Carolina legislature, governor OK incentives to benefit Goodyear, BFS

By Kathy McCarron, Tire Business staff

Raleigh, North Carolina (Sept. 12, 2007) - It took only two days for the North Carolina General Assembly and the governor to negotiate and approve a compromise bill 11 Sept. that provides incentives for both Goodyear and Bridgestone/Firestone to upgrade their tyre plants in the state.

The General Assembly, which had adjourned in August, reconvened on 10 Sept. for a special session to consider a vote to override Governor. Mike Easley's veto of a $40 million incentives bill for which Goodyear was the only tyre maker eligible. The bill provided grants to companies with at least 2000 full-time employees that planned to invest $200 million in capital improvements over a five-year period.

Goodyear's Fayetteville, North Carolina, passenger/light truck tyre plant employs 2750. BFS, which has 1875 employees at its Wilson, North Carolina, passenger/light truck tyre plant, said the employment limits and other issues in the vetoed legislation negated BFS' eligibility.Gov. Easley said he vetoed the bill because it set a “dangerous precedent” by providing funds to a company, particularly Goodyear, without a guarantee that it wouldn't layoff up to 25 percent of its work force.

Under the new amended plan approved by the General Assembly and signed by the governor on 11 Sept., an eligible company must employ, and agree to maintain, at least 2000 for the full term of the grant agreement. The eligible company must also invest at least $200 million in capital improvements within a six-year period.

BFS believes it is eligible for the grant because of several amendments, including the provision that it can count full-time contractors, increasing its plant employment figure to about 2200, according to a company spokesman.

The state will provide a total of $60 million in grants over 10 years divided among no more than five companies. Based on the criteria and current data, such as tax bases, House Speaker Joe Hackney's office estimated Goodyear could be eligible for about $24 million and BFS for about $22 million in grants under the programme.

Under its contract with the United Steelworkers union, Goodyear committed to invest $550 million in capital improvements at its US unionised plants. A company spokesman said Goodyear plans to upgrade equipment at the Fayetteville plant to improve capacity for higher value tyres.

Likewise, BFS said it has been upgrading its tyre building equipment, including adding curing presses for higher rim diameter tyres, at its Wilson plant since 2005 and its investment should meet the required $200 million under the incentives programme.

From Tire Business (A Crain publication)

Website of North Carolina General Assembly listing relevant bills passed in the extra session