Winston-Salem Mayor Allen Joines admits he’s frustrated with one of Forsyth County’s largest employers. He knows companies need to cut jobs in a downturn, but he says Dell Inc. should provide more details about the future of its local factory and how many it will employ. To get answers, he directed plant managers to appear before City Council this month.
They might disappoint him. The Round Rock, Texas-based computer maker doesn’t like discussing employment or wages even in good times. It asked the state to withhold that information five years ago, when it announced it would build the $115 million plant in exchange for as much as $280 million in state and local incentives. Now that times are tougher — net income fell 16% to $2.5 billion last year — it’s hard to imagine the company opening up more.
Dell acknowledged two rounds of layoffs in March and April but wouldn’t say how many workers were let go or how many remained. Joines says Dell cut about 150 employees in the first round and about 50 contract workers in the second. That leaves about 1,000 employees and 150 contract workers.
The plant must have 1,700 workers by October 2010, or Dell will have to return part of the $22.2 million in incentives it has received from the city and county. It won’t have to repay about $14.5 million for site preparation unless the plant closes before then. Half the remainder is safe because Dell met a requirement to invest at least $100 million. About $3.9 million is in doubt. How much Dell must repay depends on how far it falls short of its goal. At what Joines says is current employment, it would have to return about $1.2 million.
That’s not much of what it has received so far, but at least the local governments stand to get something back if things don’t work out. Of the $242 million in state incentives, only $8.8 million is tied to employment levels, with the rest coming from tax credits, training programs and other refunds — none of which will have to be returned.
Joines takes comfort that local governments insisted on clawbacks, though it wasn’t an easy process. “It took us six months to nail down. But in retrospect, it was a solid, well-written agreement that provides remedies if certain hurdles aren’t reached.”
Back to class
When she became UNC Greensboro chancellor in August, Linda Brady might have figured her teaching days were behind her. Not so fast. UNC system budget woes are forcing Brady and other UNCG administrators to return to the classroom. She’ll teach a course in international negotiations during the 2010 spring semester, filling a need in the school’s political-science department. UNCG will cut 109 jobs, 59 of them faculty, as part of its efforts to save about $10 million — more than 6% of its budget. Brady also has taught at the University of Oregon, where she was senior vice president and provost, Vanderbilt University and N.C. State.