Deciphering a $2M aid package to Volvo
Yesterday's visit by state Department of Community and Economic Development Secretary C. Alan Walker to Volvo Construction Equipment's Shippensburg factory and offices in Franklin County was anything but a quiet glad-handing photo opportunity.
Buried in the DCED press release was the announcement that Gov. Tom Corbett's administration was offering a $2 million economic development package to Volvo to aid in the expansion of its facilities and workforce. By 2015, Volvo is expected to employ more than 1,100 people at the factory, according to DCED and the company.
Here's the breakdown of the package:
• $1 million Pennsylvania First Grant.
• $900,000 in Job Creation Tax Credits.
• $100,000 from the Guaranteed Free Training program.
Volvo's commitment is to create 300 jobs by 2015 and retain 829 jobs, according to both DCED and the company. But I warn you, the consistency in the stories diverges there.
My initial question was: Why is DCED giving Volvo this money now after the project is done? But I jumped the gun a bit there. The project isn't yet complete. It includes construction of a customer demonstration center — a place to showcase equipment abilities — that Volvo will build this year on 80 acres near the factory.
As I checked the facts, it became difficult to get a straight answer from DCED about the aid package, what expansion it was for and then even whether the package had already been announced.
For example, Volvo yesterday was cutting the ribbon on its new office building housing the more than 200 jobs it brought from North Carolina. The $100 million project announced in March 2011 included expanded production lines to make new equipment and the demonstration center. The move and expansion is expected to be good for the local economy.
The press release says the aid package was for a $40 million expansion, yet no one at DCED could say for certain what expansion that money references, other than three spokespeople insisting I was confusing things with the 2009 physical plant expansion.
That expansion was projected to cost $30 million, added 200,000 square feet to the factory and Volvo committing to increase its workforce as part of the agreement with Gov. Ed Rendell's administration for a $1 million Opportunity Grant.
Volvo added 309 jobs to the 520 it had at the time, and the project cost was $45 million, DCED spokeswoman Theresa Elliot said.
The latest agreement between Volvo, DCED and the Governor's Action Team was offered in March of last year, she said. The company signed a letter of commitment soon afterward (she didn't have the letter on hand) and committed to adding 300 more jobs in May. The $2 million agreement was announced last year, she said.
When I asked for the announcement to be emailed to the Business Journal, Elliot said DCED did not issue a release last year, but Volvo did. The emailed document was a copy of a news story from the Herald Mail newspaper in Hagerstown, Md., about the ground-breaking ceremony in May for the new offices that Volvo opened yesterday. It makes no mention of the $2 million economic development package.
So I called Volvo to double check some things, because my head was spinning from all the inconsistencies. The company never released an announcement of the aid package after solidifying its agreement with the state because the state wanted to coordinate it, Volvo spokeswoman Meg Dameron said.
When the state said Secretary Walker would be visiting at the ribbon-cutting yesterday, Volvo figured the timing was perfect anyway, Dameron said. But the state buried the aid package announcement, had a recall on its first press release, initially told me the aid package was new and then said it was nearly a year old.
All of this happened in a span of three hours.
The upside to this saga? Volvo is creating jobs: 975 people work there today, already 146 jobs toward its commitment with the state, Dameron said.
And it fully expects to add more, she said.
Jim T. Ryan covers Cumberland County, manufacturing, transportation and workforce issues. Have a tip or question for him? Email him at email@example.com. You can also follow him on Twitter, @JimTRyanCPBJ.