Volvo Goes South And North Carolina Lawmakers Say Farewell

May 12, 2015

Credit Dave Crosby / flickr

Lawmakers are weighing in on Volvo's decision to bring at least 2,000 jobs to South Carolina. The car maker announced Monday that it plans to open a production facility outside of Charleston.

It is a $500 million project and South Carolina will contribute $150 million in economic incentives.  North Carolina has been in pursuit of Volvo, though it became clear last week that the company no longer considered the state a finalist.

Policymakers have been divided about when, where and how often economic incentives should be used. Some lawmakers renewed calls for economic incentives as a tool to lure job creation. But others contend economic incentives are a small piece in a larger puzzle.

"It could relate to transportation, it could relate to money, just a whole mix of things that are part of that equation. Until we know more, we really don't know the basis on which Volvo isn't here," said Rep. Chuck McGrady (R-Henderson). He said regardless of the potential incentive package's impact, $150 million is simply too much money for the Volvo plant.

McGrady also added that two trade publications have recently ranked North Carolina among the most business-friendly states in the country. He pointed to Sierra Nevada coming to his district largely due to a very good quality of life. He says that's a selling point for the entire state.
 

'It's not all just about incentives. It's about the environment of the quality of life they work in - education and quality of opportunities.'

The debate over incentives does not fall along party lines. Some Democrats have also spoken out against the tool, saying incentives amount to corporate welfare.

Meanwhile, Democratic House Minority Leader Larry Hall (D-Durham) took a similar argument in a different direction.

"They (Volvo) want a good partner and so North Carolina is clearly failing that particular test. It's not all just about incentives. It's about the environment of the quality of life they work in - education and quality of opportunities," Hall said.

He pointed to other manufacturing facilities - including BMW and Toyota - that have passed on North Carolina in recent years.

Some legislators have cautioned over-stating the importance of economic incentives - contending they're success is unproven and many other pieces go into economic development. Still others maintain they're a necessary evil in the current climate of growing the economy.

While House Representatives work on a budget proposal and consider how to allocate a projected $400 million surplus, expect the debate over incentives to march on.