
March 27th / 29th, 2009
"Dell Too Big For Its Breaches"
This country is in an economic crisis which was caused by sleazy insurance
companies, sleazy mortgage bankers, sleazy brokers, sleazy regulators, and
sleazy politicians. We are understandably angry at all of the above,
especially those of us who have suffered the loss of a job, home, medical insurance,
or savings.
We trusted our federal government to protect us, and it failed us miserably.
Of course it is easy to play the blame game with Washington and Wall Street
because there is a great disconnect between “us and them”. First, there is
the obvious geographical distance, and second, there’s our lack of access to
the processes and people who betrayed us.
So much for the preamble. Now to today’s text.
Perhaps we cannot control what goes on hundreds of miles away, but we damn
well ought to be able and willing to keep an eye on what happens here at home.
Yet time and again, we’ve fallen asleep at the switch in demanding more
accountability and results from our local and area elected officials. We have
allowed our Mayors, councilmen, commissioners, and legislators to throw away
tax dollars on flim flam schemes which they like to call necessary industry
incentives. Skybus was one example, and Dell was another. Both involvements
have proven to be disastrous failures.
While other airports were nurturing their relationships with proven air
carriers, PTI fell prey to Skybus, who promised hundreds of new jobs, and
predicted that their cheap, no frills service would drive the majors to lower their
fares.
Miami airport, for example, supported their major carriers with a mere
$600,000 incentives package, while PTI gave away a whopping $57 million dollars
in perks to one small airline. Rather than follow the Miami example of
rewarding success, PTI put all of its eggs into one discount basket and, in doing
so, made a bigger investment in Skybus than Skybus did. Then, one day,
without any advance notice, Skybus departed Greensboro, leaving hundreds of
passengers stranded, and the promise of high paying jobs unrealized.
Local officials said the Skybus incentives were funded by the airport
authority and not by taxpayers, but who do they think funded the airport authority
in the first place? Those same officials also said we had to make the
Skybus deal or else the sleazy airline would locate in Virginia. That threat
alone should have suggested to us that Skybus did not have the best of
intentions. That’s because Dell had made the same threat several years earlier.
Back then, Dell officials demanded an incentives package worth over $330
million, and gave us a deadline to comply or else. Again, the “or else” was a
threat to locate in the Old Dominion. The implication was that Virginia had
met Dell’s demands, and it was up to us to meet or exceed them, less we lose
hundreds of good jobs. Governor Easley reacted by steamrolling the perk
package over legislators who had less than a day to study the details. Dell and
Mediocre Mike knew that no politician would dare speak in opposition for fear
of being anti-jobs. With lighting speed, our lawmakers approved $270
million dollars in corporate welfare, paving the way for Winston-Salem and Forsyth
County to chip in another $22 million. The total incentive package was worth
$305 million, or, roughly two and a half times the cost of the new plant.
But hold onto your seats. After the deal was consummated, it was disclosed
that Virginia had only offered the computer maker less than $30 million in
perks. So we were duped into topping that offer ten times over. To date,
there has been no proof that any elected official knew of the bid disparity, but
if such proof were to surface, then those officials should do jail time for
misappropriation of state funds. Meanwhile, not so hidden were the terms of
the incentive deal itself.
Unbelievably, the agreement allowed Dell to lay off up to 40% of its local
workforce without forfeiting a penny of the perk money. That’s why, earlier
this month, without fear of retribution, Dell announced a major workforce
reduction at the Forsyth county plant. But to add insult to injury, Dell
refused to release accurate data regarding number of jobs actually cut. Rumors
put the job losses at between 150 and 300, but there’s no way to confirm that.
In a statement to the Winston-Salem Journal, Dell spokesperson David Frink
said, “We are no longer providing specific site employment totals”. Say
what, David?
Does anyone recall that our incentive deal was tied to job creation? That
means our “contract” with Dell is predicated on full disclosure. Instead,
we, the taxpayer investors are now being told to go google ourselves.
Given these latest developments, here’s what needs to happen.
First, local business leader Don Flow needs to have a sit down with his
buddy Michael Dell. It was Flow who lured Dell to the area and set the incentive
deal in motion. Flow needs to tell his friend that stonewalling taxpayers
and the media is not in anyone’s best interest. Michael must release all
employment data and instruct his people to work cooperatively with local officials
in determining if Dell must abdicate some of its perks.
If the diplomatic route fails, then attorneys for the City and County should
go to court and demand access to Dell’s books. If Dell is then shown to
have violated the terms of our incentive deal, then the state Attorney General,
and the aforementioned municipal attorneys should sue Dell for breach of
contract.
We must make an example out of industry pirates who raid local coffers.
Concurrently, Bev Perdue must also make good on a campaign promise she made
during an appearance on my Triad Today television program last year.
If elected, Perdue pledged to lobby the National Governors Association to
put a moratorium on incentives. These perk packages have become nothing but a
cruel shell game in which greedy companies simply shift jobs from one state
to another depending upon who offers them the best deal to relocate.
In the end, our state lawmakers, city councilmen, and county commissioners
made a bad deal with Dell. They didn’t do their homework, and they let
taxpayers be taken advantage of, all of which could have been prevented had they
just called Dell’s bluff, and voted to delay any action until the incentives
deal could be properly vetted, including time for public comment. If nothing
else, our lawmakers should have employed a retail model to the proceedings.
That is, if someone wants you to match or beat a certain price from another
store, the customer must show you in writing that other store’s offer. That
practice alone would have saved the state nearly $300 million dollars on the
Dell deal, and made the current situation a less bitter pill for us to
swallow.
So complain all you want about the mess in Washington, but realize, too,
that we also need to take control of what’s happening in our own backyard.
The first step is to punish every elected official who had anything to do
with the Dell deal, by throwing them out of office at the next election. That
would send a signal to prospective candidates that we lowly voters aren’t
going to take things lying down any longer. We can’t be expected to monitor
every industry who wants to do business here, but we can demand that our elected
officials be wary of any company with one hand outstretched, and the other
hand hidden behind their back with crossed fingers.
I am told that memory is important in a computer, and so it is too with good
government. To paraphrase the philosopher George Santayana, if we fail to
remember the mistakes we made with Dell, we are destined to repeat them.
Politicians count on us having short memories. Let’s disappoint them.
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