In some of the biggest news that Prince George County, Virginia, has seen in quite some time, Governor Tim Kaine announced on Tuesday that Rolls-Royce PLC has chosen to locate their new plant 25 miles south of Richmond City. The facility will test and assemble engines for mid-size business jets, and will have the capacity "to produce components for the F136, an advanced fighter engine for the Department of Defense’s Joint Strike Fighter." (from "Turbine-Maker Rolls-Royce to open plant in Virginia" in The Beaufort Gazette)
Rolls-Royce PLC will employ 170 people when the plant opens in 2009, and may employ up to 500 with potential expansions. The company has purchased 1,000 acres in the county, but the actual size of the facilities have yet to be determined.
Virginia won out over 7 other states that were under consideration for the plant site, and the state schools were cited emphatically as a driving factor behind the decision. That’s a great endorsement not only for the economic environment in Virginia, but obviously a win for the schools as well.
A point of contention among some (see comments at the bottom of this RTD article) is the monetary incentive that the state of Virginia has promised to Rolls-Royce PLC to get their commitment to our area. The cash value of all of the related incentives is $56.8M. Of course, with a price-tag like that there is going to be some second-guessing on how appropriately it was handled.
One of the comments on the article suggested that the money would be better spent for incubating local businesses, rather than courting a large corporation. Given my slant towards small, independent businesses, I was inclined to agree — at first.
At first glance, an investment of that magnitude could make a huge impact on many local businesses by itself, and here we are throwing it away on a large corporation that already has more money than they know how to handle. On the other hand, the local presence of a world-class company will bring not only recognition to Virginia, but also business opportunities (large AND small) and increased educational opportunities (through interaction with the state schools).
Now, I have to agree that this should not become a habit, but sometimes it makes sense to pony up the incentives to bring an international company here.
In this case, I think it makes perfect sense. Good job, Virginia!