Governor Roboto Steps In It At NG Announcement

Just got back from the press conference with Wes Bush and Bob McDonnell announcing that Northrop Grumman had selected Virginia to move its corporate HQ to from California.  As you can imagine, the press assembled wanted to know what put Virginia over the top.  Governor McDonnell cited our right to work law, litigation climate and lower taxes.

While the press conference was polite- none of those things were cited by Bush.  He cited the "competitive incentive package" and our "proximity" (presumably to the Pentagon which is on the Virginia side of the river). 

After the press conference I got a chance to chat with Mr. Bush for a minute and asked him to elaborate.  Specifically on the "right to work law" since most of Northrop Grumman's employees are unionized.  Bush said they have a "fantastic" relationship with their unions and that wouldn't be changing, nor was that a reason they selected Virginia.

And Northrop Grumman is incorporated in Delaware, so corporate tax rate wasn't it either.

Unlike some of the blogs on the left, I'm not going to bash Governor McDonnell on this- I'm sure he worked very hard to lobby NG to come to Virginia.

But the Governor Roboto shit needs to stop.  None of the reasons McDonnell cited (other than the incentive package- duh) were also cited by the company as being reasons they moved to Virginia.  Making talking points up from the campaign and attaching them to decisions like this borders on an outright lie. At a minimum the Governor should get the IQ not to union bash with comments about our "right to work" law in a press conference with one of the biggest union employers in Virginia.

Comments

[Brian W. Schoeneman]

Ben, while I agree that the right to work laws made no difference - the 300 jobs coming here are all executive jobs and thus barred from organizing, the low tax rates and the litigation issues are both legitimate, even if the CEO did not mention them specifically.

While NG may be a Delaware corporation (which big corporation isn't?) the lower property taxes, foreign corporate income taxes, and other taxes that they will pay will be significantly less than if they had moved to Maryland or the District.

And the litigation climate is also helpful, as they'll be considered a Virginia domiciliary (as their principle place of business is here) and can use that to their advantage, particularly in federal court.

They aren't outright lies. McDonnell is being asked to speculate as to why he thinks NG decided to come. So he did. If he's wrong, then he's wrong. But it's not a lie.

[Not Larry Sabato]

Brian- he was on stage with the CEO. There's no reason why he should be citing ANY different reasons than the company cited unless he was either a) lying or b) trying to take political advantage. Either way- really poor behavior by the Governor on a day he should have been shining.

[Bob's 4 Slavery, Not Jobs]

NLS, what do you expect from a racist that was confused about why slavery was important in Confederate History Month?

[Frank O.]

Brian Schoneman, why would foreign tax rates be lower between Maryland and Virginia?

[Not Paul Blart]

It doesn't matter whether they are incorporated in Delaware or the North Pole. They still pay corporate taxes in Virginia because they have employees and facilities here. I can guarantee you taxes were a BIG part of this equation, because I'm hearing Maryland matched Virginia dollar for dollar on incentives.

I will agree with you that right to work and litigation climate probably didn't factor much into this particular HQ relocation decision. However, right to work is a BIG deal for companies, even companies with unionized workforces.

[Not Hussein]

I wouldn't be surprised if the litigation climate was a factor. California is one of the friendliest states to plaintiffs, and Northrup is likely pleased to lack the nexus with California that would have allowed a plaintiff to bring a case there.

[Not Paul Blart]

Oh come on guys....didn't you ever read International Shoe? A national company like Northrop Grumman can be sued practically anywhere it does business.

[I Understand This]

The primary number in revenue to the state the Governor is citing is the money Virginia gets in the personal income tax. But if NGC went to Maryland, we'd still get 30% of the employees who lived in VA and that revenue. Instead we get 70%, Maryland and DC get a free boost with no incentives and some new income tax revenue and we pay the bill. Bad deal by the Governor, these incentives should go to jobs in areas where a greater percentage of the workforce will live in Virginia. The DC area is too transit oriented, and too much of the workforces don't care which state they work in vs. live in.

[Brian W. Schoeneman]

Frank, because "foreign" can mean "out of state," not just outside the country, when you're talking corporations.

[James Young]

Of course, Ben, reference to Right to Work laws is not "union-bashing." In fact, they have nothing to do with whether a workforce is represented by a union. I don't know if it was a significant factor for Northrup Grumman in this instance --- I'm inclined to agree that it was not --- but neither is the significance it DOES have as you caricature it.

All that Virginia's Right to Work law does is preserve --- and in the case of Northrup Grumman employees moving to Virignia, restore --- the choice of individuals as to whether to support the union, or not.

How preserving/restoring the choice of an individual as to whether to support a union is "bashing" is a mystery to me ... unless you harbor the fear the employees with an actual, economically-significant choice as to whether to pay money to the union will vote with their feet. Would that be it?

