Louisiana lured Libbey with incentives

10/18/2002

Louisiana and Shreveport outbid Ohio and Toledo with an incentive package for the consolidation of Libbey, Inc.'s, drinking-glass decorating unit that is moving out of Toledo, trimming 100 jobs here.

Libbey, a Toledo tableware company, made it clear the incentives played into the decision, announced last week, to consolidate the operations in Shreveport instead of at its North Toledo plant.

"Economics are always a big part of any business decision," said Kenneth Boerger, Libbey vice president and treasurer.

The local and state incentives offered the nationally known firm could have topped $4.2 million, if Libbey kept its local decorating operations and brought similar work from Shreveport to its hometown factory, preserving 100 jobs and adding 60 more. The jobs pay about $15 an hour.

But Shreveport and Louisiana offered more than $6.8 million in rebates, tax abatements and credits, and cash to consolidate operations - plus keep and add jobs - there.

After Dec. 6, the Shreveport factory will house decorating operations to apply all the enamel logos, stripes, holiday symbols, and other designs on glassware for Libbey. Affected Toledo workers will be considered for jobs there, and some will be offered other posts at the Ash Street factory, which has more than 1,100 employees.

The vast majority of the Shreveport package came from the state, which in the last year has overhauled its economic development efforts and is trying to be competitive with states nationwide, said Adam Knapp, policy analyst for economic development in the Louisiana governor's office.

"This is an example of how that is going to work," he said, adding that Louisiana is one of seven states nationwide that did not have a budget crisis this year.

A highlight of the Louisiana package, he said, is $1.7 million in cash rebates made available through a wage-based program started this year. The wage-based program calls for a 5 percent to 6 percent rebate on new payroll, he said. Libbey also got $2.3 million in property tax abatements in Louisiana, $900,000 in inventory tax credits, and other rebates and cash from state and local entities.

John Loftus, Toledo's assistant chief operating officer, was taken aback by how much more Louisiana offered.

"You can only give away what you've got," he said. "You do the best you can while remaining fiscally responsible."

Ohio is in a budget crisis, and Toledo is struggling, too, Mr. Loftus said. Much of the local package centered around forgiving $1.6 million in property taxes over 10 years and possibly $1.8 million in inventory taxes if a foreign trade zone was created for Libbey, he said.

The company also was offered about $500,000 in cash from government sources, and Ohio offered a job-creation tax credit worth $250,000 over eight years and training money of up to $100,000.

Libbey's Mr. Boerger declined to say how much the incentives played into the company's decision, but said: "We're confident that both parties put forth the best packages that were available."