Local News

Lenovo Says It Will Create Another 400 Jobs

Posted October 27, 2005

— Chinese computer maker Lenovo Inc. plans to add 400 jobs and build offices in suburban Raleigh for its international division, the company announced Thursday.

Lenovo, which became the world's third-largest personal computer maker by purchasing IBM Corp.'s PC division earlier this year, employs 1,820 workers on IBM's campus in Research Triangle Park. The company will move five miles away to Morrisville after Lenovo builds a 500,000-square-foot facility in early 2007, according to the office of Gov. Mike Easley, and they will leave behind a disappointed Durham County.

Wake County leaders said Lenovo came to them.

"We were not going to get into competition with our sister county, and this should benefit the whole region," Joe Bryan, chair of the Wake County Board of Commissioners said.

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Incentives deals with state and local governments could net Lenovo $11 million or more if the company meets its job creation goals, economic development officials said.

Georgia and New York were among North Carolina's competitors for the headquarters and new jobs, Easley said. The 400 jobs, which will include management, research and sales positions, will pay an average of $70,000 a year, he said. The first 80 positions should be filled next year before the move is complete, according to Lenovo.

Lenovo had threatened to leave the state unless it received tax breaks to help pay for the technology campus it plans to build.

Incentives were considered in the decision about where to locate, said Bill Owens, Lenovo's senior executive in RTP. Moving out of the Triangle area of North Carolina, were IBM has had a presence for decades, also would have been a difficult decision, he said.

"The incentives only happen if we deliver. Nobody's writing us a check up front," Owens added.

Bob Orr, of the N.C. Institute of Constitutional Law, said he believes it is "bad public policy as well as unconstitutional" to offer incentives.

He said the state dug a big hole when it dangled more than $240 million in incentives to lure Dell to North Carolina.

"Now we're seeing local companies threatening to move unless there's some sort of subsidy to them," Orr said.

Orr sued the North Carolina to challenge the incentives offered to Dell.

He said he was going to take a closer look at the incentives offered to Lenovo.

"Incentives are one of those items people would rather not have to deal with,” Easley said. “I know I would rather not have to deal with, but the problem is you have Georgia and New York putting incentives on the table."

Lenovo's executive offices are in Purchase, N.Y., near IBM's headquarters. But the Raleigh-Durham area is considered a major center for Lenovo's international division for research, design and administrative functions for computers such as ThinkPad laptops.

Lenovo's $1.75 billion acquisition of IBM's personal computer division was one of the biggest foreign acquisitions ever by a Chinese company. Corporate parent Lenovo Group Ltd. is already Asia's biggest computer maker.

Later Thursday, Easley also announced British-based aerospace equipment supplier Smiths Aerospace Components Inc. will hire 305 employees within the next five years at a new turbine engine plant in Ashe County.

Smiths Aerospace deals extensively with both Boeing Corp. and Airbus, providing equipment for both civil and military aircraft. The firm, which could receive up to $2.4 million in cash grats for jobs it creates, looked at sites in both North Carolina and South Carolina before choosing West Jefferson, Easley's office said.

The new jobs -- mostly for machine operators -- will pay $520 week on average. The company already employs 295 people at a similar plant in Asheville.

For the week, Easley has announced the creation of 1,253 new jobs at four locations.

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