RALEIGH, N.C. (WNCN) – As part of the largest economic development announcement in North Carolina history, Vietnamese electric vehicle maker VinFast could receive as much as $1.2 billion in incentives to build their plant in Chatham County.
The company says it will invest just over $4 billion and create 7,500 jobs that pay an average minimum salary of about $51,000.
Documents from the North Carolina Department of Commerce show VinFast considered 29 sites in 12 states before selecting North Carolina and the Triangle Innovation Point megasite near U.S. 1 in Chatham County.
The state is offering up to $854 million, including infrastructure improvements and tax breaks, while Chatham County has pledged up to $400 million.
“Most of it is for needed road improvements for water and sewer and for site preparation,” said Gov. Roy Cooper (D) following the announcement. “This makes sure that we can get to the table to be able to attract a company like this.”
The governor worked with Republican and Democratic leaders in the General Assembly as North Carolina tried to attract VinFast to the state.
The company’s global CEO Le Thi Thu Thuy said the announcement followed “three weeks” of negotiations.
The documents from the state show to be eligible for the full tax breaks over the next 32 years, VinFast must meet an 80 percent minimum of the jobs it has committed to create and a 90 percent minimum on the salaries it has said it will pay.
North Carolina State University economist Mike Walden developed the formula the state uses to calculate these incentives packages over 20 years ago.
“Incentives are really a lowering of the tax burden where they look at the cost of that versus the benefits of bringing in more money, more jobs, more payroll,” he said. “Bringing more activity, which of course, is going to generate more activity for the state. So, the state is very deliberate about examining these incentives packages and making sure they do pay off for the state in the long run.”
Jon Sanders, an economist at the conservative John Locke Foundation, noted the increasing size of these incentives packages as states compete to attract major projects.
Last April, the state approved a package of nearly $1 billion for Apple to build its new campus in Wake County.
“They just seem to be getting bigger. But, these things are lasting for decades and decades and we’re just going to compile them one on top of the other, where are we going to be four decades from now?” he asked.
He said while states across the country are using incentives as part of their strategy, companies tend to prioritize other factors.
“Our education, our low taxes and regulation, our access to major highways, these are the major drivers,” Sanders said. “For the politicians, they want to give the impression that but for these incentives these things never would have come here. But, most likely and in most cases, these projects are going to be built in North Carolina when they’re going to be built in North Carolina because it makes good business sense.”
Commerce spokesperson David Rhoades told CBS17 companies are required to submit a performance report that outlines whether they’ve fulfilled their commitments on jobs created and money invested are subject to performance reviews by his department and the Department of Revenue.”
“Occasionally, there are cases where a company comes back to us and reports they have fallen short of their targets, or perhaps have been unable or unwilling to submit the required compliance information to us. In those cases, the company will most often ask us to terminate their grant. Recent examples are a 2019 grant issued to Microsoft (of which no state payments were ever made) and a 2018 grant to Sonic Automotive (which also never received a state payment from the JDIG). Both companies are in operation and created jobs in North Carolina,” Rhoades writes in an email.