Scene: JC and Jordan have refilled coffee continuing discussions whether NC views economic development as enticing other companies to relocate rather than to encourage and support local companies. Discussion started Entry #86, “Is North Carolina the Stealin’ State?”
JC: “OK Jordan, we’ve refilled our coffee. You have got to give me some specific examples of why you think North Carolina is stealing jobs.”
Jordan: “Two relatively recent examples – Met Life and Chiquita.”
JC: “Chiquita…you mean the banana guys?”
Jordan: “Ask the city of Cincinnati about Chiquita.”
JC: “Yes, we have no bananas.”
Jordan: “That’s right. Cincinnati was the HQ. Then Charlotte convinced Chiquita to relocate to Charlotte.”
JC: “Did everyone at Chiquita get transferred?”
Jordan: “What do you think? If everyone moved, then why would Chiquita relocate? Don’t know for certain but I’ll bet no more than 25% of the staff moved, and probably a lot less.”
JC: “In the end, who benefitted?”
Jordan: “That’s the real question. Let’s look at losers first.”
JC: “First would be employees who stayed in Cincinnati. Second, taxpayers of Cincinnati since Chiquita moved. Third, Charlotte since Chiquita was probably offered incentives.”
Jordan: “Charlotte did offer incentives in the form of tax breaks.”
JC: “So Chiquita comes to Charlotte and gets an incentive to pay less tax. What do the taxpayers of Charlotte get in return?”
Jordan: “Supposedly new jobs that will pay more taxes than the amount of incentives.”
JC: “How long is the payback?”
Jordan: “City economic planners rarely talk about payback.”
JC: “So we have three groups who get the finger — Chiquita staff that does not move, taxpayers in Cincinnati and taxpayers in Charlotte.”
Jordan: “The winners are the company executives. The company pays for their relocation.”
JC: “That’s not a very good formula for economic growth. More losers than winners. Charlotte steals a company from Cincinnati and the only winners are the executives of the company that moved.”
Jordan: “The story gets worse.”
JC: “How?”
Jordan: “Chiquita is being purchased by either an Irish-based or Brazilian-based company.”
JC: “And the winner will relocate Chiquita HQ to a different Ireland or Brazil.”
Jordan: “That’s the plan.”
JC: “What about some penalty for Chiquita not keeping its agreement with Charlotte.”
Jordan: “Good question. Chiquita declared bankruptcy soon after moving to Charlotte. So who knows if the BK negated any possible recovery of penalties?”
JC: “Is there a success story for companies relocating?”
Jordan: “Met Life relocated some operations in 2014 to a location in South Charlotte.”
JC: “Did Snoopy move too? By the way, where did Met Life relocate operations from?”
Jordan: “New Jersey.”
JC: “Well, what’s home grown in Charlotte? Is there an effective and active effort to create and grow businesses?”
Jordan: “Active, yes. Effective? Despite a lot of time and effort by well-intentioned people, the simple answer is, ‘no.’”
JC: “Doesn’t Charlotte have a bunch of banks?” Surely the banks must support new businesses.”
Jordan: “Funny, you mention banks. The Bank of America is the only major bank with HQ in Charlotte.”
JC: “Wait a minute. BofA started in California and was headquartered in San Francisco. I used to bank there years ago. How did it get to Charlotte?”
Jordan: “A Charlotte-based bank bought controlling interest…”
JC: “…and then the buyer took the name, claiming it was a Charlotte bank? This time a case of name theft. Since being taken over by the Charlotte bank, BofA’s reputation has really suffered.”
Jordan: “You’ve got the pattern.”
JC: “OK, so there’s a pattern of ‘borrowing,’ as it were. But why don’t the banks support new businesses? Look at the number of start-ups in California, Massachusetts, and New York.”
Jordan: “Most of the banking functions in Charlotte are aimed at helping existing businesses, not funding start-ups.”
JC: “Well, that’s consistent with trying to get other companies to relocate…rather than supporting formation and growth of new companies.”
Jordan: “I think that’s a fair assessment.”
JC: “OK old sage, then what has North Carolina invented? Surely there is something.”
Jordan: “Want to hear something funny about North Carolina?”
JC: “I’m ready.”
Jordan: “A number of people in Mecklenburg County, which surrounds Charlotte, wrote a Declaration of Independence in 1775.”
JC: “And, of course, the 1776 Declaration of Independence was based on the one from…what was the name of that place?”
Jordan: “Mecklenburg County.”
JC: “Surely you jest. What evidence supports the claim?”
Jordan: “None?”
JC: “None? Who comes up with these ideas? Some politician?”
Jordan: “Who knows where the ideas come from? But the claim is on the state website about ‘firsts’ in NC. The site also notes NC was first in flight.”
JC: “First in flight of what. The first airplane flight was by the Wright brothers. And they were from Ohio.”
Jordan: “North Carolina’s claim is the first flight was in North Carolina.”
JC: “OK, so Kitty Hawk is in North Carolina. What did North Carolina contribute?”
Jordan: “You’re missing the point.”
JC: “What point? North Carolina happened to be a placed where they stopped. Wright brothers Could have easily tried the flight a little north in Virginia or a little south in South Carolina.”
Jordan: “I agree.”
JC: “Boy, what a pattern. Next North Carolina will claim Abraham Lincoln was born there.”
Jordan: “I’ve seen an article making such a claim.”
JC: “Let’s get North Carolina’s head in the right part of its anatomy. Get out your iPad and let’s try to find something they can claim as their own.”
(I thought about another entry but what else is there to say? Look, NC is OK as a state. But, the state and many residents seem to have an inferiority complex. To see what I mean, visit the state website about ‘firsts’. Surely there are more innovations than what’s listed. I mean really.)
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