RALEIGH – Whether North Carolina becomes home to a huge battery factory today or in the near future, the state is a candidate for future electric vehicle manufacturing. That’s what a well-known industrial site recruiter says.
The state’s economic investment committee is due to meet today as discussions circulate on the possible selection of the triad area for a Toyota plant. Such a speech has already circulated. Things could be different now with recent fundraising moves in the North Carolina state budget – potential funds for the Triad’s “megasite” to lower taxes for individuals and corporations.
After reports that Toyota is once again considering a 1,825-acre “mega-site” in Randolph County as a viable location for a new plant, this time an electric vehicle battery plant that could involve some 1.29 billion dollars in investment and creating 1,750 jobs in the region, WRAL TechWire spoke with site selection expert John Boyd, Jr., director of The Boyd Company. The company specializes in assisting businesses with relocation, which is what attracts so many businesses to consider North Carolina for business expansion or relocation.
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The slightly edited transcript follows.
WRAL TechWire (TW): How could NC get this specific project? How is the state different now than in the past, when it did NOT land a Toyota factory, although it was factored in for this (2018), and other failures in the securing automotive installations in the recent past?
Boyd: The electric vehicle industry is a particularly timely target for North Carolina – manufacturing electric vehicles requires a very small fraction of the parts required for fuel-powered automobiles. The lack of a critical mass of automotive industry suppliers in the region is not as crucial a site selection factor as in previous years, when courting the state for projects like Toyota, BMW, Volvo and Mercedes. In fact, Toyota may view North Carolina as a fertile recruiting ground, becoming a premier employer of choice in the emerging and growing electric vehicle industry.
Another idea here – it was widely reported that the Randolph mega site was given a close review by Toyota in 2018. Give the local development team on the ground credit for the work they did to create these relationships – this work in 2018 could very well bear fruit in 2021 with this new project. We always say that economic development is cumulative and it’s about building relationships. The state maintains close ties to Japan through North Carolina’s huge pharmaceutical and biotech sector. I suspect these links are being exploited here as well.
Duke Energy is also a major asset for North Carolina, particularly in the electric vehicle industry. Duke’s proactive stance on green energy and working with policymakers, the real estate and business community can also help pave the way for energy-centric deals like Toyota.
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TW: The North Carolina legislature passed the state budget last week, and Governor Cooper signed it into law. This budget includes funds apparently allocated specifically to this project. Could or could other states offer a similar level of economic incentives and what is North Carolina’s strategy?
JB: Incentives, although controversial today among universities, think tanks, and public advocacy groups, are an important part of the site selection process. Incentives have become the norm rather than the exception and our corporate clients are all looking for ways to help cushion the huge capital investment costs associated with large projects like the one proposed by Toyota.
Neighbors to North Carolina all offer incentives, including hiring tax credits, property and sales tax rebates, and grants for infrastructure and skills training. Beyond helping land this potential deal with Toyota, it sends a message to the global electric vehicle industry that North Carolina is ready to be ready and able to be an active partner in this growing industry. .
More companies, more people = growing demand for talent. Can North Carolina meet the need?
TW: How important are tax and other economic incentives for businesses – and businesses like Toyota – in choosing a location? What other factors are important? What could be important for Toyota in this specific project?
JB: While incentives are important and often act as a ‘tiebreaker’ for finalist locations, it is ultimately North Carolina’s premier job market and skill set ( the state is home to major research institutes and academic centers of excellence, as well as community colleges and technical schools, the state’s low cost of doing business and the excellent synergy between the academic sector, the business community and lawmakers who have always been a big part of the state’s winning formula for economic development.
“Substantial mismatch” in jobs, talents + urban areas compared to rural areas = big problems for the NC
TW: Would changing the corporate tax rate budget help get a deal – for Toyota or other companies – or are corporate tax rates essentially “table stakes” in this? weather ?
Businesses looking for sites tend to “want it all,” they want every tax break they can get and every penny of incentives.
Changing the corporate tax rate would not only help Toyota’s bottom line, but it would send a message to the global business community that in North Carolina, job creators are valued and have a seat in the world. table in terms of policy emanating from Raleigh. This is NOT the tenor of less business-friendly states like CA, NY, and IL today, where businesses and employers are treated as antagonists and ATMs.
Timing is of the essence in economic development and the timing of Governor Cooper’s 2022 state budget signing last week, which reduced the state’s personal income tax rate and phased out the rate. corporate tax, worth mentioning here. Texas, which often competes with North Carolina on major projects and where Toyota has its North American headquarters in Dallas and major production operations in San Antonio, has no corporate or corporate taxes. personal income.
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TW: 2020 and 2021 were record or near record years for economic development activity in North Carolina.
JB: It is a historic era of mobility for people and businesses.
North Carolina’s attractive cost of doing business by national standards, cost-of-living advantages, globally recognized group of universities, AND diverse industry sectors make it an attractive state for immigration. North Carolina is one of the fastest growing US states
North Carolina has grown enough in the past decade to win a 14th Congressional seat and 16th Electoral College member, an achievement that has not gone unnoticed with companies in highly regulated industries like energy and with billions of federal dollars on the table in new federal green energy initiatives. All of this is taking place in high-tax, high-cost states like California, New York, and Illinois, which are losing people and representation in Washington.
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TW: And in life sciences in particular, why is CN attractive to businesses at the moment?
A highly skilled workforce, low commercial costs, attractive sites like RTP make NC a world power in life sciences. Additionally, site planners are now talking about the expanded I-40 corridor connecting the Triangle region to the Triad as other prominent pharmaceutical and biotechnology corridors in the United States, such as the Highway 1 corridor in central Canada. NJ, the I28 road corridor. in Boston and the I-270 corridor in Montgomery County, Maryland. In addition, North Carolina’s life sciences advocacy group, the North Carolina Biotechnology Center, is another resource that sets the state apart as a prime location for the pharmaceutical and biotech industry.
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TW: What other site selection trends are you tracking now and through to 2022? What are you expecting – in NC – in 2022?
KG: The relocation of manufacturing spurred by supply chain disruptions, particularly in the pharmaceutical industry, is a trend North Carolina will continue to capitalize on in 2022 and beyond.
Today, housing has become a major driving force behind site selection. We are bullish on North Carolina, particularly in the new mixed-use developments underway in the Raleigh / Durham market.
Also look for new investments in the aerospace industry, a sector that is coming back strong from the pandemic and in which our firm is active with clients such as Boeing, Pratt & Whitney and Safran. Connecticut-based Pratt & Whitney, for example, is currently building a 1.2 million square foot plant in southern Buncombe County that will manufacture turbine airfoils for jet engines. The $ 650 million transformative project will attract new aerospace suppliers to western North Carolina over the next several years.
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