As NCR leaves, our “leaders” forget their spines

I’m waiting for just one elected politician to stop and say, “Wait a second, before you leave, how about you pay us back all the breaks we gave you.”

But, it’s not going to happen.

As P&G announced that they were going to collect Iams and whisk them down to Mason, no one said, “But, you are still getting a tax abatement from us, if you renege, we want it back.” In fact, a case could be made that Iams’ former CEO Clay Mathile, and recipient of $2.1 billion from P&G should have repaid the citizens of Vandalia for their investment in Iams with the abatements that were granted his company.

As Georgia buys our 2nd largest employer out from under us, we should be declaring war against the peach state. Using tax dollars to poach jobs should be a federal crime.

As NCR announces that they’re pulling out, we’ve got the Governor waving your hard-earned money at them, a state senator waiting until the official announcement, and a county commissioner first complaining that the lines of communication were bad and now shutting up and “stunned.”

In the meantime, Dayton will be losing a ton of payroll taxes. If you trust the governor’s math- about $110 million a year between 1,300 employees. I highly recommend reading all of the Dayton Business Journal story:

Multiple sources say  NCR Corp. will relocate to Georgia and announce the move Tuesday.

The Atlanta Business Chronicle, a sister publication to the DBJ, is reporting that NCR NYSE: NCR will move its headquarters and 1,250 jobs to Duluth, Ga., as well as opening a 550,000-square-foot manufacturing operation in Macon, Ga., that will employ up to 880 people…

An official from Ohio Gov. Ted Strickland’s office, who spoke to the Dayton Business Journal Monday night, said NCR’s CEO Bill Nuti told Strickland that the company has been eying Georgia for some time now.

…with local officials expressing frustration that the company was not responding to their requests.

Georgia Gov. Sonny Perdue is expected to make the official announcement Tuesday with NCR receiving tax incentives from the local officials in Georgia.

“NCR can’t recruit talent to move to Dayton, Ohio,” a source told the Chronicle.

Montgomery County Commissioner Dan Foley, sounding stunned when reached Monday night, declined comment….

The loss of 1,300 high-paying jobs from the city will have a negative impact on Dayton’s income tax receipts at a time when the city has faced multi-million-dollar budget deficits that have caused it to reduce its workforce and cut services.

State Sen. Jon Husted, R-Kettering, said he will retain hope until the company makes an official announcement.

“We have on multiple occasions reached out to NCR in an attempt to identify ways to secure their jobs and grow and be successful in Ohio,” Husted said Monday evening. “I am not willing to give up hope.”…

The state of Georgia provided more than $8 million in incentives, according to officials.

NCR, founded locally in 1884, is the Dayton region’s second largest company, with 20,000 global employees and $5.3 billion in revenue in 2008. The company, which sells ATMs and retail automation systems, is Dayton’s lone remaining Fortune 500 company…

In 2007, NCR announced it was relocating its executive offices to New York City and leasing an entire floor of the 7 World Trade Center building. But, on paper, its headquarters remained in Dayton.

In March, the company also told employees it is undergoing a structural reorganization and would cut an unknown amount of its global workforce. That same month, the company removed the language “world headquarters” from the sign at its Dayton campus, though it said at the time it was just temporary.

via Source: NCR to move headquarters, 1,300 jobs to Georgia – Dayton Business Journal:.

Note, the same thing happened when the state of New York bribed the NCR c-suite to NYC and the World Trade Center- see my post about it: Corporate Welfare will kill our economy.

If there is time for Federal intervention, it’s now. It’s time to stop this insanity. Reader TG sent this link, to which I believe we should be bringing a lot of attention and discussion to if we want to see our city survive: The New Rules Project: Eliminating Subsidies for Big Business.

If you believe that this practice of corporate carpetbagging has to stop, leave a comment.

[UPDATE JUNE 2] Now the Atlanta Journal Constitution, says GA offered NCR much more than $31.1 M.

[UPDATE 2 JUNE 2] It was $60 Million that Georgia offered: http://www.bizjournals.com/dayton/stories/2009/06/01/daily17.html?ana=from_rss

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19 Responses

  1. Gene June 1, 2009 / 11:34 pm
    You comment on all the breaks that they received, any specific dollar figure over the years?

    If Dayton is the “business” and NCR is the “customer” to Dayton (if you will) then getting tax breaks is just a part of the game – sorry. If “Restaurant”  offers a 2 for 1 special (tax break) they don’t try to charge current or former customers later because they found a better meal/better deal down the street.

    Yes, it stinks. But is not illegal. Nor should it be. But you state tax breaks – just saying that is fine, but is it true? And how much? And compared to the tax revenue the City of Dayton has received over the years?

    It truly sucks. But now they have a building to court other businesses – but that is not the game you want to play.

