Tuesday, January 6, 2015

Why North Carolina is losing the biggest battles in the job recruitment war

Chalk up another loss on the economic development front for North Carolina.

Mercedes-Benz, after considering several cities in the state, is reportedly taking its U.S. headquarters to Atlanta. The luxury automaker joins a growing list of prestigious business brands who have thought about moving major operations to the Tarheel State, only to bypass us for other suitors.

Last year, a $107 million offer couldn't land Toyota's U.S. headquarters in Charlotte. They picked Plano, Texas. A whopping $683 million offer couldn't land Boeing's new 777x jetliner plant, which Washington state secured with a massive $8.7 billion incentives deal, then the largest corporate tax break in U.S. history.

Also in the last two years, the state lost out to Lancaster County on a $218 million Chinese textile plant and to Chester County on a $560 million tire plant. S.C. officials offered an incentives deal 10 times larger than North Carolina for the textile project and a deal with tens of millions more in tax savings on the tire project.

Gov. Pat McCrory, left, and Sealed Air CEO Jerome A. Peribere announced last year that the firm will move its headquarters to Charlotte, bringing 1,262 jobs.

Read more here: http://www.charlotteobserver.com/2014/07/23/5061311/another-charlotte-job-announcement.html#.VKwT1yvF9TI#storylink=cpy


To be sure, there have been big job recruitment wins in recent years, such as Sealed Air Corp.'s decision last year to move its headquarters and nearly 1,300 jobs to Charlotte, and MetLife's decision the year before to move about twice as many jobs to Charlotte and the Triangle. Still, there are signs of frustration setting in for Gov. Pat McCrory. He told business leaders at a gathering in Durham Monday that he doesn't have the tools he needs to attract big industry. He's asking for major legislation from lawmakers in the first two weeks of their new legislative session. He's said in the past that he needs a "closing fund" like S.C. Gov. Nikki Haley has for last-minute pot-sweetening, and administration officials have said the state's Job Development Investment Grant fund has been running low.

Clearly, something needs to be done. And Republicans running the legislature, bless their fiscally conservative hearts, haven't shown much appetite for throwing ever-bigger wads of cash at corporate suitors. But rightly or wrongly, job recruiting has devolved into a state-eat-state bloodsport. Either you outbid the competition, or you offer such a superior quality of life and workforce that the money doesn't matter. (Hint: Google and Facebook aren't in California for the tax rates).

North Carolina used to have something like that California approach to economic development. We didn't sweat the bidding wars. We invested in schools and universities to make them among the strongest in the region. We developed a reputation, as the New York Times put it in a 2013 editorial, "as a beacon of farsightedness in the South." Despite a legacy of not offering the biggest pots of money to relocating corporations, we still ranked at or near the top of business climate and job creation lists for much of the past two decades.

Nowadays, we're struggling to keep our teacher pay respectable and keep teachers from leaving the state. Lawmakers have a decision to make: either go all-in on the bidding war, as the governor seems to be asking, or increase funding for the state's true job creators -- its schools and universities. Our recent history suggests the latter economic development model works just fine.

-- Eric Frazier

18 comments:

Carolinian22 said...

At 46th place in teacher pay and 48th place in school funding and a 25% reduction in spending on a per pupil basis from 2008 to 2014, North Carolina could now be called a 'beacon of nearsightedness' with respect to education.

Unknown said...

Carolinian22, I would like to see the actual figures you use when talking about 25% reduction. Please provide, or maybe Ms Doss can provide.
And most importantly, you seem to be complaining about the amount of money spent, but mention nothing about the bloated, non-educational bureaucracy that has nothing to do with educating the kids.
The CMS mess is the biggest joke, and more money only means more money for the bureaucracy.

Paula McSwain said...

"And Republicans running the legislature..."

To the proofreader: The word is "ruining."

Cornelia said...

Mercedes is going to relocate many professionals. Such people want the option of enrolling their children in good public schools. While Atlanta proper's schools are awful, there are many good public school systems in metro Atlanta. North Carolina's county-wide school systems mean that suburban schools are terribly short changed (half the money of inner city schools), and I don't see many professionals falling all over themselves to send their kids to Charlotte's inner city schools.
Besides, would you seriously consider relocating your luxury brand's headquarters to a city that just fired the National Superintendent of the Year all because its staff attorney is too big for his britches?

Unknown said...

Cornelia, Bingo we have a winner. Do you think the Germans don't take education serious? The appearence Charlotte has on the national level is closing in on Birmingham- horrible school system, white flight to the suburbs, crooked city-county govenrment, incarcerated mayor's(Birmingham's mayor also got re-elected after doing his time, so expect the same here), and list goes on.
Well, at least the CMS lawyers are getting a 20% raise..

Gipper1965 said...

North Carolina has also lost federal, regional, headquarters to Atlanta, GA -- most recently, the US Census Bureau. Nice to see our US Senators fighting for NC in DC.

Shamash said...

Yep.

Birmingham, here we come...

Pretty soon we'll have enough has-been cities around these parts to form a string section of "second fiddles" to Atlanta.

Banjo section is in SC, of course.

Cornelia said...

Some may hear bango's strumming in the state to the south, but there are also the sounds of Boeing jets humming and BMW's purring. Here we don't even hear the spinning wheels anymore. Such leadership we've had for the past 25 years! And DO NOT BLAME MCCRORY!,

Cornelia said...

