Current Issue

Editorial: Don't overlook the impact of smaller projects

Comments Email

States always have been willing to get into bidding wars to lure new manufacturing factories that can bring in thousands of jobs, along with the ripple effects that those projects bring. Whenever an auto firm floats the possibility of putting up a greenfield assembly plant, incentive packages can run into the hundreds of millions of dollars.

In the tire industry's version of these high stake sweepstakes, South Carolina has been the most visible player. The state previously has landed new tire plant projects from Continental, Michelin and Bridgestone, along with several other major expansions.

Now it will pony up an undetermined amount of incentives to welcome Trelleborg Wheel Systems' first farm tire production facility in the U.S. It did have an advantage, as the Swedish firm will base the factory around a site it already operated in Spartanburg, S.C. The project to restructure and expand the plant to make ag tires brings in a $50 million investment and the potential for 150 jobs—smaller than the state's other tire projects but still substantial nonetheless.

But while these larger wins bring bigger headlines, other states—especially those where manufacturing is a vital part of the economy—would do well to follow the lead of Indiana in targeting smaller projects as well. These additions, often overshadowed, can help to build a state's economic base.

Indiana lured two German rubber product firms to set up factories in the state. Combined, the plants to be set up by Norres North America Inc. and Jaeger-Unitek Sealing Solutions Inc. promise fewer than 100 jobs, not a lot in relative terms compared with some bigger-ticket projects.

But if states string enough of those together—Indiana says that foreign corporations started some 110 businesses in the state—the job numbers begin to add up. And if those operations were to expand, the work forces can grow exponentially.

The tax credits offered by the state to the two German companies amount to less than $1 million, and the firms don't collect until they deliver the jobs. That's the kind of low-risk investment that can pay off big for a state in the long run.