    They said they could not recruit talent – seems logical to me. Dayton new motto should be:

    DAYTON: If I did not live there, I’d move there.

    What will happen to NCR Country Club? It is owned by the NCR Employees. A lot of members are not affiliated with NCR anymore or never were in the first place. Maybe they will change it to Kettering Country Club.

    Fact is Georgia is better than Dayton in a lot of people’s mind. Not mine though.

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  2. Jeff June 2, 2009 / 5:11 am
    That Strickland offered $30M and Georgia offered $8M (if thats all it was) tells you this wasn’t about “corporate welfare” but probably other things.  Difficult to recrut people is one good reason.  Low coporate taxes in Georgia another, good air connections at Atlanta yet another. And reducing staff as part of the move even yet another.

    It could be simply that Dayton is just not a good location for a corporate HQ for a firm like NCR.

    (the Macon manufacturing facility report is new news.  There are reports that NCR might be opening some sort of back-office operation in either Columbus GA or Savanna).

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  3. Sammy76 June 2, 2009 / 7:18 am
    I’ve got  to wonder how this is going to fly with the stockholders.  Dayton bias or not, I’m not sure this is a wise investment.  The capital costs for this move I imagine will be pretty high; the benefits will be long to appear on the balance sheet, if ever.  They will lose a significant portion of their workforce (and some amount will have to be rehired), property will have to be bought/rented, the Patterson location sold (unlikely in this economic climate), relocation costs, etc.  All this is for some questionable benefits — airfare, quality of life (?!), lower taxes…?  Furthermore, 31.1M — we can (and should!) debate the ethics of such an offer, but 31.1M is a lot of money to leave on the table for, again, such a risky, low payoff move.

    Frankly, I’m still hoping this as an attempt to win tax concessions from the state of Ohio and they aren’t really serious about the whole thing.  We’ll have to wait for the announcement.

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  4. David Esrati June 2, 2009 / 7:48 am

    Apparently Georgia’s offer was more than 31 million according to the Atlanta Journal Constitution.
    I’ve got a video commentary uploading to Youtube 9for the second time- dang technology).
    I agree with Sammy76, this isn’t in the best interest of the stockholders, but- since when did they matter in these days of CEO as King?

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  5. Ryan June 2, 2009 / 8:49 am
    The real outrage needs to be over our elected officials’ reaction in lieu of pro-action.  If they were “shocked” by this announcement we have bigger issues.  1.  If we “the local citizens” are not shocked by the NCR rumors and knew the validity of said rumors before the elected official there is a problem 2.  Why did any city/county/state official wait until last week to try to confirm the rumors, or do anything about them?  Personally, I have seen the writing on the wall for some time.  The last minute attempts by our elected officials are pitiful.  The ignorance of our city/county/state representation is embarrassing.  I think Strickland’s offer looked more like a last minute desperate attempt to save face, not save a company.  I am sickened by the lack of pro-action from our elected officials.  This morning I am making donations to both David Esrati’s and Gary Leitzell’s campaigns in an attempt to make a change.  Should we be mad?  Yes.  Should we expect more from our elected officials?  Yes.  Lets make the “real” change that is needed.  Vote.   

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  6. Butler T. Reynolds June 2, 2009 / 9:23 am
    I believe that research shows that states that keep taxes and regulations low for all industries turn out better off in the long run.   Buying corporate headquarters may make governors look good, but it hurts all of us who have to live with their fiscal recklessness and hubris.

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  7. Donald Phillips June 2, 2009 / 10:38 am
    NCR has been moving out of Dayton since the mid-1970s, so why all the shock and outrage over the inevitable? Corporations have bailed out on Dayton in droves; the only newsworthy facet of this announcement is that NCR is the LAST corporation to bail out on Dayton.  Don’t worry, however, I’m sure the Most Metroids have covered this contingency.
    All’s well that ends calamitous.

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  8. Gene June 2, 2009 / 11:15 am
    David wants NCR to pay back tax breaks. Fine, across the board then.

    You can receive tax breaks for being married. Get divorced, pay it back.

    For having kids. If they fail out of high school or go to jail, BAM, pay it back.

    Tax breaks for first time home owners – foreclosure – SORRY, you must pay it back.

    New Car – cant make the payments – again, you must pay it back.

    Going Green, and then turning back – ut oh – time to pay the piper again. PAY IT BACK!

    Don’t return to the restaurant that gave you $5 off your meal: yep, pay it back!

    This could go on forever.

    It can be an exemption, a deduction or a credit – DOES NOT MATTER. When you fail or leave or don’t come back or don’t do it right, you must pay it back. ALL OF IT!

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  9. Jeff June 2, 2009 / 5:08 pm
    Looks like it was more like $60M from Georgia.

