A Short Circuit in Florida

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Jabil Circuit Corporate Headquarters, St. Petersburg, FL

Jabil Circuit Corporate Headquarters, St. Petersburg, FL

Less than a month after securing nearly $35 million in subsidies for the creation of 858 jobs and the construction of a new corporate headquarters in St. Petersburg, Florida, Jabil Circuit announced it would cut 120 local positions. The electronics manufacturer’s conduct has triggered public debate over its commitment to Florida as well as the transparency of economic development deals made by local governments.

The Jabil deal was conducted under a veil of secrecy. As is the case in many economic development deals, St. Petersburg city council members were told that a major area employer was threatening to pack its bags but not informed of the identity of the employer before the subsidy deal was brought to a vote. Florida’s “Government in the Sunshine” law is intended to create a transparent and accountable government, but the law exempts economic development deals such as “Project Extreme,” the moniker assigned to the Jabil deal.

Extreme, indeed. Jabil’s track record spells risky business for Florida.

Layoffs are old hat for Jabil in Florida. The company moved there from Detroit 26 years ago and has eliminated over 1,000 of its Florida positions in the past ten years. Layoffs have included the elimination of 300 jobs in 2001 (then a full ten percent of the company’s workforce) and another 500 jobs in 2003. Jabil let go of 80 workers just last year. While the company denies that its current layoffs are unrelated to plans to ship jobs overseas, its employment growth in low labor cost markets would indicate otherwise.

Jabil also has a penchant for procuring subsidies in Florida. As the company reported in a quarterly SEC report: “Several countries in which we are located allow for tax holidays or provide other tax incentives to attract and retain business. We have obtained holidays or other incentives where available.” In 2001, the state promised the company $3.4-million in tax refunds in exchange for creating 1,150 new jobs in Florida. The jobs weren’t created, and the subsidy went unpaid.

Two years ago, Jabil unveiled plans to build a two million square-foot headquarters on 94 acres it has owned in St. Petersburg for nearly ten years, but it never moved on the project. This year the company claimed to have put in bids with California and Michigan for relocation incentive deals and received responses from two cities. The location of Jabil’s new headquarters? The same 94 acres purchased earlier in the decade.

While Jabil’s $35 million subsidy is tied to the construction of a $49 million campus and the net creation of 858 new jobs, there is no requirement that the company prevent further layoffs to receive the money. Project Extreme Job Churn, anyone? Massive subsidies that can still result in the loss of 1,000 jobs are a cry for better accountability and full disclosure of the goings-on that occur behind closed doors.

One Response to “A Short Circuit in Florida”

  1. Leigh McIlvaine Says:

    http://www.tampabay.com/news/localgovernment/article940359.ece

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