RALEIGH, NC (WNCN) – As part of the largest economic development announcement in North Carolina history, Vietnamese electric vehicle manufacturer VinFast could get up to $1.2 billion in incentives to build their Chatham County facility.
The company says it will invest just over $4 billion and create 7,500 jobs that pay an average minimum salary of about $51,000.
North Carolina Department of Commerce documents show VinFast reviewed 29 sites in 12 states before selecting North Carolina and the Triangle Innovation Point megasite near US 1 in Chatham County.
The state is offering up to $854 million, including infrastructure improvements and tax breaks, while Chatham County has pledged up to $400 million.
“Most of this is for necessary road improvements for water and sewage and for site preparation,” Gov. Roy Cooper (D) said after the announcement. “That ensures that we can come to a table to attract a company like this.”
The governor worked with Republican and Democratic leaders in the General Assembly as North Carolina attempted to win VinFast for the state.
The company’s global CEO, Le Thi Thu Thuy, said the announcement came after “three weeks” of negotiations.
State documents show that VinFast must be eligible for the full tax break for the next 32 years. VinFast must fulfill at least 80 percent of the jobs it is committed to creating and at least 90 percent of the salaries it claims it will pay.
North Carolina State University economist Mike Walden developed the formula the state uses to calculate these stimulus packages over 20 years ago.
“Incentives are really a tax reduction when you look at the cost of doing so compared to the benefits of bringing in more money, more jobs and more labor costs,” he said. “Bringing more activity, which of course will generate more activity for the state. The state is therefore very consciously examining these support packages and making sure that they pay off for the state in the long term.”
Jon Sanders, an economist at the conservative John Locke Foundation, noted the increasing size of these stimulus packages as states compete for major projects.
Last April, the state approved a nearly $1 billion package for Apple to build its new Wake County campus.
“They just seem to get bigger. But these things take decades and decades and we’re just going to compile them on top of each other, where will we be in four decades?” he asked.
He said while states across the country are using incentives as part of their strategy, companies tend to prioritize other factors.
“Our education, our low taxes and regulations, our access to major thoroughfares, those are the main drivers,” Sanders said. “For the politicians, they want to give the impression that these things would never have come here without these incentives. But most likely, and in most cases, if these projects are built in North Carolina, they will be built in North Carolina because it makes economic sense.”
Trade spokesman David Rhoades told CBS17 that companies are required to submit a performance report detailing whether they have met their commitments in terms of job creation and money invested, and are subject to performance reviews by his department and the Treasury Department .”
“Occasionally, a company will come back to us and report that they have missed their targets or perhaps have been unable or unwilling to provide us with the required compliance information. In these cases, the company will usually ask us to cancel the grant. Recent examples include a 2019 grant to Microsoft (which never received a government payment) and a 2018 grant to Sonic Automotive (which also never received a government payment from JDIG). Both companies are operational and have created jobs in North Carolina,” Rhoades wrote in an email.
https://www.cbs17.com/news/how-does-nc-ensure-incentives-packages-for-companies-are-worth-it/ How does NC make sure corporate incentive packages pay off?