Commerce Secretary Harry Lightsey joins Gavin Jackson to debate the newest Scout deal and total financial improvement within the state.

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Gavin Jackson: Welcome to This Week in South Carolina. I am Gavin Jackson. With the announcement of Scout Motors investing $2 billion to open a plant in Richland County, South Carolina continues to see a producing growth within the state. Commerce Secretary Harry Lightsey joins me to debate the method of touchdown the deal and the state of financial improvement in South Carolina. Secretary Lightsey thanks for becoming a member of me as we speak.

Secretary of Commerce Harry Lightsey: It is my pleasure. Nice to see you.

Gavin Jackson: So we have been which means to get you on the present for a while now. I do know you turned Secretary again in 2021, and quite a bit has occurred throughout your time right here, because you took the reins from longtime Secretary Bobby Hitt, however earlier than we get into financial improvement discuss, I simply wish to get a few of your background, should you might simply clarify your background, the place you got here from, I feel this can be a second or third act for you coming from the personal sector.

Secretary of Commerce Harry Lightsey: Not less than the second or third act. So, actually spent the vast majority of my profession in telecom, largely with the regional Bell working firm within the southeast area, Bell South, after which after Bell South and AT&T merged, retired from AT&T after which joined Basic Motors, and spent about eight years with Basic Motors retiring from there. In 2019, I did a short, some transient work with a small consulting agency referred to as Hawksbill advisors that some mates of mine who had labored with at each at AT&T and at Basic Motors, after which COVID hit and we type of went by that like everyone else, and in regards to the time we had been popping out of COVID, Secretary Hitt determined to step down and I had this chance, and I used to be very, very blessed to have the ability to spend a while serving my residence state.

Gavin Jackson: Secretary Lightsey let’s simply begin with the largest information right here to date this yr, and that is a Scout Motors deal, that $2 billion deal 4000 new jobs coming to the Midlands within the coming years. Inform us in regards to the significance of this deal, and simply what it means for the area at this level. 

Secretary of Commerce Harry Lightsey: Properly, so I feel the Midlands is without doubt one of the areas that actually and naturally, it is my hometown, Columbia is my hometown I grew up right here, however it has, it has lacked an industrial id. If you consider BMW within the Upstate, and Boeing and Volvo within the Low nation, the Midlands has been recognized largely because the state capitol, the seat of state authorities, and as soon as upon a time, it was type of a monetary heart of the state, however that eroded with interstate banking, and so I feel the Midlands has type of lacked that industrial id, and I feel Scout Motors actually offers that chance for the Midlands, to ascertain itself, simply because the Upstate has been capable of, and the low nation has been capable of so I feel it is actually thrilling. Scout Motors’ residence goes to be right here within the Midlands, and I feel that could be very important. You recognize, they’re simply getting began with this model, however it’s a model owned by the biggest vehicle producer on the earth, which is Volkswagen, and this shall be their residence facility, and you recognize, that I feel goes to be substantial when it comes to id as nicely. So I feel you recognize what BMW has meant to the Upstate during the last 30 years and going ahead, what Boeing and Volvo have established within the Low nation simply within the final 10, 15 years. That is the type of id that we’re speaking about, I feel for the approaching years and a long time for the Midlands as nicely with Scout Motors.

Gavin Jackson: So transformational funding proper there. Are you able to give us somewhat background sir, about how this deal materialized and what made the Blythewood website so interesting to Scout Motors? 

Secretary of Commerce Harry Lightsey: Properly, I feel the Blythewood website is interesting for lots of causes and definitely that is what we proceed to emphasize with the corporate as soon as they began us. You recognize, it’s a nice location on I-77, which is a serious interstate freeway, which offers a excessive stage of visibility, significantly for people who find themselves touring from the north and Midwest, to the south to come back to our seashores in South Carolina and Georgia and Florida. So I feel that’s positively necessary. Our location actually is the middle of the southeast, which is the quickest rising area within the nation and so the logistics of with the ability to attain all the southeast are, had been extremely necessary, and albeit, simply our location, Columbia is sort of precisely midway between Miami and New York Metropolis, and from their website, actually they’ll, over two thirds of the US inhabitants is inside a in the future’s drive. So, you recognize, the all of that’s, could be very, crucial to them, and I feel, you recognize, that is going to be an American automobile Made in America for the American market, they wish to be recognized with that, and South Carolina’s location is ideal for that.

Gavin Jackson: We will stick to Scout for somewhat bit too, and since a significant component on this deal, too, which was actually type of got here collectively, I feel, in about two months after we had been handed over initially. However one of many huge elements was the $1.3 billion incentive bundle that we supplied them. Are you able to inform us the place that cash’s coming from and the way you make sure that taxpayers get probably the most bang for the buck and return on funding right here? 