[Brian W. Schoeneman]

Not Paul Blart, it's a choice of law question, not a jurisdiction question.

[Not Larry Sabato]

James, I think mentioning them when they were not part of the decision is at least implied union-bashing. But I'm glad you agree that they didn't really play a part in this move.

[Not Hussein]

NPB, while Northrup could conceivably be sued in any state it does business, it is much easier to establish jurisdiction in a state where the company is headquartered, unless the desired venue is where the alleged incidents occurred.

[Steve Vaughan]

Ben, your Roboto line was right on here, athough I don't want to be as hard on McD as you do about it.
"Right to work law" is ingrained in ever Republicans head as the reason that business are attracted here.
Bobby Mac just spat out his talking point, without stopping to think that he was talking about a union company.
But good on him for bringing in a unionized employer. We need more of those in Virginia.

[Not The Prince of Darkness]

"But the Governor Roboto shit needs to stop.... Making talking points up from the campaign and attaching them to decisions like this borders on an outright lie."

Wow, it is amazing how you progressives (ie liberals) give Obama a pass when he does the same shit on any number of issues.

[James Young]

Yeah! Talking points must stop!

Because it's not like Democrats ever use them....

[HisRoc]

As a former senior manager in a Northrop Grumman division here in Fairfax County, allow me to enlighten the readers on this thread and shoot down some of the bullshit from Steve Vaughan and others.

First, Northrop Grumman is not "a union company." Of the five business sectors in the corporation, only two have collective bargaining units: Shipbuilding Sector, which is made up of the former Newport News Shipyards here in Virginia and Ingalls Shipyard in Mississippi, and a few units in the Aerospace Sector, primarily production line workers in the original Northrop Aircraft Company in California. The rest of the corporation is non-union. That includes all of Electronic Systems Sector, formerly Westinghouse Defense, all of Information Systems Sector, formerly Litton-PRC and TRW, and Technical Services Sector, formerly a number of companies including Vinnell Corporation.

Is the fact that Virgina is a RTW state important? You bet. Union organizers depend, in part, on political pressure being exerted on corporate headquarters and their officers. Locating the corporate headquarters in a RTW state lessens that leverage. Was the CEO going to admit that to a liberal blogger? Not a chance. And, yes, Ben. Wes Bush knew exactly who you were if you were able to speak with him. The PR shop is that good. In addition to the in-house spin meisters, NG has the legendary communications titan McCann Erickson on retainer to provide messaging strategies as well as managing all publicity campaigns. Nothing goes into the media concerning NG without McCann Erickson involvement. There is an old saying in the Army, "there is no such thing as a casual conversation with a general officer." The Northrop Grumman Corollary is "there is no such thing as a casual media encounter."

Second, the decision to move to Virginia was preordained. NG used Maryland and DC as stalking horses to sweeten the deal from Virginia. I can assure you that the El Segundo executives had no intention of moving to the Peoples' Republic of Merryland, with its millionaire income tax surcharge, or to the District of Crime, with its Third World school system, exorbitant real estate prices, and incompetent government services. If they wanted any of that, they could have just stayed in East Los Angeles.

Four Fortune 100 companies have now decided to relocate to Virginia from California. Three came under the Kaine Administration and now one during the McDonnell Administration. Trying to make something out of the Northrop Grumman move that somehow criticizes McDonnell is a stretch at best and is intellectually dishonest at worst.

[Lloyd the Idiot]

Good post, HisRoc. Whether you want to give McDonnell the credit or not, VA definitely has CA, MD and DC beat hands down as a good place to do business. And that's only because the Democrats haven't been able to screw it up (yet).

[Not Larry Sabato]

HisRoc- that's an excellent point on the IT side of things. I'm not sure that's unionized in any company (what union would that be if it was?).

By the statistics cited today on NG's employment in VA, and where they are, about 65-70% of NG's Virginia employees are unionized.

[Notfornothing]

Four Fortune 100 companies have now decided to relocate to Virginia from California. Three came under the Kaine Administration and now one during the McDonnell Administration. Trying to make something out of the Northrop Grumman move that somehow criticizes McDonnell is a stretch at best and is intellectually dishonest at worst.

Posted by: HisRoc | April 27, 2010 at 10:07 PM

NEWSFLASH - it ain't got nothing to do with VA - it got everything to do with Corporate welfare - sucking off the "tete" of the Federal Government.

If it wasn't for sickening level of defense spending by the Feds there would be no NG. So all you tea baggers that work for contractors to the Government - all you anti tax people - please please rail against corporate welfare in the defense department as bill maher says - until then - just shut up.