Unknown at 5:13--
And the bishop will deliver his flock...to the polls. By the bus loads.

george said...

Cornelia IS LYING.
Suburban schools in Wake county DO NOT get "half the money" of inner-city schools. Good grief.
To the extent that innner-city schools get even a LITTLE more money, that IS NOT "short-changing" suburban schools. Suburban students are already advantaged in education through their resources from the home, the most important of which is a culture that says that school and academics actually matter, and that maybe you should be quiet and follow directions while you are in school. The ability of suburban parents to contribute to things like field trips over breaks certainly doesn't hurt either. If it weren't for people like Cornelia, there would be NO bad or under-funded schools in the county because all the schools would have SIMILAR mixes of the "disadvantaged" pupils that draw the Title I funding. The only reason they don't ALREADY is BECAUSE OF bigoted voters like Cornelia.

Mike Lee said...

History has shown, North Carolina only gets Atlanta or DC's breadcrumbs and leftovers. DC is a global city, Atlanta has an edge over Charlotte as being more global and diverse. If Charlotte wants to compete on an international level, we need to make major improvements to the locality, like better higher education options, more diverse offerings, more retail catered towards city people, for a more vibrant and diverse atmosphere. It's too generic in Charlotte. There is only one Korean restaurant in Charlotte, you have to be kidding me! Asians love Hot Pot, Shabu Shabu and Korean restaurants. . Atlanta and DC have hundreds!! First step, improve the airport offerings. Currently there are no direct flights to Asia, which is sad. I would love to have a direct flights to China, South Korea, or Japan. Make Charlotte a place where Asians want to go. If I was Asian, would I come to Charlotte? Think about that... Why would I go to a place like North Carolina, except for maybe studying at university here. The Asian economy is the biggest in the world and will continue to expand operations. So why would rich Asian people want to invest and do business in a place that's so out of the way to get to? I can see why a place like California is more appealing for basing operations for people from Asia, it's more welcoming there and people there are more open to people from Asia. Asians hold influential money in the future, trust me. We need for it to trickle down here in North Carolina. Also, making Wilmington a bigger port for NC will help the state look more attractive. There is value to seaside cities and ports, like Charleston does for SC. These are all true things that I hear from Asians who visit North Carolina.

James Edgar said...

Well, since the comments have focused on education, I'll go there also.

I am sick to death of talking heads pontificating that if education is poor, giving it more money is the ONE and ONLY way to fix it. How about more scrutiny to what is being done with the money? Funding is multiple times what it was when I was a kid 30 years ago. I can find Iraq on a map. 80% of current high school seniors cannot. We are constantly spending more money on education and the graduates get dumber every year. Isn't that worth investigating?

On to another aspect of NC losing the job battle: How about the NASCAR Hall of Fame? You think these companies don't notice how every prediction of how well the HOF would do has proven to be wildly, stupidly unrealistic? I'm sure the Mercedes leaders talked about how NC was probably being unrealisticly optimistic about the impact of them coming here.

dmackey98 said...

At least NC is winning the race to the bottom. Even better we get all the free coal ash we can drink.

Unknown said...

Dmac, do you know how Southern Companies/Georgia Power generates electricity? Maybe coal, like Duke?
And where does that ash go? Into the groundwater in Georgia.
Do you live off the grid? If not, then you are part of the problem.
Anytime you point a finger at someone, you have 3 pointing back at ya.

Shamash said...

Mike Lee,

"So why would rich Asian people want to invest and do business in a place that's so out of the way to get to?"

I'm assuming that you mean Asian people who are still in Asia (and not those who are already here).

Aside from "higher" education opportunities, they probably aren't very interested in such a "rural" area.

To most of them, even glorious "uptown" Charlotte looks like a small town.

We are too far from any real action to attract most of them.

And the lack of direct flights to anywhere in Asia doesn't help.

The west coast (and western Canada) is just so much more attractive.

About the only thing we can do is offer Asians visas for buying real estate or otherwise "investing" in the area.

Even then, they can probably get as much bang for their buck just about anywhere else they look.

So there's really not much the area can offer that's truly special.

And, yes, the Asian food options here are lacking compared to many larger cities (and even a few smaller or similar sized ones).

Jennifer Smith said...

The particular appearence Charlotte now has on this nationwide levels can be shutting in upon Birmingham- unpleasant classes program, white airfare for the and surrounding suburbs, twisted city-county govenrment, incarcerated mayor's, in addition to number continues. North Carolina jobs

Carl Leatherman Jr said...

Wake county is not part of the Charlotte metro. It's Raleigh and if course the burbs get $ there because that's where the state reps live.

The inner city (if you can call it that in Charlotte) schools do get greater funding per pupil. When 3/4 of the city lie in crime ridden neighborhoods, what do you expect? Of course people will flee to the burbs, because no one who has the option wants to raise a child in an unsafe environment. And since this city is hell bent on putting all business in uptown and Ballantine, it's damn near impossible to ensure the work force can consistently get to work in a timely fashion.

If Charlotte leaders were smart, they'd be working with suburban mayors and county administrators to grow the entire region, not just build up the "entertainment" district in uptown.

Carl Leatherman Jr said...

Huh? White airfare? What are you talking about?