Caterpillar Chooses Winston-Salem

Jeremy Loeb: The Triad will soon be home to a new manufacturing plant. The heavy equipment company, Caterpillar, has agreed to build a factory in Winston-Salem that will employ several hundred people. Jessica Jones reports state officials were in a celebratory mood as they announced the news earlier today. 

Jessica Jones: Governor Bev Perdue says she decided to wear a bright yellow jacket today because it's Caterpillar's company color. As she stepped up to the podium at a news conference carried by WFMY, Perdue told a room full of local, state and company officials she was sharing the stage with some of the best economic developers of North Carolina.

Bev Perdue: And so today my friends is a really big red letter day, in all bold capital letters, because just as the Winston-Salem journal proclaimed this morning, it is my official honor, to welcome Caterpillar to our city, as you have agreed to build a new manufacturing plant here.

Perdue thanked local and state officials for working together to attract the Illinois-based manufacturer to North Carolina. They put together a package of incentives worth about 75 million dollars for Caterpillar. Winston-Salem was in the running with Spartanburg, South Carolina, and Montgomery, Alabama for the new factory.

Perdue: It's not just a little plant, it's a nice plant, it even satisfies a woman who's an indiscriminate shopper, four hundred and 26 million dollars invested over the next five years, 392 jobs that they can count right now. And I believe once you get 'em here they're going to continue to grow this site because of the quality of the workforce and the commitment of this community to doin' it right in the Triad.

The decision couldn't come at a better time for the Triad. Local officials are still recovering from the computer company Dell's decision earlier this year to shutter its multimillion dollar factory in Winston-Salem. Caterpillar's 850 thousand square foot facility will be located next to the Dell site. Company executive Mike Murphy says it will manufacture parts for mining machines.

Mike Murphy: In this facility, we're going to build components for some very very large trucks. One axle we build will be like thirty foot long, it weighs a hundred thousand pounds. The tires for this truck are more than 13 feet tall, they cost 43 thousand dollars apiece, and you need six.

Local business boosters say they're not surprised by the company's decision to come to Winston-Salem. Caterpillar already employs about a thousand people in the state.

Bob Leak: I think when it came down to it, it was a combination of things, it was certainly the ready labor force, and the technical training capabilities of our community college system.

Bob Leak is with Winston-Salem Business Incorporated, an economic development group in the city.

Bob Leak: But also our location with the highway system, and access to the ports on the East Coast, for their raw materials in and their finished product out. And combined with just the overall cost of business in North Carolina, I think it quickly became a favorable place for them to consider.

But other North Carolinians aren't as optimistic about the arrangement, especially with the incentive package. Bob Orr is the executive director of the North Carolina Institute for Constitutional Law. He says the only thing he likes about the deal is that it creates jobs.

Bob Orr: What I'm not happy about is the process by which we essentially give away millions of dollars in badly needed public revenue to companies that earn hundreds of millions if not billions in profits. Once again we will be played off in a series of bidding wars, and of course the ultimate winner is Caterpillar.

Orr says a package of incentives worth 300 million dollars wasn't enough to keep Dell in Winston-Salem. It was economically more beneficial for that company to move its operations to Mexico. Meanwhile, Caterpillar officials say their North Carolina plant will allow them to increase plans for expansion around the world. Construction on the facility will begin this fall.  Jessica Jones, North Carolina Public Radio, WUNC.