The Charlotte Observer

January 18, 1996

Recruiting Industry
N.C. Department of Commerce Official Responds to Observer

Bob Goodale

Copyright © 1996, The Charlotte Observer

Since its creation in 1993, the Industrial Recruitment Competitive Fund has brought to North Carolina commitments of nearly 9,000 new jobs and more than $1 billion in investments, many in economically distressed counties and communities. The state Commerce Department has used this program as a tool to compete with other states for private sector investment and job creation.

Unfortunately, The Charlotte Observer's Jan. 12 front page story by Taylor Batten is riddled with substantive errors. It implies the state has given $70 million in incentives to companies that have failed to create the jobs they promised. Nothing could be further from the truth.

First, the Department of Commerce has given $10.6 million - not $70 million - in incentives to companies to encourage them to expand or create new jobs. North Carolina has always offered other incentives as well, including worker training and road improvements.

Second, it is false to imply that the companies in question have failed to create the jobs when each company has a minimum three-year deadline to fulfill its jobs commitment. The earliest deadline is Dec. 21, 1996.

However the Observer is accurate in reporting that the state Commerce Department has not put in place a system to monitor all the companies that get Competitive Fund grants. We're behind the curve on that and we're putting a system in place to correct that problem.

Unfortunately, there are other errors in the story.

The Observer erred when it implied Quaker Oats had received a Competitive Fund grant, only to close another of its plants and put 70 people out of work. While the company did consolidate operations at the Asheville site, all 70 workers at the closed facility moved to the new location. No jobs were lost and the company has already exceeded its commitment to create 98 new jobs, for a total workforce of more than 170.

The Observer erred when it said Commerce didn't ask for Employment Security Commission numbers. We did ask ESC for numbers, and have gotten half of them so far. But as the Observer found, a state statute providing confidentiality to companies prohibited us from releasing the numbers.

Finally, The Observer erred when it said that Commerce responded to legislative pressure to create new guidelines. In 1993 when the legislature created the fund, Gov. Jim Hunt created the Business Incentives Task Force to develop guidelines to increase the fund's accountability. Those guidelines are in place and companies do not receive competitive fund grant funds until the jobs they have committed are created.

Indeed, Commerce has homework to do. If companies don't create the jobs they commit to creating, Commerce will make them repay the grants. But on the whole, The Observer - my hometown newspaper - should be ashamed of such sloppy reporting, and should do its homework as well.

Bob Goodale is North Carolina deputy secretary of commerce. The subject is discussed in an editorial above.

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Copyright © 1996, The Charlotte Observer.

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