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Incentives, Anyone?

Dell logoThe latest news from Dell, courtesy of the Greensboro News-Record, is not good. The computer giant has laid off 265 people by eliminating a shift at its Winston Salem facility. Moreover, “[c]iting company policy, Dell officials said they do not make predictions about financial results or expected business.” This, of course, is the same Winston Salem production plant that state and local leaders lured to the city with rich, and I mean rich, incentives in 2004. Two rounds of pink slips later, the company is far from meeting its established goal of 1,700 employees by September 2010. They better hope the computer market picks up because they’re down to 1,140 employees now. Is that worth $280 million state and local dollars? Doesn’t seem like it. I know the state could really use its $242 million investment right about now. Instead, we’ll be chipping in for the unemployment of 265 former Dell workers. Local leaders will have their hands full in Forsyth, which had the state’s seventh highest rate of initial unemployment claims in March. I bet they’d rather have their $37 million, notwithstanding Dell’s generosity, giving all of $750,000 to charities in almost 5 years. Wow.

The poor judgment shown in offering Dell such a huge package has been the subject of a court case, pitting two former NC Chief Justices against one another, and a study, which showed the state used a faulty model to predict its returns. That means we’ll probably spend more than we’ll see from this deal. This is the part where everybody runs around kvetching about how no one could’ve foreseen the magnitude of this economic downturn. Not only is that wrong, but it illuminates how we got into the fine mess we’re in: spending more than we could afford on something that wasn’t really worth it. Sound familiar?

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