Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, May 3, 1994 TAG: 9405030150
SECTION: VIRGINIA PAGE: A1 EDITION: METRO
SOURCE: STEPHEN FOSTER STAFF WRITER Note: below
DATELINE: DUBLIN LENGTH: Medium
At a news conference Monday called by the company, Pulaski County officials, state politicians and economic development figures praised the yearlong effort that persuaded Volvo-GM to expand its plant.
But there must have been quite a few "whews" behind the scenes of the expansion announcement, made Friday in Richmond.
Because in reality, it wasn't just a question of whether the truck manufacturer would expand its 1,400-employee plant with $200 million worth of new cab assembly and paint facilities. It was a question of whether the plant would stay, period.
"South Carolina got BMW, and Alabama got Mercedes, but Pulaski County kept Volvo-GM in the New River Valley," said Jerry White, chairman of the county's Board of Supervisors. What that means is up to 200 new jobs at the plant by next year, more than 580 spinoff jobs and, according to a Virginia Tech economist's study, as many as 6,100 added jobs statewide.
In January, stories began circulating in the North Carolina press that the company was looking at expanding, or moving the existing facility, outside the state. At the time, the company downplayed the possibility. But the pressure certainly was on, and for good reason.
"We started this as an open project," said Frank Adams, executive vice president of manufacturing for Volvo-GM. "There was a possibility for the entire facility to be relocated."
In enticing the company to stay, the county agreed to give Volvo-GM $3 million - or half the expected 10-year increase in real estate, machinery and tools taxes the expansion would bring.
When all taxes are counted, the county expects to bring in an extra $1.3 million a year from Volvo-GM, said Assistant County Administrator Peter Huber.
Some other local incentives were offered, including the county's agreement to spend about $150,000 in road improvements. The Board of Supervisors approved the package on Monday night.
Part of the county's offer will come via the New River Valley Economic Development Alliance, which will lend all of the $325,000 it received from the General Assembly earlier this year to the county's Industrial Development Authority.
"We wanted to make sure that they didn't move," said Gary Weddle, president of the alliance. "For them to pull up stakes ... would have been disastrous."
In addition, the state will give Volvo-GM $1 million a year for the next five years from its "Governor's Opportunity Fund." The company also will be able to take advantage of the newly created major business facilities tax credit.
According to Volvo-GM, though, the money was not everything.
"The incentive package ... was a fractional amount of what was offered by other locations," Adams said. Volvo-GM explored its options in North and South Carolina, which lost the Mercedes bidding war to Alabama last year, and Ohio, where the company already operates cab-making, stamping and truck production facilities.
Adams praised the work ethic of New River Valley workers and cited a six-year contract signed last month by the union, United Auto Workers Local 2069.
The cost of relocating also was a factor, he said, and the company will save several million dollars in transport costs over what it now pays to ship cabs from the Orrville, Ohio, facility.
In the first phase of the plant's expansion, production will be increased from 60 to 72 trucks a day by 1995, resulting in 175 to 200 workers being hired. By 1997, the cab-making and paint facilities should be on-line. More workers could be hired then.
The biggest impact on employment, however, may come in the number of spinoff jobs.
Thomas Johnson, a Virginia Tech economist, prepared a study recently to help the county gauge the expansion's impact. His study found that 6,100 retail, wholesale and service jobs would be created statewide.
Johnson, who said he was taken aback by the study's findings, attributed the figure to the vast number of supply parts Volvo-GM buys from other companies - glass, hubcaps, tires, engine parts and so on.
"I'm glad they decided to stick with us," said state Sen. Madison Marye, D-Shawsville, who attended the news conference with lSen. Malfourd "Bo" Trumbo, R-Fincastle, and Del. Tommy Baker, R-Radford. "Rather than putting dollars into an unknown quantity ... I am so glad we have been able to keep [Volvo-GM] in Virginia."
by CNB