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North Carolina's Google Gambit: The Rest Of The Story


Your article ("The high cost of wooing Google," Government, July 23) shows in great detail how cities across the U.S., such as Lenoir, N.C., have sold their souls to prospering new millennium titans like Google (GOOG) et al in order to rebuild their industrial bases and economies shattered by globalization. Here in North Carolina the demise of the textile and apparel industries has left behind a wicked trail of shuttered plants and shattered dreams, causing the state to have one of the highest rates of unemployment in the nation.

Jim Lee III, CEBS

Association Underwriting

Charlotte, N.C.

My community is thrilled to have Google as a neighbor and partner. But we're disappointed that, in your story, North Carolina politician Robert Orr chose to dismiss our business win as Google "just exploiting a desperate town."

Desperation isn't what drives us. Good old American ambition drives us: the ambition to be part of the new economy and not a has-been. Isn't it interesting that businesses, nations, and big cities earn applause for modernizing their economic models, but when small communities do the same, outsiders look down on our efforts?

We're working hard and smart to get ahead. We're proud of our success and of the Google project, which has already brought too many benefits to list here. We just wish BusinessWeek had found space to fully describe these benefits and allow readers the chance to make an objective assessment of the deal and our community.

Faye Higgins, Chairperson

Caldwell County Board of Commissioners

Lenoir, N.C.

As someone on the front lines of bringing new business to North Carolina, I found your story interesting but one-sided. As gripping as the narrative is, it barely touches on important information. For example, most of the incentives involved are performance-based. If Google doesn't perform, it doesn't receive a benefit. No one is handing Google a big check.

It's sensationalistic to speculatively assign a dollar value to each job at Google's data center, but if you're going to do that, you should also note that the average salary per job will be about $20,000 higher than what most people make in Caldwell County. And instead of using the fact that Google has just made its first hire to end the story on a theatrical note, why not report that 240 people are now working at the construction site, that an abandoned shopping center is being redeveloped expressly because of Google's presence, or that any number of other economic indicators have brightened since the project's announcement?

Sure, get the story. But get the whole story. In this case, Google is good business for Lenoir and North Carolina.

Donny Hicks

President, North Carolina

Economic Developers Assn.

Gastonia, N.C.

Lenoir's million-dollar jobs are testimony to the bankruptcy of the mainstay of conventional economic development. Eighty-six percent of the state and county incentives were tax cuts, the government equivalent of what Sergio Zyman calls "the laziest marketing tactic in the world: price reductions." Communities seeking jobs should instead invest in more skillful marketing of what they offer business and in building value to make their product more marketable. In business, price cutting is a desperate last resort after marketing has failed. In government economic development agencies, it is the dominant strategy. Why didn't Lenoir proactively go after multiple companies instead of waiting to be found by Google and giving them the overwhelming advantage in negotiating a deal?

John L. Gann, Jr.

President, Gann Associates

Glen Ellyn, Ill.

Demeaning and inaccurate—those are the kindest words to describe the representation of the city of Lenoir and Caldwell County. As one of the people interviewed, I was stunned to see our community falsely portrayed as willing to do anything to land the deal. On several occasions, we made it clear we were prepared to walk away. In each case, our negotiations with Google led to a beneficial outcome. We acted not out of desperation but on careful analysis.

The Google deal is sound.

W. Lane Bailey

City Manager

Lenoir, N.C.

The focus of this article ("Talk isn't so cheap on a phone card," Investigations, July 23) is on prepaid cards used mostly by immigrants for calls outside the U.S. The problem is much more extensive. My AT&T card from Sam's Club still gives me one minute of talk time for one minute of card time for calls placed outside of Texas. Calls within Texas, however, cost five minutes of card time for every minute of talk time.

Arnold Barkman

Fort Worth

I have no sympathy for Richard Kuskin or Foreign Tire Sales ("An importer's worst nightmare," Special Report, July 23). For too many products, it has become a hot business to be a middleman importing cheap stuff from China. U.S. manufacturing companies who pay decent wages and have regulations to comply with get hurt or put out of business. I don't suggest Kuskin hold his breath waiting for the Chinese company to foot the liability costs. I suspect that it will become hard to find, and the communist government will not be very cooperative.

Peter Rebar

Cleveland

I disagree with your conclusion regarding possible job cuts in pursuit of enhancing BP's efficiency ("Refilling BP's Tank," Global Business, July 23). Benchmarking BP's stats on revenue, production, and proved reserves per person against those for its rivals (ExxonMobil (XOM) and Shell (RDS)), I found that BP performs in line with or better than the average, surpassing Shell on every metric except for revenue per person.

During a term project at business school, I found that the primary problem was rooted in the firm's impaired execution skills. BP's ability to execute the projects and deliver hydrocarbons to the market still lacks perfection. Examples of failed execution include delays in starting Thunder Horse platform, and an explosion at a Houston refinery facility. This addresses BP's lower valuation vs. ExxonMobil. With less than sure access to new reserves as well as inflated costs, it is going to be more difficult for BP to maintain margins on its upstream business.

Farid Dadashev

New York

Fifty years ago, I got a new ivory VW Cabriolet in London ("Can VW finally find its way in America?," News & Insights, July 23). I drove it for two years in Europe and then brought it back to the U.S., only replacing it in 1962 after covering over 200,000 miles.

In 2001, I bought the top-of-the-line 1.8 Turbo GLX Beetle. Hot car. Started to lose its clutch at 8,000 miles. Since then it has been a downhill disaster, with electrical problems and several clutches in 124,000 miles. At about 90,000 miles the engine sludged up, and it cost nearly $1,500 to set it right.

At the New York Auto Show in 2006, I confronted a VW corporate manager with my litany of complaints. He said: "There is nothing you can tell me that I haven't heard 100 times before. I think they are better now." Maybe, but you won't get another chance with me. I run a company that helps people improve their customers' experience. I use VW as a case study of how not to do it.

William Plumb

Fellow, Industria

Designers Society of America

Piermont, N.Y.


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