Unanimous approval for $27M Pratt & Whitney subsidy

Pratt and Whitney engine
TURBOCHARGED: Aerospace manufacturer Pratt & Whitney will receive $27 million, Buncombe County's largest-ever economic development incentive, after a unanimous Nov. 17 vote by the Board of Commissioners. Photo courtesy of the Economic Development Coalition for Asheville-Buncombe County

In one of its last votes as a body with four Democrats and three Republicans, the Buncombe County Board of Commissioners found bipartisan consensus on its largest-ever corporate subsidy. Members unanimously voted on Nov. 17 to award a $27 million economic development incentive, paid over 14 years, to aerospace manufacturer Pratt & Whitney, pending the achievement of certain investment and job creation targets.

No commissioners, county staff members or Pratt & Whitney representatives addressed why the subsidy was necessary for the company to make its investment during the meeting. The manufacturer is a division of Raytheon Technologies, a Fortune 50 company with revenues of over $77 billion last fiscal year; as reported by the Hartford Courant, Raytheon had approximately $10 billion in cash on hand as of Sept. 30 and plans to resume share buybacks in 2021.

But language in the resolution approving the incentive stated that Pratt & Whitney “informed the county that if the county did not promise such economic development incentives, then P&W would not plan to come to Buncombe County and complete the project.”

According to Democratic Commissioner Jasmine Beach-Ferrara, she and her colleagues had spent 15 months discussing the proposal, asking “philosophical questions, very practical questions and everything in between.” Members of the public, however, didn’t learn about the project until an Oct. 22 press release from the Asheville Area Chamber of Commerce. The terms of the county’s incentive were not publicly presented until a Nov. 5 board briefing.

Of the more than 20 commenters who called into the public hearing on the incentive, all but Kevin Kimrey, director of economic and workforce development at A-B Tech, opposed the county’s spending. The college plans to build a $5 million training center that will prepare graduates for jobs with Pratt & Whitney and other advanced manufacturing careers.

Many of those criticizing the agreement pointed to Pratt & Whitney’s role in the national military-industrial complex. Roughly a third of the manufacturer’s 2019 revenues came from military engine sales, according to a presentation delivered by company representative Dan Field. He added thatover 80%” of the Buncombe County plant’s output would support commercial aviation but did not explicitly preclude military production.

“Making our county a hub for the manufacture of tools used for lethal, violent means, known to have cost the lives of hundreds of thousands of innocent people across the world, is absolutely unacceptable,” said Asheville resident Jenny Andry. “As an American taxpayer, I already share a portion of my wages with Raytheon’s $100 billion conglomerate, including Pratt & Whitney. I vehemently oppose sharing my home with them, too.”

While several board members, including Republican Joe Belcher and Democratic Chair Brownie Newman, said they may not necessarily agree with all of Pratt & Whitney’s decisions, they argued that the company’s promised 800 new jobs and $650 million in capital investment would bring an overall benefit to area residents.

“My question is whether the location of this new aerospace manufacturing facility will have any impact, one way or the other, on any of those important foreign policy decisions,” Newman said. “If I thought the decisions made by our local government would have a direct bearing on those issues, I would think about it differently.”

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About Daniel Walton
Daniel Walton is the Assistant Editor of Mountain Xpress, regularly contributing to coverage of Western North Carolina's government, environment and health care. His work has previously appeared in Capital at Play, Edible Asheville, and the Citizen-Times, among other area publications. Follow me @DanielWWalton

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20 thoughts on “Unanimous approval for $27M Pratt & Whitney subsidy

  1. Alyx Perry

    I’m most concerned about the use of our public funds. This is a significant payoff to a non-local, shareholder-owned corporation.

    How does this compare to how we invest in locally-owned businesses? Or how we’re assisting folks facing eviction during COVID?

    My first reaction is that this is inappropriate, but I’d like to learn more.

    • luther blissett

      It’s primarily a property deal between P&W and Jack Cecil / Biltmore Farms; the county greased the wheels behind closed doors and only announced it after the elections. Of course it stinks, but every sausage factory stinks.

      Again: large corporations can locate facilities wherever they choose; municipalities can’t relocate; large-scale property developers like Biltmore Farms can’t pick up their land and move it elsewhere. So corporations can demand taxpayer subsidies even if they could cover those costs from their change jar, and Jack Cecil can lean very heavily on the county because this is part of the grand scheme for Biltmore Park West.

      It’s possible to be simultaneously cynical about the genteel white-collar extortion of municipalities every time projects like this happen — remember Deschutes? — while recognizing that the county and region needs a more diversified high-skill job base.

    • Local Grandad

      This reporting is not as clear as the Citizen Times. Seems that incentives are a way of doing business in all 50 States. Love em or hate em. It’s a means to an end. They appear to pay for themselves in new property tax revenues – millions of new dollars a year to the County. So we rebate a % for the first decade? After the rebate period those dollars will pay for new transit, better roads, schools, public safety. List goes on. In the meantime we get the benefits of 800 manufacturing jobs that appear to pay well above most anything I’ve seen in Western North Carolina.

      • LR

        And isn’t it wonderful to see the county actually participating in attracting manufacturing companies offering decent paying jobs, benefits, etc? Look at how Henderson county and Greenville across the state line have boomed because they built companies and futures rather than hotels and tourism.
        Welcome Pratt & Whitney, grow and prosper!

    • Hi Alyx,

      Thanks much for reading. As I noted in my previous reporting on the topic (https://mountainx.com/news/buncombe-proposes-27m-subsidy-for-pratt-whitney/), the county has argued that the incentive will be revenue-neutral over the terms of the agreement due to the property and excise taxes Pratt & Whitney is expected to pay.