Secretary of Commerce Harry Lightsey: Yeah, so to begin with, I am going to say that, you recognize, this can be a very aggressive course of, and we realized that Scout had checked out 74 different websites and in quite a lot of different states, and so we predict our incentive bundle, because it turned out, was very aggressive with different states. I do not know, formally, if we had been providing any kind of than different states, I feel we had been all very aggressive, however the different factor about our incentives that I feel I can not stress sufficient is that we’re not simply offering cash to the corporate. That is really cash that’s being invested within the website in South Carolina. So, for instance, it will pay for a freeway interchange along with serving Scout Motors can even serve the residents of the quick rising Blythewood space, it should pay for railroad infrastructure, and extra roadwork and website work itself. So the cash goes to be spent in South Carolina, on the location on South Carolina, and as such, the taxpayers of South Carolina get pleasure from that funding, along with Scout Motors. So it isn’t like we’re simply handing a giant firm examine. There was some misinformation about that. However I simply need I’d love for the viewing viewers to know that we will be very cautious when it comes to how this cash is spent. All the cash must be I assume vouched for. We have now to have documentation that proves how they’ve spent the cash earlier than it will likely be dispersed. So, you recognize, we are going to guarantee that it’s spent appropriately and on the appropriate issues.

Gavin Jackson: Sure, Secretary as a result of there’s all the time been some heartburn over providing incentives, some name it company welfare, particularly when offers crumble, like we noticed with the Panthers deal up in Rock Hill, you recognize, there’s fears of wasted cash being spent. However is that this principally the price of doing enterprise today relating to these incentive packages, and ensuring there are callbacks in there, so we get that cash again?

Secretary of Commerce Harry Lightsey: Yeah, that is a fantastic level in regards to the clawbacks. We do have clawbacks on this settlement. So if Scout Motors fails to, to achieve the efficiency hurdles that it has agreed to contractually, we’re, we do have the appropriate to get the cash again that we now have invested within the website for them. So along with having a a lot improved website, we now have the power to really stand up to virtually $800 million of that funding again. So we’d get pleasure from all of the enhancements on the location plus the $800 million again, and people clawbacks are assured by Volkswagen, which, as I stated beforehand, is the biggest vehicle producer on the earth and the seventh largest firm on the earth. So, very substantial firm, we really feel very safe with their assure of the clawbacks and the payback of a $200 million mortgage that they’ll use to make additional enhancements on the location itself.

Gavin Jackson: Secretary Lightsey, after we have a look at having one other auto producer within the state, I feel this shall be our fourth, what does that sign to the nation? I imply, are we…? How is that place our state going ahead? Are we just about an automotive state at this level? I do know we construct planes as nicely, however how can we stack up after we have a look at different states relating to the automotive trade?

Secretary of Commerce Harry Lightsey: Properly, I feel this definitely places South Carolina on the map as an automotive powerhouse having a 3rd main world OEM right here in our state. We’re a small state geographically, however having a 3 main world OEMs, positioned right here in our state, definitely positions us with some a lot bigger states, like Michigan and Tennessee, and Georgia and others. So I feel that this sends a fantastic sign when it comes to suppliers. who wish to find right here to be shut to those world OEMs. You recognize, we even have a number of different firms which are producing autos. As a part of this mobility revolution. Proterra makes transit buses, Oshkosh Protection shall be making the subsequent gen- eration postal supply automobile, Mercedes makes vans the sprinter vans within the low nation as nicely. So, should you add all that collectively, plus the over 500, suppliers that we now have right here on this state 75,000, plus South Carolinians already working within the auto trade, and I feel we’re positioned for super development going ahead into the longer term. It is a key a part of our financial system. I feel it is also necessary to emphasize that, you recognize, the auto trade is present process its largest change because the days of Henry Ford. You recognize, they’re making this changeover from the gasoline combustion engine to the battery electrical automobile, and so as to defend the roles that we do have right here on this state and the auto trade, we now have to make that pivot with the trade or else, all the oldsters which are working right here, their jobs are in danger, as they’re recognized as working with an outdated expertise. So I feel it is crucial for us to ship the sign that we’re embracing this function for the auto trade, we wish to be a part of it. On the similar time, I’ll say you recognize, the auto trade is definitely a really important a part of our financial system, and our GDP, however we do have a really diversified financial system in our state, and as you talked about, you recognize, we now have, definitely Boeing and Lockheed Martin in Greenville, producing F-16, fighter jets, Boeing producing the 787, Dreamliner in Charleston. So the aerospace trade is a giant a part of our financial system. The quickest rising a part of our financial system, the final two or three years, has been within the life sciences space. So we have seen super, super development there. So our financial system could be very diversified, and I feel that is necessary. We’ll proceed to look to diversify our financial system in order that we’re not topic to the ups and downs of anyone sector of trade.

