By Logan Jones-Wilkins
(CNS) – With the General Assembly in an election year, and Gov. Glenn Youngkin buttressing his resume before an expected tilt at the presidency, the debate over the prospective Ford factory in Southside Virginia has raised questions about his priorities between his vision of Virginia and competition with potential Republican rivals.
“The question has been at what point would the governor put the interests and needs of the national Republican base over the needs and interests of Virginia, or if it would matter or not,” Dr. Richard Meagher, a professor of political science at Randolph Macon College, said. “But now, especially with the Ford factory issue, it seems like it will matter and that he is considering national politics first.”
Specifically, the Ford factory dispute was over an agreement for Ford to build a factory at the Southside Virginia Megasite near Danville, Virginia. Ford was in negotiations between sites in Michigan and Virginia, according to Bloomberg, and the Chinese company Contemporary Amperex Technology Co. Ltd. would be the main technological driver behind the proposed car battery factory.
Youngkin’s decision to cancel the contract, a contract that Ford said in a statement to the Richmond Times-Dispatch was going to be an agreement between itself and the respective entities in Virginia, was motivated out of the belief that the multi-billion dollar plant was going to the Chinese Communist Party through CATL’s position as the main operator within the proposed factory.
From Meagher, who focuses his research on local government and Virginia state politics, that was a distinct tact from the governor toward a national agenda and away from a state perspective.
“This is a region that has an economy that has been hit and is starving for new investments,” Meagher said of the Southside Virginia Megasite. “It is like a small market trying to attract a star player. In order to get that star player to come, you might have to pay a little more.”
The proposed factory, regardless of whether Ford or CATL owned and operated the plant, would be a massive boon to the regional economy of Southside Virginia. The estimates of economic stimulus range from three to four billion dollars, and it has been reported that the plan would have included 2,500 jobs to the Pittsylvania County area. It would be the culmination of 15 years of public and private fundraising and land management that has gone into making the Southside an attractive place for massive industry.
“There is nothing of this scale in development in Virginia at this time,” Matthew Rowe, economic director of Pittsylvania County, said. “I know there are lots of other communities in the state that are hoping to get into the megasite game, but it’s a challenge.”
Rowe, and other officials for the city of Danville, county of Pittsylvania and Southern Virginia Alliance, were unable to speak about any past, present or future negotiations involving tenets at the Southside Virginia Mega Site. What officials were able to provide was background on what went into the site and the role local officials had in coordinating possible business partners, potential infrastructure at the site, and the general distribution of investments that go into a $200 million dollar site.
“Our long term goal and strategy has been to bring in a transformative project for the region,” Rowe said. “That means a substantial investment that creates a substantial number of jobs with wages significantly above the region’s average. We are looking for the type of industry that raises the socio-economic status of not just those direct employees, but of the general population of the area.”
Meagher has a slightly more skeptical impression of the possible impact of the site.
“Companies will pit localities against each other,” Meagher said. They will smartly play both sides against each other. The key for the localities is to offer enough incentives to the company without giving away the store.” I’ve seen data that localities will give away more incentives than they need to and the company would have been there anyways. So they’ll end up overpromising by 25-50% what the actual return on investment would be.”
The first deal is critical because it is fundamental in the deals that can come next.
“As we have more success in the recruitment process, more investment partners on the private side want to be involved,” Rowe said. “They can see that there is a realistic expectation of substantial returns on investments. Especially with the industry partners that are here like utility companies and rail companies.”
Rowe also described the importance of the state investments in the surrounding infrastructure and “various initiatives.” Nevertheless, working with the state is a two way street – investments and leverage are key aspects of state involvement, but so too are separate priorities and operations.
“My guess is the governor had a chunk of state funding available for the project and he simply said no,” Meagher said when asked what part of the process Youngkin had de facto veto power over. “I imagine that this was a bit of a surprise and that the local economic development authority was negotiating under the assumption of state approval. Then, at whatever point they went to the state when it was time to approve the funding, the governor’s offer said no.”
While Rowe was unable to discuss recent negotiations, when he spoke generally about working with the state,
“We review projects but we rely heavily on our state partners to do their due diligence and to consider the proposal and the state’s interests,” Rowe said. “While we consult with our local partners and consider the proposal for our communities interest and then the incentive package comes out of that. It’s really a two track system.”
Within the larger scheme of Virginia politics, Youngkin’s gamble in appealing to a national, anti-China stance over more local, community driven conservatism raises questions over the success of his future policy initiatives.
”It will also probably mute some Republican support because it’s hard to be a full-throated supporter of your governor if you feel he is kneecapping basic economic development in your region,” Meagher said.“Politics is about storytelling and the governor had this compelling case about being the business guy. But now he has this story floating around where it seems he killed a big business deal for no economic reason.”