[HisRoc]

Ben,

The NG employees in Virginia who are in a collective bargaining unit are concentrated in Newport News Shipyards. The remainder of the Virginia employees are not unionized.

Unionization of IT employees is a hot-button issue in the industry. They are the hybrid workers in our economy, part white collar and part blue collar. The subject deserves its own thread, to include the use of H1B visas to prevent organization.

[bubba]

Economic development in Virginia has been traditionally non-partisan.

I think McDonnell is a competant manager who let the pros at VEDP manage this process and then did what all good CEO's do at the end of the day - seal the deal by not screwing it up.

Virginia is known for being a very strong competitor for economic development initiatives. This is proof that Virginia remains strong even in tough budget times. Huge kudos to McDonnell and his team for nailing this deal and seeing that it was maintained and on track through a gubernatorial transition.

Now, if you want to have real fun, would someone please find out how much Fairfax County put up in incentives for this deal? Remember, all state funds have to be matched by the locality.

[Not Larry Sabato]

Bubba- Fairfax hasn't won it yet. It's down to Arlington or Fairfax- and I've heard Arlington (Ballston) is the favorite.

[Stonewall Brigade]

Does it really matter why NG came to Va.? They are here and that is all that people care about. MD and DC lost case closed.

[HisRoc]

Ben,

Ballston is possible, but I predict that it will be Rosslyn. Their Washington Operations office is already there and the Potomac River views into the District will be compelling.

Alternately, they might go for Fairview in Fairfax County, but I would be very surprised if they did.

[Not Larry Sabato]

I don't think there is a Rosslyn finalist location unless they are keeping it very secret. There are three, and none here. I live in Rosslyn- and was also surprised that they weren't just going to take over 1000 Wilson- especially with the views here.

[bubba]

This is precisely the reason McDonnell won. The voters saw him as a "low ego, high output" guy who would comfortably sit in the offices of Fortune 500 companies and make the Virginia pitch. And this is why the confederate deal was such a surprising misstep - and why I have to give props to the Governor for taking quick responsibility for the misstep and cleaning it up.

Score a big one for Bob and the state. This was not a deal where we needed a George Allen or Creigh Deeds messing around with "aw, shucks, I'm just a country boy. wanna see my gun collection?" game.

he may be a robot, but he's our robot when pitching Virginia for new jobs and new private sector investments. i like robots in that case - they don't go off-script.

now if we can just get the governor to drop his push for off-shore drilling.

[Gretchen Laskas]

I think most people knew that Virginia was always the likeliest location, at least in part because Boeing, one of NG biggest rivals, is already located in Bethesda Maryland.

Keep your friends close and your enemies closer-- but a river between you works well, as Maryland and Virginia have always know!

[Someone who reads]

Boeing corporate headquarters is in Chicago.

Boeing has some operations in MD but so does Northrup-Grumman.

I am now trying to figure out the enemies and rivers thing.

[Gretchen Laskas]

(grin) there is a reason there are only something like seven bridges across the Potomac and we can't seem to agree on building any more!

The aerospace/defense industry is taking a beating economically right now. Given how much of their business us based with the government, it makes some sense for their bigwigs to be here. Also, as we move into an ever increasing global economy, having access to embassies, ambassadors, and international trade representatives from around the world matters too.

I will point out that I'm sure one factor in Virginia (and Maryland's) favor are our gold plated public school systems. Corporate folk at this level expect the very best for their children and families.

[HisRoc]

Gretchen,

Actually, the Defense industry is doing quite well right now. I have had over a dozen job openings come across my email so far this week, most of them with six-figure comp packages. (I'm a management consultant, so all the head hunters send their leads to me hoping I'll turn up candidates among my client companies.)

Traditionally, when the economy goes south Federal business gets better, regardless of whether the Democrats or Republicans are in charge. This is why the greater Washington area is recession-proof.

[change]

Hisroc,
You really should stop with the logical fact based analysis; it leaves those who disagree looking a bit silly. (I don’t mean you Gretch).

Gretch,
First, we should have two more crossings on the river (if only for security reasons).
Second, I can assure you that those corp. folk can afford to send their kids to private schools.

[southsidedemocrat]

Let's remember that Kaine blew the chance to get Apple to put their data center in rural Virginia. He didn't "close the deal" and McDonnell did. He deserves credit.

[Gretchen Laskas]

Change -- I know they can afford to send their kids to private school. That doesn't mean they do so! (For instance, we don't....)

HisRoc -- I do think things are easing up. My husband was able to hire two people this week.

[bubba]

Apple to southside was a bad deal and it's a positive that Virginia lost that one to NC. The incentive package for Apple provided by NC was, and is, unsustainable and a negative drag on their economy. And think, they still haven't balanced their incentive account since Dell went bye-bye.

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