According to the Associated Press, most of the incentives were predicated on hitting job targets, so they were not yet paid out. The Mayor of Winston-Salem says that the city’s contract with Dell requires the company to repay all its up-front spending, about $15.5 million.

But the company may not have to repay the money it received for reaching its early job targets, or for state training or infrastructure spending, according to the article, coming to about $18 million.

So, the lessons I draw are two: first, the deal was mostly well-designed, with back-loaded subsidies largely obviating the need for clawbacks (see the Weber and Santacroce study on this website) and Winston-Salem writing clawbacks into its contract; second, the state overpaid for the investment in the first place, on the order of about $300,000 per job.

Source: Associated Press State and Local Wire, “Millions Spent Luring Dell to NC Can’t be Recouped,” October 9, 2009.

We (Washington) lost Boeing in a bidding war with Chicago after decades of civic investment by the company, in everything from the arts, to schools to public facilities. This was merely a sign of things to come. Just the other day, Boeing’s most significant contribution to an educated workforce – free tuition for Boeing workers for any post-secondary eduction – has been canceled. Now, every other day we hear stories about Boeing moving production to other states if we don’t reduce taxes. And they want concessions from Boeing unions. I foresee ten years of concessions and tax reductions ultimately resulting in Boeing exporting half of all its jobs, if not more. And ceasing to see itself tied to any place, whether Washington or Illinois or South Carolina.

Let the NC Dell plant be a warning to all.