Back to November 2008 home page

Triad

Officials: Deal still computes 

Four years ago, Winston-Salem Mayor Allen Joines called Dell’s decision to build a factory in Forsyth County a “special Christmas present” — one that the city, county and state promised to pay more than $300 million to get. Now it appears that Santa may take it back or at least let someone else play with it. The Wall Street Journal reported in early September that Dell, in a cost-cutting move, is considering selling its factories around the world to contract computer manufacturers and closing the ones it can’t sell. The Round Rock, Texas-based computer maker won’t confirm the report but admits that it is “evaluating its manufacturing and distribution network.” The reason: The company’s profit dipped 17% to $616 million in the quarter ended Aug. 1, compared with the same period of 2007.

Joines isn’t worried yet. Company executives often cite the Forsyth County plant, which employs about 1,150 and makes desktop computers, as one of Dell’s most efficient. It likely would continue production under new management. “The folks at the Dell factory here say they’re continuing to add staff,” he says. A spokeswoman for the Winston-Salem plant wouldn’t confirm that, however.

And incentives used to get the plant could also help Winston-Salem keep it, Joines says. “If that facility is sold, then all of our money would be due to be repaid. There are some disincentives to that particular action.” Dell has collected more than $6.5 million from the city and about $1.2 million from the county so far. “I’ve done about 50 economic-development projects over the years. We’ve only had two where we had to use the clawbacks, but it’s good to have them.”

The state, which promised about $268 million over 15 years in tax breaks and grants, also has some safeguards. Deborah Barnes, a spokeswoman for the Department of Commerce, says the state has paid Dell about $1.5 million of a possible $14.1 million Job Development Investment Grant. That state money is dependent on the company reaching and maintaining employment and salary levels in each of the next 12 years, counting this year. It could be transferred to the new owners with the approval of a five-member state panel that oversees the grant.

Regardless, Joines says he’s glad the deal was made. “We’ve received very positive press regarding the fact that Dell was coming. That has not been diminished at all. The deal demonstrated our ability to put together a competitive package. It got the attention of other companies.”

Promises, promise

Talk about your degrees of separation. That’s the problem Winston-Salem officials have now that Charlotte-based Wachovia is being sold. In 2001, Ken Thompson, CEO of what was then First Union, won support for his bank’s acquisition of Wachovia — it also took its name — by promising to keep 3,000 jobs in the Twin City. That promise grew shaky after Thompson’s replacement earlier this year by Bob Steel. But with San Francisco-based Wells Fargo & Co. poised to buy Wachovia, that vow will be buried behind another layer of management — one that will be under pressure to make the acquisition work, presumably by cutting expenses. Winston-Salem Mayor Allen Joines says only that he’ll speak with the bank’s new owners at the “appropriate” time and that he’ll pitch the lower cost of operating in his city. Wells Fargo has made some promises, but they’ve been to Charlotte, where Wachovia has about 20,000 jobs. Queen City leaders might want to talk to their peers in Winston-Salem to see how much those promises mean.

 

KERNERSVILLEBlueScope Steel North America, which makes pre-fabricated steel buildings, will shut down manufacturing here in December, eliminating 175 jobs. The Irving, Texas, company will keep about 100 employees who work in engineering and customer service. It blamed the weak economy.

GREENSBORO — St. Paul, Minn.-based Deluxe plans to close its factory here in the second half of 2009, putting 117 people out of work. It makes paper checks. The closing won’t affect its 300-employee distribution center.

ELKINYadkin Valley Financial will pay $92 million for Charlotte-based American Community Bancshares and its 13 branches. Its subsidiary, American Community Bank, will keep its name.

HAMPTONVILLELydall, which makes heat and sound filters for automobiles, will add 100 jobs by 2010, bringing employment to more than 350. It will consolidate production after closing a St. Johnsbury, Vt., plant that employed about 190.

HIGH POINT — Workers at Thomas Built Buses voted 770 to 377 against decertifying the United Auto Workers local. It has represented employees since 2005.

WINSTON-SALEM — The Forsyth County Airport Commission will erect three buildings containing about 30 hangars at Smith Reynolds Airport. The project will cost about $2.8 million. Construction will begin in spring.

GREENSBORO — The National Science Foundation designated N.C. A&T State University an engineering research center, granting it at least $18 million in the next five years. A&T will focus on metallic biomaterials, with research in biomedical engineering and nanobio applications.

LEXINGTONKathy Ireland Home by Martin will open an 80,000-square-foot East Coast distribution center this month. The San Diego-based furniture maker was not sure how many will work at the center, which likely will be managed by a third party.

HIGH POINTEmerson et Cie, which makes wood furniture, purchased Bentley Churchill, a privately held upholstery manufacturer based in Taylorsville. Terms were not disclosed. The purchase doubles Emerson’s work force to nearly 40.

WINSTON-SALEMDataChambers planned to spend at least $600,000 to expand its 20,000-square-foot data- storage center by 25%. The company, which provides electronic-data back- up for companies, says it probably won’t add workers because of the expansion, expected to be completed this month.

GREENSBOROUnifi plans to sell a vacant 300,000-square-foot factory in Yadkinville for $7 million to an undisclosed buyer. The textile maker expects to net $5 million from the deal, which it hopes to close by the end of the year. It still has four factories and three warehouses in Yadkinville, where it employs about 1,200.

WINSTON-SALEMHanesbrands plans to cut Tar Heel employment nearly 1,350 by mid-2009 as part of an overall reduction of 8,100 in the U.S., Mexico and Central America. About 5,000 workers will remain in North Carolina. As part of a companywide move to transfer more production to Asia, it closed a knit-fabric mill in Forest City, idling 470, and a yarn plant in Gastonia, which had 140 workers. By the end of the year, it will close a warehouse in Rockingham that employs 15 and a yarn plant in Eden, laying off 120. It will close a knit-fabric mill in Eden next year, shedding about 600 jobs.

WINSTON-SALEM — Drug developer Targacept plans to continue work on a potential Alzheimer’s drug despite inconclusive results from a clinical trial. TC-1734 performed no better than a placebo in the 12-week study of 567 patients, the company says. Targacept believes the results would have been better had the trial lasted longer. The drug also is being tested for treatment of schizophrenia. Targacept’s partner in developing TC-1734, British drug maker AstraZeneca, is expected to decide in December whether to continue its support.