RJR seeks a big gain from net loss of jobs.

• Author: Maley, Frank
• Position: Tar Heel Tattler

When Gov. Mike Easley signed the Job Development Investment Grant Program into law last year, his office issued a press release saying the legislation enables the state to compete for "industrial recruitment projects that otherwise would not consider North Carolina." It appears he also sees the program as a way to give incentives to a company that is laying off about twice as many people as it's adding new jobs.

On Sept. 17, Winston-Salem-based R.J. Reynolds Tobacco Holdings Inc. announced that it would lay off about 1,600 here by the end of 2004. Less than six weeks later, RJR announced that it would merge with Louisville, Ky.-based Brown & Williamson Tobacco Corp., consolidate operations in Winston-Salem in 2004--which would likely bring at least 800 jobs--and change its name to Reynolds American Inc.

About half an hour before the second announcement, an RJR executive called Easley and told him that the company needed financial help to make the deal work, says Dan Gerlach, the governor's senior policy adviser for fiscal affairs. Two days later, Easley declared that he would use all the state's industry-recruitment tools, including the Job Development Investment Grant Program, to bring the Reynolds American jobs to North Carolina.

The grant allows companies to get up to 75% of employee withholding taxes from new jobs for up to 12 years. It's awarded by a special...