Corporate Welfare: Luring Drugmakers
Make a commentBy Ed Silverman // June 5th, 2007 // 7:21 am
This is, admittedly, an old argument. Do tax breaks, grants and the like do a good job of luring business to a state, city or town? The reality, of course, is that if one local government doesn’t offer something, another will. Besides, there are jobs that are supposed to be created.
Nonetheless, a few drugmakers have again taken advantage of the psychology and, in recent days, these deals were either announced or finalized:
- Novartis will construct a facility to manufacture flu vaccine in Holly Springs, North Carolina, which last year committed nearly $21 million to provide road, water and other improvement suitable to the drugmaker, an act that one local official quickly admitted would cause the town to be ‘overextended.’ Never fear: help is coming from nonprofits, the state government and the federal government. The upshot - 350 new jobs.
- Merck will invest $193 million to expand its Elkton, Virginia, plant that makes meds and vaccines. The announcement comes just six months after Merck disclosed a $57 million expansion. The 66-year-old facility employs more than 700 people with a $60 million annual payroll. The state is providing a $1.5 million performance-based grant. Number of new jobs - 70.
- Keata Pharma, a division of Ontario’s PharmEng International, a consulting and contract manufacturing company, is nearing completion of manufacturing plant in Cape Breton, Nova Scotia. Local Canadian officials are offering $6.25 million in repayable loans and a $3.6 million payroll rebate to be paid over five years. New jobs - between 65 and 75.