breaks to build new operations in North Carolina.

"Is it One North Carolina?" Rand asked, referring to a state economic-development fund. "Is that what we're trying to do, or are we playing favorites?"

State Rep. Rick Glazier, D-Cumberland, who sponsored the so-called Goodyear bill, said Monday he would call for a special legislative session to override any veto by Easley. Rand said he thinks lawmakers would be able to muster the three-fifths majority needed to override a veto, but he wouldn't definitively say he would push for a special session.

"We all have our responsibilities, and I intend to exercise mine," he said.