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State won't get on its Cantonese to keep Lenovo's jobs

Officials decry 'pay to stay' demand

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A pair of Durham County officials have criticized Chinese PC maker Lenovo's attempt to pump the region for funds to keep around 2,000 jobs in North Carolina.

Beyond asking for cash, new roads and other perks, Lenovo has made the unusual demand that the county subsidize Chinese language classes at local universities. In addition, it requested that US schools form closer ties with universities in Communist China. The PC maker, which acquired IBM's computer business in May, stopped short of forcing county officials to hand out Little Red Books to all the local schoolchildren.

Lenovo's stunning demands came to light this week when County Manager Mike Ruffin accidentally let an incentives package proposal get into the hands of reporters. The package includes Lenovo's request for more than $14m to stay in the technology rich Research Triangle Park area. Without such funds, Lenovo may well look to build new offices and add jobs elsewhere - either in other states or even overseas.

Durham County has laws in place that permit incentive packages to go to companies creating new jobs. No company, however, has yet to receive funds just to maintain their workforce in the region.

"I think that would set a horrible precedent," Durham County Commissioner Lewis Cheek told local paper The News and Observer. "I just don't think it's a good idea."

Vice Chairwoman Beck Heron also tossed in her opinion.

"Our policy has proven very successful for us," Heron said. "I see no reason to change it, and I wouldn't vote to do it, I can tell you that."

Lenovo has been looking to build or lease new offices ever since a deal with the US government required it to vacate IBM's campus for fear that sensitive information might leak into the wrong hands. The new Lenovo facility could cost up to $80m and take up 600,000 square feet. The company indicated it might add up to 400 new jobs by 2009 at the offices.

North Carolina enticed Dell to set up a new plant in the state by dangling close to $300m in perks in front of the world's largest PC maker. Local business owners complained and have filed a lawsuit to block the incentives package.

One Durham official indicated he would vote in favor of the Lenovo incentives, while two others have yet to respond to questions about the issue. The Register contacted all five officials but has yet to receive comment.

A deeper dive into China's North Carolina nudge can be found here. ®

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