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updated 01:12, Wed September 12, 2007

N.C. General Assembly Return to Work on Economic Incentives Compromise

RANDOM NEWS

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RALEIGH, N.C. (AP) -- The General Assembly went back to work Tuesday on legislation expanding economic incentives for large manufacturers -- particularly two tire companies -- by reworking a bill vetoed by Gov. Mike Easley as being fiscally unsound.

A tentative compromise reached Monday night would amend a bill, which Easley vetoed late last month, that was written to target only a Goodyear Tire & Rubber Co. plant in Fayetteville.

The new bill would make it easier for Goodyear rival Bridgestone Firestone to receive cash grants for making improvements at its plant in Wilson. It would also possibly increase the total cost of the grant program from $40 million over 10 years to $60 million, according to the office of House Speaker Joe Hackney.

Hackney said Tuesday morning minor changes were made to the bill to satisfy concerns of Senate Democrats before it was sent to the House Appropriations Committee for review.

Lawmakers returned to Raleigh on Monday so the General Assembly could attempt to override the veto. But instead of taking a vote, lawmakers recessed for several hours and held closed-door negotiations on a compromise. House members and aides to Easley agreed Monday night on the revised legislation.

Goodyear could get more than $24 million and Bridgestone $22 million in incentives over the next 10 years as part of the compromise, Hackney said. But companies would have to maintain average wages that are 40 percent higher than the local average to qualify, and they would lose some of the grants if their overall work forces decline by up to 20 percent.

A Goodyear spokesman at company headquarters in Akron, Ohio, declined comment late Monday, but Senate Majority Leader Tony Rand, D-Cumberland, said Goodyear and Bridgestone officials involved in the negotiations were likely to approve of the final product.

Easley called a second simultaneous session Monday evening so that the alternative legislation could be considered. That left lawmakers the option of overriding the veto if the alternative doesn't pass Tuesday.

The governor said the Goodyear bill would set a dangerous precedent in part by allowing Goodyear to reduce its work force and still qualify for cash grants. The bill was passed by large margins in the final days of the regular legislative session that ended in early August.

Supporters argue the Fayetteville area, already hurting by overseas deployments by Fort Bragg soldiers, would be devastated financially if the Goodyear plant closed, since it employs about 2,750 workers in high-paying jobs. Goodyear has said the incentives are a key component in the company's plans to retool the plant and produce high-grade tires. The company has been offered similar financial assistance for similar renovations in Alabama.

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