    The Atlanta Journal-Consitution has the details on the incentive package, which sounds more thought-out than one would expect.

    http://www.ajc.com/business/content/business/stories/2009/06/01/ncr_prize_to_duluth.html?cxntlid=homepage_tab_newstab

    Also, not the only reason NCR relocated.  Atlanta was the better business decsion, according to Nuti:

    http://www.bizjournals.com/atlanta/stories/2009/06/01/daily32.html

    ..which I can buy.  I sort of wonder if Nuti played Perdue on this…sort of hinting NCR would stay in Dayton, as a way to get that $60M sweetner.   We know Nuti didn’t set up a bidding war so maybe the GA subsidy wasnt really necessary.  Interesting stuff. 

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  10. Scott June 2, 2009 / 5:53 pm
    David,
    I agree with you on the suboptimal and ultimately destructive nature of governments trying to outbid each other with tax breaks to lure employers.  And I certainly share in the sorrow of Dayton losing such local institutions as NCR, Iams, and Mead.
    However, I must question your belief that Clay Mathile should be liable for a decision that P&G made 10 years after he sold the company.  As part of the sale, Clay obtained a guarantee from P&G that Iams headquarters would remain in place for at least 4 years…surely that shows care and committment to the Dayton/Vandalia community.  Stack that upon the 25 years that Clay grew the company from fewer than 25 local employees to more than 250, bringing new taxpaying residents to Dayton  (including yours truly), consistently putting his own money (as sole proprietor) on the line.  Clay is a model for what entrepeneurship should be – he took the risks, and he realized the rewards – as did those who worked for him.  And the Dayton/Vandalia community continues to benefit from his philanthropic endeavors.
    You’re barking up the wrong tree on that particular comment, David.

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  11. tg June 2, 2009 / 6:25 pm
    The The Great American Jobs Scam: Corporate Tax Dodging and the Myth of Job Creation
    by Greg LeRoy…

    Scam #1:  Job Blackmail or How to Get Paid to Do What You Planned To Do Anyway
    #2:  Create a Bogus Competitor
    #3:  Payoffs for Layoffs or How to Collect Taxpayer Subsidies While Downsizing
    #4:  Take the Money and Run
    #5:  Exploit the War Among the States or How the Auto-Plant Sweepstakes got Used to Blunt Trade Reform
    #6:  CAPCOs:  Beaucoup Ventured, Little Gained
    #7:  Pirate thy Neighbor’s Jobs
    #8:  Pay Poverty Wages; Stick Taxpayers with Hidden Costs
    #9:  Exaggerate the “Ripple Effect” Benefits
    #10:  Subsidize Privatization of Public Jobs
    #11:  Bust the Union
    #12:  Soak the Taxpayer
    #13:  Threaten to Leave New York City
    #14:  Ride Enron’s Coattails

    Why on earth would anyone’s heart bleed for a soulless corporation in today’s day & age is beyond me.  How long will we allow taxpayer dollars to subsidize private corporations? 

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  12. Gene June 2, 2009 / 6:56 pm
    We need to understand that our politicians (Dayton, Montgomery County, State of Ohio) are really weak players in these types of business dealings and they are not qualified to lead us. Our politicians are elected on sex and race rather than experience and knowledge. We get what we vote for. People in Dayton think it is OK for unqualified people to lead us. Republican leaders have been bad, but the Democrats are simply unqualified.

    I guess they represent us. We must be stupid and blind to the facts of the real world. NCR wanted to go from single A (city of Dayton) to the major league (Atlanta and NY) We can not expect to compete with that.

    Tax payers subsidise a lot of shit, but NCR did not receive any cash from Dayton, and not really all that many tax breaks. Heck, we give tax breaks to people who can’t afford kids yet they keep having them. Maybe we need to change ourselves before we point the finger at NCR.

    Who wants to cut my lawn? I will pay either $31 or $60. You get paid one of these, not both, and you get to chose which one. So what will it be?

    Kettering County Club, welcome to Montgomery County!

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  13. fu June 3, 2009 / 12:39 pm
    Have any of you clowns ever worked for NCR?

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  14. Gene June 3, 2009 / 2:40 pm
    fu, this is realllllllllllllly weird that you asked this question but YES, I worked as a clown for NCR in the mid 80’s. They would have family events and corporate events that I would attend as a clown. I was known as Patty the Clown, had an Irish theme to my costume, and I had a blast. Anyone who worked for NCR from 83-86 would remember this…….. but I moved on, I kept the costume, and I don’t know if I was ever replaced.

    So yes I worked and worked hard for NCR.

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  15. ShortWest Rick June 3, 2009 / 11:35 pm
    Uh Gene, I’m not sure your analogies work.

    Try: Put money in an IRA you get a tax break, pull it out early you get penalized.

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  16. Gina Smith July 9, 2010 / 5:05 pm
    Is Georgia a right to work state? I would venture to say its pay and unethical practices on NCR’s  part

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