Volvo Car Corp. announced Monday that it plans to invest $500 million to build a new plant in the United States, and multiple reports have said North Carolina is among several southeastern states in the running.
Volvo’s announcement didn’t mention any specific locations, saying it has “drawn up a short list of potential locations and full details of the location of the new factory and the size of the investment will be announced at a later date.”
The Financial Times and several other news outlets reported in January that the company was in talks with North Carolina, South Carolina and Kentucky.
The automaker is now moving quickly. The company’s CEO, Håkan Samuelsson, told The Wall Street Journal that the location will be announced in about a month. Volvo is owned by China-based Geely Holding Group.
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That statement is likely to add urgency to the incentives debate in North Carolina. The House and Senate have each developed competing jobs bills that would both add funding to the state’s main incentive fund, Job Development Investment Grants, which is out of money.
The Senate wants the plan to include lower corporate taxes for all companies, which the House plan includes tax credits for jet fuel and technology data centers.
Commerce Secretary John Skvarla has said the divide “doesn’t indicate that North Carolina has its act together.”
Sen. Bob Rucho, the senate finance chairman, disagrees. He says automakers are most interested in states with the single sales factor. That’s a method that calculates companies’ tax liability based entirely on sales – instead of also factoring in their payroll and property value. It’s effectively a corporate tax cut that favors companies with extensive property and payroll taxes in the state.
Senate bills call for using the single sales factor for all companies. The House proposal would only give the benefit to companies investing more than $1 billion – likely an automaker.
“The Senate is very supportive of doing the single sales factor, which will fit in very nicely with Volvo,” Rucho said Monday. “It puts us on equal footing with South Carolina and Georgia.”
Rucho said legislators need to take time to revise the JDIG program before extending it. Senate proposals would limit the percentage of JDIG grants in urban counties, while reserving the most generous incentives for companies bringing at least 2,500 jobs, such as an auto plant. “Under the circumstances, we have a responsibility to do our due diligence and be sure we act in the most prudent way,” he said.
North Carolina has assembled three “megasites” that state officials are offering to automakers. The sites are in Randolph County, Chatham County and Edgecombe County. Reports have also indicated that Land Rover is also considering the state.