Previously I wrote about “Buying American”. Now it’s become more personal or local. Recent news articles reference the rumor (which is most probably true) that IBM Corporation is planning to sell off its Personal Computer Division. This is being done in hopes of relieving the company of a portion of the business where profits are slim and growth seems limited. “Big Blue” it seems, has decided to yield a business it created to a foreign company. Slowly but surely IBM has been weaning itself from hardware related businesses and focusing more on consulting services, support and software.
http://www.usatoday.com/money/industries/technology/2004-12-03-ibm-pc-sale-report_x.htm
Also worthy of note is the recent special session of the North Carolina General Assembly where tax incentives were passed to induce Dell Corporation to move manufacturing facilities into parts of North Carolina. For Dell to be eligible to receive the tax credit, they have to create at least 1,200 jobs over 5 years.
http://www.ncga.state.nc.us/html03E3/bills/AllVersions/Senate/S2vc.html
Much has been said about the trade deficit, unemployment and outsourcing. More than 13,000 IBM employees are affected in the Research Triangle Park area by the IBM sale of the PC Division. If a large portion of these jobs are moved to another nation like China (or another state), it would seem that the North Carolina General Assembly might be behind the curve on silencing that “loud sucking sound”. The additional jobs and tax revenues they hoped to stimulate by luring one company (and not others) into the State (or taking better care of the ones that are already here) will end up being "too little, too late" for many residents.
I am no rocket scientist but 1200 new jobs (at Dell), which are most likely to be lower income manufacturing work (and more vulnerable to being outsourced long term) versus a still unknown (but larger) number of outbound jobs (IBM, skilled professionals) means that North Carolina is bleeding jobs. This will result in lower overall tax revenues and an increased burden on public services, while displaced North Carolinians seek new employment.
This news doesn’t mean that our legislators “sunk” the IBM PC business with one bill, or that Dell was special. But that point deserves some more or "special" consideration. Really now, is Dell all that “special”? Is the corporate tax structure here conducive to business or to employers (large and small)? If the General Assembly found it necessary to offer incentives to Dell (for fewer and less skilled jobs), isn’t this an admission that the tax structure in our state deserves some reform (or new standards?) that would benefit other employers (and stimulate growth) so that the job exodus might be slowed? It is reasonable to expect that if North Carolina ends up un-employing or under-employing more skilled workers in the long term or flushing well established companies out of state, that our quality of life will NOT be improving.
None of this is really new news; the rumors about an impending sale have been circulated or promoted by analysts, for some time now. IBM may actually be following through on it this time. Pillowtex was another victim of economics that was broken up and shipped to China, Pakistan and India. And before Pillowtex there were others…
http://www.charlotte.com/mld/observer/6476319.htm
The warning signs are not new. North Carolinians need to be encouraged to invest in their state or national economies first. Their hard earned dollars and jobs are exiting the state and the nation at an alarming rate.
http://www.bea.doc.gov/bea/newsrel/tradnewsrelease.htm
On a more constructive note, why can't North Carolinians (or Americans) be encouraged to purchase locally produced goods? If they don’t know or can’t distinguish between local products and everyone else’s, you really can’t blame them if they don’t always associate a higher value with locally produced items. Shouldn't the North Carolina General Assembly sponsor a bill or program that would encourage local manufacturers to label high dollar items with a seal (a Dogwood Flower?), so that North Carolinians would understand and value these purchases more than similar goods that come from out of state (or other nations)?
What we need in North Carolina is a “Dogwood Campaign”…
