Corporate welfare wars, Carolina style
South Carolina whipped North Carolina and its biggest city in the corporate welfare wars this week, leaving Nikki Haley beaming and Pat McCrory dismissive.
Giti Tire Corp., based in Singapore, picked a site 40 miles south of Charlotte for its first U.S. plant. The $560 million factory next to Interstate 77 may lead to 1,700 jobs in a region that lost its textile industry over the past 20 years because its homegrown companies couldn't compete with imports from China and other Asian nations. Giti now makes its tires in China.
Lash Group, a health-care consulting company owned by Chesterbrook, Pa.-based Amerisource Bergen Corp., is consolidating offices into a $57 million headquarters in Fort Mill, about five miles from the state line and 15 miles from its executive offices near the Charlotte airport. It plans to move 1,200 jobs there. Lash's growth from a tiny consulting firm is one of Charlotte's most impressive success stories over the past 20 years.
LPL Investment Holdings Inc., a Boston-based brokerage and investment-advisory company, is moving 1,000 Charlotte workers to Fort Mill. In 2006, LPL entered Charlotte through its purchase of Uvest, which helped smaller banks sell mutual funds, annuities and other investment products. Uvest, founded by veteran Charlotte banker John Robison, started in downtown Charlotte.
South Carolina is promising various “incentives” to the three companies, including about $38 million to Giti for land and road development.
Free money is a can’t-miss opportunity for the companies, each publicly traded. Amerisource Bergen Inc. has a market cap is $16 billion, while LPL’s is $5 billion. Giti is valued at about 4.7 billion Chinese yuan, or about $750 million at recent conversion rates. But every penny counts when companies play states and cities off each other during relocations and expansions.
South Carolina Gov. Haley took credit for using other peoples’ money. “We are the nation’s tire capital, and Giti’s decision to come to our state is another great sign that our economic development efforts are paying off for the hardworking people of South Carolina,” she said in a statement.
North Carolina Gov. Pat McCrory made lemonade. “I’m not going to get in a bidding war for jobs that are 5 miles away from where most of the employees are going to be working,” he told Time Warner Cable News June 17. “Many of those employees are going to be living and spending their money in North Carolina.” The moves will result in less income tax and property tax collections for Charlotte and North Carolina, more for York County and South Carolina, but not enough to sweat over, Charlotte Chamber President Bob Morgan insists. He says the relocations show how North Carolina needs to lower its taxes to compete with South Carolina.
“Charlotte doesn’t need anybody’s sympathy,” Morgan says in a telephone interview. “Our regional economy is growing, and this is hugely positive for the economy. We’ll get our share.”
While it’s no fun to lose promising, growing companies that provide paychecks for more than 2,000 people, it was only a few weeks back that the Charlotte Knights, a minor-league baseball team, moved to downtown Charlotte from Fort Mill, Morgan notes. For North Carolinians, that’s “our share.”
One suspects Haley would take that trade any day of the week.