RALEIGH — North Carolina officials are looking back at a second failed effort to attract a major carmaker’s American headquarters as the state looks ahead to luring Volvo’s first-ever U.S. assembly plant.
North Carolina lost out in January when luxury automaker Mercedes-Benz announced it’s moving its U.S. headquarters from New Jersey to suburban Atlanta. Documents newly released by the state Commerce Department indicate a relatively small role for tax breaks and other incentives.
A document prepared by Gov. Pat McCrory’s staff ahead of a meeting with Mercedes executives in October said North Carolina was offering Mercedes $15.3 million in tax breaks and customized worker training.
Georgia offered $23.3 million in cost savings to coax 800 Mercedes jobs paying an average of $78,000 each, according to a December letter from Georgia’s economic development commissioner to a Mercedes consultant.
Mercedes-Benz USA CEO Stephen Cannon said the executives wanted to be closer to the company’s growing customer base in the Southeast, a seaport in Brunswick, Ga., and its manufacturing plant in Alabama. Mercedes also put a high priority on flights from Atlanta’s airport, the world’s busiest.
North Carolina’s offer from its main discretionary fund for targeted corporate tax breaks was smaller than two earlier efforts to land corporate headquarters operations last year. The state offered about $28,000 per job for Bubble Wrap and food packaging manufacturer Sealed Air Corp. to move from New Jersey and for Toyota to move its North American headquarters from California. Mercedes was offered a job development investment grant, or JDIG, worth about $17,750 per job.
Top North Carolina business recruiters were begging state lawmakers during the months Mercedes was shopping for a new headquarters site to authorize more funding for JDIG tax breaks as the incentive program approached its cap.
Georgia already has in place a way of calculating corporate taxes that North Carolina lawmakers are considering broadening to attract Volvo or another car manufacturing plant.
North Carolina now taxes the profits of most multistate corporations with a formula that takes into account property, payroll and sales the company has in the state. The change proposed by several lawmakers would tax only the company’s sales. Changing to a “single sales factor” approach would tax only the share of a corporation’s total profits generated from North Carolina sales.
Volvo Cars recently said it has several sites in mind for a $500 million U.S. auto assembly plant in a push to increase American sales. The Carolinas and Georgia are among the states that are reportedly in the running.
Sweden’s Volvo Group — the former parent of Volvo Cars — has its U.S. headquarters in Greensboro. It manufactures trucks in Dublin, Va., and engines in Hagerstown, Md. Volvo’s car division was separated and sold to Ford Motor Co. in 1999. Volvo has been owned by Chinese automaker Geely Holding since 2010.