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How S.C. beat N.C. for Continental Tire plant

Oct. 6 was a great day in South Carolina, as Continental Tire said it would build a $500 million plant in Sumter County creating 1,600 jobs. That deal came, in part, because of a few lousy days in North Carolina.

As the decision came down to the wire in late September, Gov. Nikki Haley and Palmetto State recruiters held out a $31 million infrastructure grant, aimed at attracting the international tire maker. Meanwhile, Republican lawmakers in the Tarheel State were butting heads with Democratic Gov. Beverly Perdue over that state's offer of $45 million in up-front cash to lure Continental and sharpening their partisan knives for a potential scandal involving that state's site-selection process.

South Carolina's advantage was that its $31 million could be authorized by a council of 11 agency heads, chaired by Commerce secretary Bobby Hitt. Meanwhile, North Carolina's $45 million offer had to be approved by its General Assembly.

In North Carolina, squabbling Republican and Democratic lawmakers "decided to use all that as a wedge issue," Tim Pearson, Haley's chief of staff, said last week. "It was a circular firing squad."

As September turned to October, S.C. officials held their breath as newspaper stories about "Project Soccer," as the plant was referred to, popped up north and south of the border, saying both Carolinas and Louisiana were finalists for the prized factory.

"Things got shaky," Haley said in an exclusive interview with The State about the deal. "But what we didn't do was panic. We didn't react. We sat back and strategically reminded (Continental) what we were about. ... We were the most stable place to go."

Added Hitt: "Incentives are like the (engagement) ring on the finger. But the cost of doing business is what drives a project. Other states may offer more (cash, as North Carolina did). But companies go where they are going to make the most money.

"And that's South Carolina."

The Continental announcement was the second big score for the Haley administration and Hitt.

Just weeks earlier, on Sept. 22, Bridgestone announced it would spend $1.2 billion to expand its operations in Aiken County.

The deals are significant in a state with an 11.1 percent unemployment rate.

They also boosted Haley's image as a job creator. The Tea-Party-leaning Lexington Republican had raised hackles in her home county earlier this year by opposing tax breaks sought by Amazon.com to build a 2,000-employee distribution center there. Haley's opposition set off a major showdown in the GOP-controlled General Assembly, which approved the deal.

Haley says there is a clear difference between the incentives offered Amazon and Continental.

"I don't hand over checks to these companies," she said. "But I can't not give (grants for) infrastructure. That's a function of government.

"There's a difference between incentives for infrastructure and ... picking winners and losers ... (companies) asking for special rights to things. When you tell Amazon that they don't have to charge sales tax and the book store and technology store down the street have to keep charging it, you have just created an unfair competitive environment."

A third company, Michelin, has been operating in South Carolina for more than three decades.

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