Lawmaker Wants State Help for Goodyear on Shipping Costs: Shipper Threatens to Leave N.C. Port

By Jonathan B. Cox, The News & Observer, Raleigh, N.C.

Nov. 9–In September, Goodyear Tire & Rubber won as much as $40 million in state incentives to stay in Fayetteville.

Now a lawmaker is proposing that North Carolina help lower the company’s shipping costs, too.

At issue is the rubber that Goodyear uses to make tires. The Singapore shipping company that brings the material to North Carolina has asked officials at the state port in Morehead City to cut fees by 30 percent or, beginning in the spring, it will start moving rubber through New Orleans instead.

That’s a threat in Morehead City. If the company diverted rubber shipments, the port would lose $3.1 million in annual revenue and could lose jobs. Longshoremen spend an estimated 20,000 hours a year at the port working on vessels that bring in rubber.

Port officials have been working to resolve the matter for months, talking with executives from PACC Lines, the shipper, and Goodyear. Talks were going on behind the scenes as the legislature, in September, approved a new incentives package to keep Goodyear in the state.

The General Assembly agreed to split as much as $60 million over a decade between companies that agree to invest as much as $200 million and meet other criteria. Goodyear and rival Bridgestone, which operates a tire plant in Wilson, are expected to be the only companies that qualify.

The legislature did not tackle the port fees. Rep. Pat McElraft, a Carteret County Republican, wants the state Department of Commerce to do so. A committee there is crafting rules to implement the General Assembly’s new incentive program and has some flexibility.

“I understand that it is not legal to ‘force’ a company to ship through a specified port, but I do think it is legal to have a portion of the grants made available as an incentive to help pay for shipping,” McElraft wrote Commerce officials Monday. “The Morehead City Port needs help and our jobs need to be saved just as much as the jobs in Fayetteville and Wilson do.”

Specifically, she proposed that the committee reimburse a company such as Goodyear 30 percent of their shipping charges through a North Carolina port. Port officials have said that Goodyear is pressuring PACC Lines to cut its costs. If the state gave a bigger grant to Goodyear, it could have the same effect.

Commerce Secretary Jim Fain said Thursday that the committee would consider the proposal. The panel is accepting public comments through Tuesday on proposed rules for implementing the new incentive program. It will hold a public hearing Wednesday at 4 p.m. in the boardroom of the Commerce Department at 301 N. Wilmington St. in Raleigh.

jonathan.cox@newsobserver.com or (919) 836-4948

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