“If we can’t be competitive, we will move our plant.”
— Volvo Construction Equipment Plant Manager Dave Million
At the Buncombe County Board of Commissioners’ July 20 meeting, the commissioners took action on two matters with significant economic implications for local workers and employers alike. And while there was general accord on one, the other pushed commissioners’ political differences into the spotlight.
Public hearings on two economic-development incentive packages presented by Assistant County Manager Jon Creighton drew only three comments from the public. The first, a $5,310 grant to fabricator Dave Steel, was designed to help the third-generation local business modernize its operation.
“They’re making steel harder,” Vice President of Finance William Lewin explained. “As steel got harder, we couldn’t punch holes the same size as before. … Now we have added a new piece of equipment, and we can punch larger holes again.” As a result, said Lewin, the company’s work force, which had fallen to 65 employees in recent years, should climb to 91 or more by year’s end.
County resident Alan Ditmore challenged the grant. “I categorically oppose economic incentives,” he proclaimed. “If you want to be fair and increase employment, you should use tax money to bring in a single-payer health plan. That would increase employment across the board.”
At the other end of the spectrum was a $1.2 million incentives deal concerning Jacob Holm Industries’ new $40 million manufacturing plant, announced by Gov. Mike Easley in Asheville on July 13 (see “From Switzerland to Sand Hill”, July 21 Xpress). The company plans to hire 70 workers initially and perhaps another 30 or so later on.
Company spokesman Michael Norboge briefly described the project, and County Attorney Joe Connolly explained that the deal required the board to approve five annual payments of about $180,000 to the seller of the property where the plant will be built (near the intersection of Sand Hill and Sardis roads in Enka), and to pay Jacob Holm Industries $300,000 once the plant is completed (sometime next year).
Eagle-eyed critic Jerry Rice commented, “I’m happy to see this big thing coming.” But he went on to ask: “What is the average pay for the 70 workers? Are they going to be able to pay property taxes here?”
Connolly said starting pay at the plant would be $14.48 per hour; at the July 13 press conference, however, Norboge reported wages in the $10 to $12 range.
And Chairman Nathan Ramsey, apparently misunderstanding Rice’s question, answered, “The plant will pay $210,000 per year in property taxes.”
Swannanoa farmer Eric Gorny asked, “At what point does the county break even?”
Commissioner David Young replied, “Five years.”
But what wasn’t apparent from the discussion was how the governor could present the plant siting as a fait accompli on July 13 when the county’s contribution (which accounted for the bulk of the incentives package) didn’t even come up for a public hearing until a week later. If the board had nixed the county’s $1.2 million payment, the deal would have collapsed.
Creighton presented the proposal to the board in a closed session some time ago. This is not unusual, Creighton told Xpress. “We go into a closed session and say ‘This is what we’ve got’ in order to see if the numbers work for the board members before we go into negotiation.” As for Easley’s early announcement, Creighton said, “That was the governor’s decision.”
Both incentives packages passed unanimously.
The former Beacon Manufacturing Company site, ravaged by fire on Sept. 3, 2003, has now been fully restored, Senior Vice President David Frances of Carolina First Bank told the board.
Through a merger with Mountain Bank last October, Carolina First Bank became the owner of the Beacon property. The $8 million cleanup involved removing 57,000 tons of debris (much of it toxic or presumed toxic) and more than 600 chemical containers, as well as dealing with a fuel-oil spill that briefly impacted the Swannanoa River. The property is slated to be sold to a new owner in the next several months. “Our final major accomplishment,” concluded Frances, “is that we donated land to the Swannanoa Fire Department to complete their expansion.”
The commissioners praised Carolina First’s efforts, and Chairman Ramsey noted that the bank had also arranged to relocate a war memorial installed by Beacon to honor its many employees who served in World War II. The memorial will be rebuilt at the fire station.
Briefcases and crutches
Clearly, however, the hot-button issue of the afternoon was a document titled the “Western Carolina Industries Legislative Agenda,” originally presented by the Employers’ Coalition of North Carolina last March. The ECNC is lobbying counties statewide to officially endorse the document, an advisory to the WNC legislative delegation. In a later interview with Xpress, Commissioner Gantt called the advisory “very unusual” in his eight years on the board.
More than a dozen county residents were on hand to address the issue, and it soon became clear that the commissioners themselves were no less divided on the matter than they were when it was tabled four months ago.
Commissioner Patsy Keever opened the can of worms by asking “Could we have a complete rundown on what it is we are being asked to vote on?”
The agenda, said Ramsey, includes five components: international trade policy, health-care costs, the role of state government in a global economy, business taxation and workers’ compensation.
The latter, said Ramsey, “is the only thing that has brought up issues at the local level.”
The agenda alleges “serious problems in our workers’ compensation system,” including growth of average cost per claim, growth of indemnity benefits (lost wages), and increases in both permanent and temporary disability claims. The document also reports that total benefits per injured worker are higher here than in 19 other states. But documents from the North Carolina insurance commissioner’s office directly contradict all but the final assertion. And agenda opponents maintain that, in fact, the actual benefits paid to workers in North Carolina are lower than in all but eight other states.
