Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, September 8, 1993 TAG: 9309080167
SECTION: BUSINESS PAGE: B-7 EDITION: STATE
SOURCE: Associated Press
DATELINE: REIDSVILLE, N.C. LENGTH: Medium
Hunt and his top economic advisers immediately began working to land the top industrial prize of 1993. Some 20 state workers were recruited for the campaign.
The governor lobbied the General Assembly to appropriate $35 million for an automotive technology center to be built at the Mercedes site if the state landed the plant. He also persuaded lawmakers to approve a package of tax incentives and credits for Mercedes.
"We needed to make changes to be more competitive. We weren't competitive," Hunt said at a recent groundbreaking for a $37 million plant for Schlegel Corp., which supplies rubber weatherstripping to BMW and Mercedes.
Hunt is banking on his belief that the kind of incentives that persuaded Schlegel to build in North Carolina will be attractive to Mercedes.
Mercedes-Benz hopes to select its U.S. site by early October and begin construction by next spring. The plant is expected to employ 1,500 workers who will produce a new four-wheel-drive sports vehicle.
Right now, there are still several sites under consideration, Mercedes-Benz spokeswoman Linda Paulmeno said recently, but she declined to specify how many or say what states were still on the automaker's list.
Mercedes officials reportedly toured South Carolina in late August. Other states believed to be high on their list are Georgia and Tennessee, although sightings of Mercedes officials have been reported as far away as New Hampshire.
Virginia officials have been pushing a site in Warren County.
"We've made a very aggressive proposal to Mercedes and have been assured that we are still part of the selection process," said April Young, director of the state Department of Economic Development.
Young said Virginia has "offered an aggressive set of incentives," but she declined to be specific.
States are willing to jump through hoops to capture the new high-wage jobs.
Alabama Gov. Jim Folsom signed legislation last month that would give tax breaks to Mercedes-Benz if it built the plant in Tuscaloosa. Other states are offering similar incentive packages with features such as free worker training, tax credits and infrastructure improvements.
Last year, South Carolina used a similar package of incentives - valued at more than $130 million - to attract BMW to build its first U.S. plant in Greer.
But Paulmeno insists financial incentives are not the top priority in the selection process.
"The winner won't necessarily be the one that put up the most money," she said. "We can't stress enough that we are not looking just to go to the community that tries to prove it wants Mercedes-Benz the most."
Hunt doesn't like to link North Carolina's economic incentives exclusively to Mercedes. But observers agree the enticements put the state in a better position to compete.
The governor doesn't want North Carolina to lose out - again. The state is still smarting after losing BMW to South Carolina. Luring BMW took South Carolina officials three years, numerous trips to Europe and promises of free land, tax breaks and employee training.
Hunt says other states are offering more incentives than North Carolina. "The main thing we can offer them is training," he said.
David Andrea, a senior research associate at the University of Michigan's Transportation Research Institute, said the project is of utmost importance to the longevity of Mercedes, which said recently it would eliminate 14,000 more jobs in high-wage German assembly plants with a goal of saving $600 million.
by CNB