Dude, N.C. gets computer company

WINSTON-SALEM, Oct. 6 - With the rhythmic thumps of the Winston-Salem State University drum line in the background, the city hosted Michael Dell, founder of Dell Inc., for the grand opening of the company's third and largest domestic manufacturing plant.

"Dell is the only leading computer company in the United States that actually makes computers in the United States," Dell said at the opening.

Bringing the plant to the state was not a quick process, so both company representatives and state leaders were ecstatic about the grand opening.

"This is my fifth year at the governor's office and I feel like I've spent all five of them working on Dell," Gov. Mike Easley said.

Many of the community leaders who were influential in locating the plant in the state, including Easley, Winston-Salem Mayor Allen Joines, U.S. Rep. Virginia Foxx, R-N.C., and Winston-Salem Business Inc. President Bob Leak were in attendance.

"Many, many people really played a significant role in bringing us here to this historic date," said Ro Parra, Dell's Americas senior vice president.

Dell already has upheld its socially conscious reputation by offering one of the first computers from the plant to a children's museum in Forsyth County and donating $50,000 to a government program committed to relaying information about business skills to schools statewide.

But benefits from the move are not entirely one-sided.

Officials boasted that the area is equipped with a strong workforce and a location close to many of Dell's customers and is tied for the lowest business tax rate in the country.

"We're a lot closer to about 60 percent of our customers (here) than we are in Nashville and Austin," Parra said of Dell's other two manufacturing locations in the United States.

When Easley took the stage, he joked, "If I had known that this would have put you within 60 percent of your customers, we wouldn't have negotiated so hard."

The state enticed Dell with a $242 million incentive package, to which Forsyth County and Winston-Salem added a combined $37 million.

Dell already has hired 350 employees for the manufacturing plant and promises to raise that number to 1,500 during the next five years.

"I'm very confident we have an outstanding team of North Carolinians who will raise the productivity, quality and safety bars to new levels," Parra said.

The plant also has drawn four suppliers to the area: APL Logistics, EGL Inc., Austin Foam Plastics Inc. and World Wide Technology Inc.

The idea is that additional suppliers will yield additional jobs.

Easley said that he expects the total increase in jobs to be about 6,500 and that the state will see an increase in gross product of $24.5 billion during the next 20 years.

Advocates of the incentive deal, many of whom were in attendance, hail the opening as a boon to a struggling economy in need of stimulation.

But dissenters, such as Ralph Byrns, professor of economics at UNC-Chapel Hill, contend that the incentive package was bad public policy.

"The tax breaks far exceed any reasonable approximation of benefit to North Carolinians," he said.

The tax cuts Dell will receive will be offset by higher taxes on other businesses and consumers, he said.

"Most of the major gains in employment over the past 30 years have been created by small start-up businesses rather than large corporations given to bureaucracy."

The rate of economic growth that the new plant spurs ultimately will determine whether the winning bid will be considered a victory for North Carolina.

 

Contact the State & National Editor at stntdesk@unc.edu.