Dell told to repay millions in state aid

October 12, 2009 // 10:10 a.m.

Tags: #dell #dell-plant-closure #dell-repay #dell-state-aid #forsyth-county #forsyth-county-plant #north-carolina

Dell has found itself faced with the prospect of paying back millions of dollars worth of monetary aid and tax concessions after it closed a plant which was part of a government-backed project.

As reported over on Fudzilla, the box-shifter faces paying back up to $318 million (£201 million) it was offered as an incentive to open a plant in Forsyth County, North Carolina after opting to close its doors.

North Carolina Governor Beverly Perdue believes that Dell's decision to close the plant - without, she claims, meeting its obligations under job and investment performance standards written up as part of the deal - broke the terms of the deal the company had agreed with the state legislature, and is seeking to force the company to repay "every red cent" that it received in both cash handouts and tax concessions.

The closure of the manufacturing plant, which saw 900 people in the state lose their jobs, was a response by Dell to the slowing global market for PCs and most other consumer goods. Although the closure of the plant will have saved the company a not inconsiderable amount of money in terms of running costs, this could well be wiped out if it is forced to repay the money given to it as part of the deal with the North Carolina legislature - potentially leading to the closure of more plants elsewhere in order to cover its debt to the state.

So far Dell has not commented on the affair, but it will certainly be fighting its corner should the matter reach the courts.

Do you believe that Dell should repay the money given to it by the state, or did the company fulfill its end of the bargain when it opened the plant - no matter if it then closed it again? Share your thoughts over in the forums.

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