A showdown that could make history is set for Monday, when the governor and legislature will face off over paying taxpayer money to keep factory jobs.

Gov. Mike Easley on Thursday sent notice for the General Assembly to convene next week. At that session members will consider overriding his veto of a bill that would give Goodyear Tire & Rubber Co. as much as $40 million to stay in Fayetteville.

If lawmakers negate his action -- and that appears likely -- it would be the first time an North Carolina legislature has overridden a governor's veto.

The legislation overwhelmingly passed in the waning days of the session last month. It sets up a new incentives program, written for Goodyear, to encourage big manufacturers to upgrade factories instead of moving jobs overseas.

Easley rejected the measure last week, saying the bill was unfair and veered too drastically from the state's policies on aid for business. He is pushing his own measure to be taken up next year. But backers of the bill that passed said that without it, Fayetteville could lose as many as 2,750 jobs with average wages exceeding $50,000 annually.

"Here we have a Democratic governor who ought to be looking out for the best interest of the worker," said Darryl Jackson, president of Local 959 of the United Steelworkers, a labor union that represents 1,800 of Goodyear's Fayetteville workers. "He's really disappointing me. ... It's in everybody's best interest to make sure that Goodyear continues" to operate in Cumberland County.

Goodyear's contest

Goodyear touched off a contest among states including North Carolina, Alabama and Tennessee as it adjusted its business strategy to account for rising imports and lower costs overseas. As the company considered which plants to close and which to upgrade, politicians moved to sweeten the appeal of their regions.

In August, after the N.C. General Assembly approved the new incentives plan, Goodyear said that it would modernize the Fayetteville factory and a plant in Gadsden, Ala. In North Carolina, Goodyear can get as much as $4 million a year for 10 years, provided that it invests at least $200 million and maintains at least 2,000 full-time or contract workers.

The incentives plan marks a departure for the state, which has rewarded companies with tax breaks and grants to get new jobs, not just to keep existing ones. Easley further blasted the legislation because, based on the way it is written, Goodyear technically could cut 750 jobs and still get the full assistance. Goodyear has announced no plans for job cuts.

Easley also said it was unfair to rivals, such as Bridgestone Firestone, which employs 1,800 in Wilson, because they might not be able to get similar help under the narrowly crafted criteria.

"It would set a dangerous precedent for North Carolina's economic development policy," Easley wrote in a letter to lawmakers this week, explaining his veto. "The state needs to ensure that your incentives result in more investment and employment, not providing cash grants for companies that will cut jobs."

Under his counterproposal, a qualifying manufacturer would have to maintain all existing jobs and pay wages at least 140 percent higher than the average in the county where they operate. They would get grants equal to a portion of any new taxes they generate. Local governments also would be required to chip in.

House Speaker Joe Hackney, an Orange County Democrat, did not hold much hope that legislators and Easley would compromise before Monday. "I don't want to rule anything out until the negotiations reach their logical conclusion, but I doubt it," he said.

Hackney and Mark Basnight, a Manteo Democrat who leads the Senate, both expect enough votes to override the governor's veto. It takes three-fifths of those present to cancel out his action.

In the past week, those on both sides of the issue have stepped up efforts to sway lawmakers. The Cumberland County Business Council, which helps recruit business, sent a letter to members explaining the importance of Goodyear to their area. They said that Goodyear pays $142 million a year in wages to Fayetteville workers and provides health benefits to 5,741 employees and their families.

Former N.C. Supreme Court Justice Bob Orr, a vocal critic of incentives and Republican gubernatorial candidate, asked Republican legislators to uphold the veto because the legislation is unfair to small businesses that get no state help as they seek to modernize.

Second thoughts

At least a few legislators have had second thoughts.

Senate Republican leader Phil Berger of Eden, who voted for the measure, said he is now leaning toward sustaining the veto. "People say we ought to benefit those companies that have been here for a while," he said. "The next question is: Where do you draw the line?"

North Carolina has provided generous grants, tax breaks and incentives to companies including Dell, Google and FedEx to open new facilities. And some lawmakers say it's only fair to protect existing jobs and help those businesses that have been in North Carolina for decades.

"I don't think the people who work at Goodyear and their families are any less worthy of state help than the folks that are going to work at Dell or Google or FedEx or any of these other marque companies that have gotten more in state aid than what this package provides," said Rep. David Lewis, a Harnett County Republican.

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