Local Politics

Easley Nixes Goodyear Grants; Special Session Planned

Posted August 30, 2007
Updated August 31, 2007

— House Speaker Joe Hackney said Thursday that he plans to bring lawmakers to Raleigh next month to consider overriding Gov. Mike Easley's veto of legislation that would have provided Goodyear Tire and Rubber Co. with up to $40 million in state grants.

The special legislative session likely would be held Sept. 10 or 11, Hackney said. Senate leaders said they were informally gauging sentiment about an override, but would wait until the House acts to decide what they would do.

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 expanded 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 had expressed concerns about the legislation in recent weeks, saying he felt there was a better way to work with existing companies. He vetoed the bill Thursday, saying he couldn't sign the bill in good conscience, saying it would allow Goodyear to lay off as many as 700 workers and still qualify for the grants.

"(This bill) would set a dangerous precedent for North Carolina’s economic development policy and is not fair to her taxpayers," Easley said in issuing his eighth veto since 2002. "It calls for the state to give up to $40 million in cash to an existing company in one county with little or no regard for how much the company actually pays in state and local taxes, what wages it pays now or in the future or whether it lays off nearly 25 percent of its work force. Never in the history of the state has anyone given a company up to $40 million and allowed them to lay off hundreds of workers."

Hackney fired back that Easley pushed a much larger tax break package to lure Dell Inc. to North Carolina that allows the computer maker to cut up to 40 percent of its work force per year.

"Who's going to put in $200 million and then start cutting jobs? That's not what this is about," he said. "We ought to come up with something that we can all agree with, but we've had great difficulties working with (Easley) on this."

The governor has proposed his own legislation to provide financial incentives for manufacturers to expand in North Carolina. The American Productivity and Competitiveness Act of North Carolina would provide state and local grants to manufacturing companies that employ at least 1,500 people in distressed counties.

Elaine Mejia, project director of the nonprofit North Carolina Budget and Tax Center, said any incentives offered to businesses are bad policy.

"Do we ever want the taxpayers of the state, taxpayers who live everywhere in the state, to be subsidizing a handful of corporations?" Mejia asked.

But Hackney said he believes Goodyear will move the Fayetteville jobs elsewhere without the state grants.

"We can't afford to lose that," he said. "(Easley) needs to work with the Cumberland people and not against them."

Cumberland County lawmakers had said in recent days that they would push for a special session to override the veto.

Easley said, however, that he doubted that some legislators who voted for the Goodyear bill understood that it was written specifically for the company. He predicted that getting 60 percent of lawmakers to support an override would be difficult.


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  • horseonthefly Sep 1, 2007

    After reading some more of the comments, a few more remarks

    1. Goodyear's CEO made b/t 10 and 11 million last year, NOT 100 million.

    2. The bill requires a corporate investment of 200 million in the plant, what company is going to invest that kind of money in a plant and then shut it down?

    3. A portion of the bill that wral FAILED to mention (because it may have portrayed the story a little differently, i.e. $$$ not go to Raleigh) is that the grant requires that the money be spent on worker training, NOT on machinery. Many people in the plant will need training, some of which takes 4 weeks to complete.

    4. Even if there was a reduction in the work force at the plant, no one would be fired and left out on the street like some of you have implied. It would be handled by retirements. The average age of the work force in the plant is over 40, therefore most of them are up for retirement. In fact, they're still hiring because retirements are happening faster than they can hire people.

  • Karmageddon Aug 31, 2007

    The guvernator finally showed some backbone....good for him

  • TheWB Aug 31, 2007

    Iworked for goodyear as a temporary,and could not get on,because they say i failed some stupid test.I have a mba,and yes they should not get it.Hope they leave fayetteville.With all the money coming from the new jobs coming to fayetteville,who needs them.-------------------------------------------------------
    050462 ???????

  • 050462 Aug 31, 2007

    Why do you all keep saying about the 700 being laid off?GOODYEAR IS HIRING!!!!!!!!!!!HELLO!!!!

  • 050462 Aug 31, 2007

    Iworked for goodyear as a temporary,and could not get on,because they say i failed some stupid test.I have a mba,and yes they should not get it.Hope they leave fayetteville.With all the money coming from the new jobs coming to fayetteville,who needs them.

  • JDPike Aug 31, 2007

    If this was something for Raleigh it wouldn't have any problem being passed, but since it is outside the triangle why waste time on it. A lot of the people in Raleigh need to stop looking down their noses at the rest of the state, you are not the only ones funding the budget, so we should get our fair share also. So what if you have to wait 5 mins. extra to get on your new road that was supposed to save you time, it takes me 20-30 mins. to drive 6 miles in the afternoons to get home. Companies moving to Raleigh are given all kinds of incentives to locate there, why not give incentive to an existing company to stay? Oh, that's right, it's not in Raleigh.

  • horseonthefly Aug 31, 2007

    Just so you folks know, easley is no great protector of the 700 that could be laid off, he is the screwer of the 2700 that get laid off when the plant shuts down. If there was any danger to the employees in the bill, the union would not be helping goodyear lobby for it. And Goodyear already said that if this is not resolved in "a timely manner" that they would begin to redirect investments elsewhere. All easley is doing is protecting his personal interests. He already said he had his own version of the bill that would open up the availability of grants to more companies (closer to Raleigh) and thus spend more of our tax dollars. He just wants his name on the bill so he can say look at this great thing I have done for nc industries. Also, if Goodyear leaves, NC, cumberland county, and Fayetteville loses 2700 jobs @ avg $90,000/year (benefits included because most of that money goes into the local economy as well) comes to 243 million dollars per year just in lost wages...

  • ThinkChick Aug 31, 2007

    Why not just give that $40m directly to those folks who might be thrown out of work?? Oh because that is a handout?! Ah...but it's a handout anyway.

    Interesting they can find $40m for corporate welfare but they can't find money to fix the roads.

    By the way, did you all know that 92% of the NC Budget cannot be touched - education, welfare and medicare/medicaid are always gimmies. So when these guys are going to "cut spending" they are only talking about 8% of the budget. Which part of the remaining 8% will go for Goodyear? Oh...right...none of it...

    We will pay for it as taxpayers. Beware the new ability of counties to levy taxes. NC has to be one of the most taxed states in the nation. Why are we such a desirable place to live again?!?!?

  • cam7002 Aug 31, 2007

    Oh, yeah, great. So Hackney wants the people of NC to give a huge tax break and incentives to a company that is repeatedly in hot water for its race and gender discrimination? What a slap in the face to women and people of color.

  • Mustange Aug 31, 2007

    Look you can debate this for ever, but dont forget everyone that the Democrats where the one that sold the country on NAFTA and every since NAFTA was approved the economic stucture of America has gone down the tubes textiles went first steel mills next eventuly if you dont help out whats left of our big employers the economy will take a hit like we have never seen.ITS SIMPLE NO JOB, NO MONEY, NO MONEY, BAD ECONOMY AND ITS COMING SO GET READY!!!