      The largest county incentive I can find to a locally owned business is a roughly $3 million subsidy to Black Mountain-based Ingles Markets arranged in 2010. More recently, the county gave a roughly $10,000 incentive to Burial Brewing in 2019, which overperformed its goals in both job creation and capital investment (https://www.buncombecounty.org/common/Commissioners/20190820/EDC%20BC%20Commission%20PPT-Final.pdf).

      Regarding the county’s COVID-19 rental assistance, Buncombe has given $200,000 of its own money to the One Buncombe Fund (https://mountainx.com/news/one-buncombe-fund-distributes-over-1-3m-in-covid-19-relief/) and directed substantial amounts from federal grants (https://mountainx.com/news/buncombe-proposes-815k-for-covid-19-housing-utility-assistance/).

      Thanks much,
      Daniel

  2. Bright

    Well, well, well…so Aville does have the money to help…just depends who you are.

  3. dyfed

    For a few years, Asheville won’t get paid taxes for property that they wouldn’t get paid taxes on anyway if nothing was built there. In exchange, we get a huge boon of jobs and industry. It is not hard to understand why this is a good deal.

    • luther blissett

      In the same way that good ideas shouldn’t need a lot of lies told about them to convince the public, good deals shouldn’t need to be negotiated in secret for 15 months, especially with one of the county’s largest and most powerful private landowners, and then have the terms announced straight after an election and voted on hastily by a lame-duck commission.

      That lack of transparency creates the impression that there’s a catch: that someone is getting away with something under the radar. Maybe there isn’t a catch. Maybe it’s how corporate behemoths and the local landed gentry prefer to do business: get the local municipality to pay the vig, but keep it secret. So you can welcome the kind of jobs this facility promises to bring while hating the process. You can look at the terms of the deal and still wonder if there’s a catch somewhere down the line.

      • dyfed

        As if the County didn’t know that the NIMBY faction would come out in force to prevent this if it wasn’t a fait accompli? No, if this is the way things have to get done to prevent obstructionism, I’m OK with it. Perhaps if those activists disagree they can vote for some new candidates next election. I think we all know they won’t have the attention span.

        • luther blissett

          Yeah, let’s try to unpack the idea of candidates running for election on a pledge that they’ll negotiate deals that will help their supporters, but it’ll all be done in secret. “Vote for me and you won’t know what I’m doing behind closed doors but I promise you’ll like it.”

          But hey, it tells us a lot about your principles: transparency in government is apparently unnecessary as long as it makes you happy and owns your ideological opponents. That might come back to bite you.

          • dyfed

            Sure. “Transparency in government” is not a terminal value for me. If the government is run well (and I’m not claiming it is) then I don’t care if I learn exactly how the sausage is made as long as the people, at some point, get to examine and eat the sausage. I vastly prefer this to a government where I get to see the entire sausage made and thrown to the dogs, livestreaming, with running commentary from self-important bluecheck Twitter.

            Again, everybody knows what was done here, and if they’re unhappy with it, vote ‘em out next time around.

            So far as ‘owning my ideological opponents,’ that’s unimportant. If I really wanted them to suffer, I’d encourage them to continue thwarting any sort of smart growth and watch them starve themselves. As it is, I want to force them to eat their vegetables. If that’s wrong, mea culpa.

  4. Mike

    While I totally respect the concerns about supporting the war machine, in general terms it’s not just about future property taxes from the manufacturer. It’s also about the hundreds of good paying jobs created, the property and sales tax revenue those employees will generate, and the literally generational wealth this will initiate.

    It’s not a subsidy or incentive- it’s an investment both in terms of revenue and the overall good of the community.

  5. NFB

    How many of those 800 jobs go to local people, and how many to people brought in by Pratt & Whitney which will just further exacerbate the housing problem Asheville faces?

    • dyfed

      The housing problem is caused by not building enough housing. Unless you are proposing that we build a big beautiful wall around Buncombe county?

    • indy499

      It is estimated that the US will grow by 40 million in the next 30 years. Not surprisingly, a chunk of those folks are heading our way. You can keep your head in the sand, or get ahead of it and grow supply in an intelligent manner. Otherwise the growth will occur just outside the jurisdiction with the insane red tape and costs — think Asheville. That just adds to congestion.

  6. UNGN

    I have been involved with the manufacture of turbine airfoils for over 30 years. Looking at the site, it is non ideal as it will likely need a new exit off I-26 and lots of clean sheet of paper Infrastructure. If not for the level of incentives offered, this plant would most likely go to Texas or Florida or Arizona (low cost states that currently do this type of work) or another less ideal state that offered similar incentives. But, because they have to invest so much in infrastructure, it means they are planning for the long haul.

    The nearby Power Plant appears to be a huge plus in the decision. The MFG process will involve melting/casting alloys that don’t melt inside of a Turbine engine and power requirements will be large. Solar panels on the roof aren’t going to cut it.

    The secrecy can be easily explained. These parts are currently being made elsewhere, in higher cost areas of the county, using less automated processes and union labor. Pratt & Whitney would not want anything publicly announced until a deal was 95%.

    The parts being manufactured in the plant will be used to build airliners that are 25% more fuel efficient and 40% quieter than the 25 year old planes they replace, The processes used in manufacture are extremely hard to export and some actually require congressional approval for export. Nobody likes subsidizing corporations, but if you need jobs that won’t be shipped to China or Mexico anytime soon, these are the type of jobs that you want.

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