Keever: “Does this [group] represent smaller employers as well as large ones?
Ramsey: “It represents larger ones, but the problems affect small and large alike.”
Gantt: “I would like to exclude the tort reform and the workers’ compensation sections and would make a motion to that effect.”
Among the agenda opponents who spoke during the public hearing that followed was attorney Henry Teich, a board-certified specialist in workers’ compensation law who took aim at the entire rationale for the resolution. “The reason jobs are leaving North Carolina is not because of workers’ comp,” he said. “Before NAFTA, jobs were not leaving North Carolina. We are not losing jobs to other states because of workers’ comp.”
Teich went on to point out that the clients he represents will bear the brunt of cuts in workers’ compensation. Gesturing toward clients present in the chamber, Teich declared, “These are real people with real families who will be hurt by this cut.”
Laura Gordon, president of the WNC Central Labor Council, said: “Our executive board and all of our affiliated unions oppose the proposed initiative to weaken the North Carolina workers’ compensation system. We feel it is a system that is working, and we don’t understand why some commissioners feel a need to take a stand on a state issue.”
Attorney Reed Williams, noting that he has “both defended and prosecuted these cases,” said his biggest concern was that “much of the information contained in here is wrong. Costs are decreasing. … This is not factual information.”
Four of the injured workers in the audience, some on canes or crutches, spoke in opposition to the agenda. Randy Marrs, Jennifer Rosenfelt, Dennis Goode and Caroline Mills each described the impact of work-place injuries on their lives and families. Mills observed, “You work all your life and then get pushed aside.” Jerry Rice noted that his own family had been faced with a job-related injury in the past year and that he’d learned there are a lot more cases than there are attorneys who can handle them, so small accidents are going unreported and uncompensated.
Among the agenda’s supporters was Bill Mance, vice president for human resources at Mission St. Joseph’s, who urged passage of the entire package. “Rates are not the issue,” he asserted. “Mission is self-insured. The rise in cost is not proportional to health-care cost; it involves the dragging on of cases without limit. No company,” he continued, “wants its employees who suffer injuries to not be compensated, but we do expect it to end at some point.”
Cindy Brooks, vice president for human resources at Ingles (which is also self-insured), agreed. “Workers’ compensation reform is very important to us,” she said. “We are very pleased that you are looking at this. … We care about our employees, and we see this as something that will help them.”
Companies with sufficient financial assets can opt out of the government’s compensation system and provide their own coverage. Self-insured companies, however, must comply with the state’s rules concerning benefits.
Documents obtained from the N.C. Industrial Commission show that both Mission St. Joseph’s and Ingles have repeatedly taken cases to the commission, seeking to block employee claims. The commission has repeatedly found against the employers, ordering them to pay the injured workers’ attorney fees as well as the other payments. The commission’s findings include “a pattern and practice of denying claims” on the part of Mission St. Joseph’s.
Mance declined to comment to Xpress about these matters.
Volvo Construction Equipment Plant Manager Dave Million said that his company needs “this package to stay competitive with Europe, Brazil, Korea and Canada. If we can’t be competitive we will move our plant.”
And Mike McManus, executive director of the Manufacturers Executive Association, expressed a need “to remove impediments to business.” He added, “I don’t see the dangers that others see in this document.”
After Ramsey closed the public hearing, Gantt said, “I’d like to thank all of you for coming. We all agree that we need to keep jobs here and help people.” He pointed out that there is currently a cap on payments, so that workers’ comp is not subject to unlimited growth. “Look,” said Gantt emphatically, “Rates are going down. Claims are going down. We cannot put the burden on the working people.”
Because we have environmental and worker safeguards, said Gantt, “I know it costs more to do business here — but I like that this country works that way.”
Ramsey then noted that Teich, Williams and Gantt are all workers’ comp attorneys and are taking care of their clients, but “Who is standing up for the 4,000 people who are no longer employed here?” Ramsey added, “Any business worth their salt is going to take care of their employees or they’ll lose them to some who will.”
Commissioner Bill Stanley moved that the whole legislative agenda be affirmed, and Ramsey seconded.
Gantt then made a motion to strike the sections on tort reform and workers’ compensation from Stanley’s motion, and Keever seconded.
Gantt’s amendment failed 3-2, and the agenda was approved by the same vote.
Keever commented: “Certainly we would like to keep businesses here. But if we err, I would hope we would err on the side of those who are most needy.”
Young shot back, “I would hope we would err on the side of business.”
Stanley got in the last dig, saying: “I don’t see this as hurting the workers; it will hurt the lawyers. It will make them work harder, but they get paid by the hour anyway.”
While the dust settled, commissioners unanimously approved the following appointments: Doris Giezentanner, Jane Gregory and Phil Kelly to the Buncombe, Madison, Mitchell and Yancey Facility Management; John Langlois and David Smith to the Council on Aging; Donald Derbert to the Adult Care Home Community Advisory Committee; William Maloney to the Workforce Development Board; and Winnie Ziegler to the Board of Health.