County to consider lowering Caterpillar incentive requirement

county commissioners

County to consider lowering Caterpillar incentive requirement
August 04
08:05 2016



Along with a public hearing on county bonds on Aug. 8, county commissioners will consider other items, such as a reduction in the amount of employees Caterpillar needs to receive county incentives.

Among the many items on the commissioners full agenda on Aug. 8 are public hearings on two items involving incentives for businesses. One is $118,000 to entice furniture maker Beaufurn to relocate to Forsyth County. The other is a change to a 2011 agreement with Caterpillar for $10.1 million in incentives that lowers the jobs requirement.

The Caterpillar facility off Union Cross Road makes axles for mining trucks. A global downturn in mining has caused the company to reduce its work-force globally. Locally, Caterpillar has experienced a reduction from 341 employees last year to 289 in January.

“The current workforce totals at the Winston-Salem facility reflect alignment with global demand in the mining industry,” said Caterpillar Corporate Media Manager Rachel Potts in an email statement.

The company told the county it is unsure if it’ll get below 196 jobs it needs to have in order to not pay the incentives back, but still wants to lower that requirement to 50 jobs.

Caterpillar is also asking to add Alabama-based Progress Rail, a Caterpillar subsidiary that supplies rail-road and transit system parts and services, to the deal to bolster the amount of jobs. Caterpillar is also asking to extend the deal from 10 years to 15, meaning the company will be eligible to receive benefits longer but the maximum amount it may receive wouldn’t go up.

County Commissioner Walter Marshall said he supports Caterpillar’s request.

“This is the best option to save jobs,” he said.

Marshall said that there are clawback provisions that force the company to completely pay the county back if it can’t meet the jobs requirement, like what happened when Dell closed down its plant, but that he had much rather see Caterpillar remain a local employer. He said he was confident the company would rebound and be able to expand its workforce again.

County Commissioner Chair Dave Plyler also said he had confidence in Caterpillar, a global company with sales and revenues of $47 billion in 2015.

“From my perspective, I don’t want to see Caterpillar leave our county because what goes down does go up sooner or later, and Caterpillar isn’t the type of company that promises one thing and does another,” said Plyler.

The county is only part of the incentive deal with Caterpillar, which also includes The Millennium Fund, Forsyth County Development Corporation and the City of Winston-Salem, which gave the company$13.35 million in incentives. It will need to appeal to each of them to amend the deal.

The incentive deal the county is considering for Beaufurn, a global furniture maker located in Advance, is $118,000 over a five-year period. In exchange, the company would invest $6.8 million over a one-year period in the county, create 15 new full-time or full-time equivalent jobs and retain its current 33 positions. Beaufurn makes professional grade furnishings for commercial businesses and is looking to relocate to a larger space.  The company is currently considering Forsyth, Davie and other counties for its new location.

Marshall said that he is for offering incentives to Beaufurn. He said incentives are vital for the county to compete with other municipalities to attract businesses that create good jobs. Plyler said the deal would be a “win-win situation” with a nationally known company.

Even with its packed agenda, the biggest items at the August 8 meeting will be the county commissioners’ votes on whether to place three bonds on the November ballot. The public will get to comment before the vote.  The bonds items are a $350 million Winston-Salem/Forsyth County Schools bond, a $65 million Forsyth Technical Community College bond and a $15 million Recreation and Parks bond.

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Todd Luck

Todd Luck

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