U.K.-based contract manufacturing company ACW Technologies Ltd. will open a new $4.9 million manufacturing facility in Durham.
The new Durham facility will employ anywhere from 150 to 200 employees. ACW specializes in assembling electromechanical products such as computers, digital video recorders and printed circuit boards.
“Durham was in competition with several other sites in the Triangle and the eastern seaboard,” said Casey Steinbacher, president and chief executive officer of Greater Durham Chamber of Commerce. “They chose Durham because they could fill their positions with the talent pool here. And honestly, that’s the biggest reason we get companies to come here.”
The agreement included a $120,000 incentive package from the city of Durham and the One North Carolina Fund, which continues a controversial tradition of providing incentives to attract large companies to the region.
Steinbacher added that the incentives will be paid out over time according to the actual number of jobs ACW creates. The average salary will be around $30,000 with full benefits and health coverage.
Jeff Benes, ACW vice president and general manager, offered several reasons for locating to Durham.
“We have lots of customers on the East Coast,” he said. “There are good technology resources in the Raleigh area. Durham is in close proximity to the airport and we have received so much support from the city.”
Benes also noted that ACW received an incentive package from the city.
“The grants that we received from N.C. are what ultimately drove us to come to N.C.,” he said. “And the grants from Durham are what drove us to come to Durham.”
In recent years, North Carolina has had mixed experiences with incentive packages offered to big businesses. Dell Computers was offered a total package of $280 million to provide 905 jobs in the Winston-Salem area, but Dell closed the plant and walked away from the incentive package in order to cut back on their desktop manufacturing division, the (Greensboro and Triad) News & Record reported in October.
Although the ACW deal is much smaller than the $280 million offered to Dell, many are still skeptical about the efficacy of this incentive package.
Robert Orr, former North Carolina Supreme Court Justice and executive director of the North Carolina Institute for Constitutional Law, has been a staunch critic of such incentives.
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“A lot of these incentives are just like putting bait in water. Many big companies—not all, but some—use site consultants who make money off incentives, like a commission,” Orr said, adding that incentives do not actually factor into the business-making process of a large company. “Take ACW, $120,000. That’s coffee and doughnut money. They aren’t making a business decision on that. We are giving money away with no impact.”
Orr said a system based on incentives causes unfair competition among municipalities, and that places like Durham can have an unfair advantage against smaller towns. He maintains that what attracts companies is good education, a tax friendly environment and other more long-term attributes.
But Kevin Dick, a director in Durham’s Office of Economic and Workforce Development, argues that data shows that incentives create jobs and improve the tax base.