CHATHAM COUNTY – In a deal described as “historic” by North Carolina Governor Roy Cooper, Vietnamese automaker VinFast will invest $4 billion in Chatham County and expects to hire up to 7,500 workers during a first phase of the project. But the deal could have consequences for the local and national economy, both positive and potentially negative, sources told WRAL TechWire.
The deal became official this afternoon when North Carolina Governor Roy Cooper announced the project with company officials as well as an ambassador from Vietnam. Earlier in the day, the state’s Economic Investment Committee unanimously approved an economic incentive package that could provide the company with more than $850 million in incentives if the investment goals and job creation are achieved.
Chatham County will also provide up to $400 million in local incentives, according to a North Carolina Department of Commerce official. The facility will be a site where assembly of two electric SUVs will take place, according to the state official.
“VinFast will bring North Carolina’s first automotive plant, second electric battery plant,” Cooper said, adding that thousands of direct and indirect jobs would also come to the state’s economy.
The project cements North Carolina’s status as a major player in the automotive industry, according to a site selection expert who spoke with WRAL TechWire this week.
“This coveted project in the booming electric vehicle industry will boost retail sales across the Triangle region, spur new housing investment by developers and create thousands of well-paying jobs,” said John. Boyd, Jr., director of The Boyd Company, Inc., which helps clients select economic investment sites, in an interview with WRAL TechWire this week.
The growing presence of the automobile will play a major role for the state of North Carolina and for its residents and workers, Boyd noted.
“Workers from some of North Carolina’s most remote and rural areas with high unemployment rates will also relocate for the kind of attractive, well-paying manufacturing jobs offered by the growing electric vehicle industry,” he said. noted Boyd.
“With this announcement, we are celebrating another transformational victory for the region, with three Carolina Core megasites landing high-impact projects in the past 100 days,” said Michael S. Fox, president of the Piedmont Triad Partnership, in a statement. . “With this victory and the existing operations in the region by Volvo Trucks, Thomas Built Buses and the announced Toyota plant, a leading electric vehicle cluster has emerged.”
Toyota announced in December 2021 that it invest $1.29 billion at the company’s first North American electric vehicle battery plant in Randolph County, not far from Triangular Innovation Pointthe site that VinFast has selected for its ease.
“State officials have worked diligently to support certain industries, such as aerospace, life sciences and, more recently, batteries and related technologies,” said University professor John Quinterno. Duke, in an interview with WRAL TechWire. “Despite the political tensions that may exist, Republican and Democratic officials in Raleigh have shown strong willingness to spend ever-increasing amounts of government grants to attract businesses to come to the state.”
Common ground, strong climate
Boyd told WRAL TechWire that economic development is an area where public officials have found common ground, collaborating to cultivate “one of the most attractive business climates in the country.”
In November, North Carolina was ranked first among all US states for its strong business climate by Site Selection magazine. the toyota announcement monitoring. Earlier this year, Boom Supersonic announced a $500 million investment in a site based at Piedmont Triad Airport, for a facility that company officials say could employ up to 2,400 workers once fully operational.
According to an annual report from the Economic Development Partnership of North Carolina (EDPNC), released last week, the organization helped secure 174 business relocations and expansions in 2021. According to an EDPNC statement, “the State is expected to see nearly 24,000 jobs and $10.01 billion in capital investments.
Many of these projects are tied to some form of incentive. Take the Toyota Accord and the Boom Supersonic Accord, for example.
The Toyota deal could provide the company with a refund of $79.1 million in employee tax deductions over 20 years, if the company meets annual hiring and investment goals set out in the deal , according to previous reports from WRAL TechWire. State and local incentives tied to Boom Supersonic deal approach $130 million, says front WRAL TechWire reports.
And the VinFast deal could generate a state and local incentive package of around $1.25 billionif the conditions are met.
“The problem with these grants is that it’s often difficult to know if they’re really needed,” Quinterno said. “If the company came to the area anyway, all the grants would be wasted money that would divert resources that would otherwise be available for public services.”
Impact on the triangle
Economic investment deals made at the state level will have a local impact, said Dr. Anne York, an economist and professor at Meredith College. This means that local governments will have to be “particularly proactive in managing land use and developing infrastructure”.
This means that local governments, including those across the Triangle region, will need to focus on the impact that economic growth and economic development will have on the region, beyond job creation goals.
For example, York said, how could municipalities drive innovation to ensure their communities have affordable housing for workers and community residents? How will infrastructure, such as roads, schools or other public infrastructure be improved or upgraded.
“Local governments will likely need to make decisions faster and more efficiently than they have in the past to try to stay ahead of our projected economic growth,” York said.
Chatham County Responds to Major Changes Ahead
Local economic development officials say the news will transform Chatham from a quiet bedroom community into a hub for high-tech manufacturing.
Krystal Stone, co-owner of Ray’s Grocery, just down the road from the megasite where Vinfast will build its new factory, says the Moncure countryside will soon be a boom town.
“It will bring a lot of traffic to the area and it will be a lot more crowded, so it won’t be as small a community as usual. But you know, I guess that comes and goes with everything when you build,” she says.
Moncure resident Donna Horton is less excited. She says the local roads are already dangerous.
“It’s just going to be too crowded. It is a rural area with quiet neighborhoods. I think it will make things worse,” she said. “But, I mean, if it’s going to bring in all those jobs, that would be great.”
There can be unintended consequences of economic growth, Quinterno warned.
“Left unchecked, this pattern of growth can fuel the displacement of existing residents, especially those tied to disadvantaged industries or working in more modestly paid support industries,” Quinterno said. “These people may find themselves excluded from their long-standing communities despite their employment and hard work. And, of course, retirees, people with disabilities and others on fixed incomes can find themselves kicked out of their communities against their own will and despite having done nothing wrong.
Boyd told WRAL TechWire that when it comes to economic development projects, “a rising tide lifts all boats.”
According to Boyd, “opponents should only look at what BMW has been able to achieve in Spartanburg, South Carolina, over the past two decades.”
When BMW announced plans to set up an assembly plant in Spartanburg, Boyd said, many people thought it wouldn’t be able to recruit enough workers from an area that had no automakers or suppliers.
“BMW now employs more than 10,000 people at its hugely successful Spartanburg plant,” Boyd said. The availability of labor was part of what attracted the arrival to invest in the regionboth in upstate South Carolina and in Charlotte last year.
“We see this same dynamic playing out in the Triangle with the EV planting its flag and growing as the sector replaces the internal combustion engine in the months and years to come,” Boyd said.