Gavin Jackson: We have seen that previously for certain there, and I did wish to simply discuss the way you’re speaking about this revolution, mobility revolution. We’re speaking about electrical autos, too, as a result of that’s big, relating to these suppliers. You are additionally mentioning, in fact, additionally our OEMs like BMW and Volvo, that are pivoting huge investments too, to their, electrifying their automobile strains too, however you’ve got additionally seen huge investments relating to EV batteries, Redwood supplies, for instance, Envision AESC, I imply, these are all associated to those huge investments, which I feel is all just about spawned due to that bipartisan infrastructure legislation that Joe Biden signed in 2021 to essentially incentivize a whole lot of this to be taking place in America.

Secretary of Commerce Harry Lightsey: Yeah, I feel there definitely are two dynamics which are occurring, I feel, within the pandemic taught many firms that they should have their provide chain shut by. So I feel that due to the pandemic, there was already important momentum towards onshoring provide chain in a number of industries, and that included the auto trade as nicely, however there are, as you identified incentives as a part of the inflation Discount Act, there are incentives there which are there to advertise funding in the USA in bringing the EV provide chain right here. You recognize, frankly, earlier than the pandemic, China managed over 90% of the battery manufacturing capabilities within the globe, and over 90% of the supplies that go into batteries, and so I feel having the USA develop its personal functionality in order that we’re not topic to a different nation’s capabilities is definitely crucial. 

Gavin Jackson: Particularly once you have a look at stacking up in opposition to different states too, I do know, we’re speaking about simply, the price of doing enterprise with incentives, however how can we stack up relating to these suppliers, these producers I imply, when it comes to competing for these, what are a number of the benefits that we now have? Clearly, you are speaking about location being the large one. How do you ways do we actually compete with the Georgias and the Tennessees relating to these jobs?

Secretary of Commerce Harry Lightsey: Properly, it is all for various ones, they’ll be totally different traits, however I feel one of many issues we now have in South Carolina is, we now have a really sturdy set of geographic benefits. Along with that the Port of Charleston, is essential to many firms, the biggest and eighth largest port in the USA, the deepest port on the East Coast. Now, with the dredging completed. So I feel Charleston is an amazing asset to our state and we use that every single day after we’re speaking to firms. I feel the closeness now to all of those world OEMs, who’re positioned so we now have those who we simply talked about, which are positioned right here in South Carolina, however we are also very near a Hyundai, which is positioned is constructing a serious facility proper exterior of Savannah, Kia, which is already which has been in Georgia for a variety of years, you recognize, Volkswagen, Nissan, and Basic Motors, after which quickly Ford are establishing main services in Tennessee. There are Mercedes and Toyota have services in Alabama and Mississippi. So, you recognize, the southeast usually has turn into a really core a part of the auto trade in the USA, and you recognize, if suppliers select to find right here in South Carolina, they’ve entry to all of these companies. 

Gavin Jackson: Secretary, let’s pivot to our workforce as a result of clearly, our state’s rising, the southeast is rising, however our workforce inhabitants is ready to shrink over the approaching years, based on funds forecasters in our state. So we have talked about file investments, we’re additionally speaking about huge job numbers, like Scout, we’re speaking about 4000 jobs, and 1000’s of different jobs for lots of those different investments. Are we going to have sufficient folks to fill these jobs?

Secretary of Commerce Harry Lightsey: Yeah, I feel we’re assured that we are going to, you recognize, our colleges, our tech schools are, are actually wonderful services and coaching folks with the appropriate talent units to satisfy the roles which are which are accessible within the market, and we work we now have an amazing program referred to as Prepared SC that actually works with companies which are finding right here in our state, and understands what talent units they should succeed, after which works to coach college students with these talent units. So the tech schools, that are globally acknowledged as main establishments are crucial, but in addition our 4 yr schools have established robust reputations. Clemson College has the one undergraduate automotive engineering diploma within the nation, and that’s, that is an enormous asset. Clemson additionally has the web Worldwide Heart for Automotive Analysis, which is a acknowledged world main heart of analysis within the vehicle trade. College of South Carolina proper right here within the Midlands and near Scout, has the McNair engineering faculty, and engineering faculty. You recognize, they produce engineering graduates yearly, that are crucial to those firms. Along with that we now have six of the seven HBCUs within the state are positioned within the Midlands space, and Benedict Faculty, Allen, SC State, Claflin a number of of these have engineering applications as nicely. So, you recognize, the variety that is accessible by the HBCUs is essential to those firms as nicely.

Gavin Jackson: So do you suppose that we’ll be stopping this mind drain that everybody all the time appeared to complain about for years till we received a whole lot of these huge producers, I imply, folks getting their levels transferring on to some place else. Can we see possibly some extra seize now that we now have these big producers within the state, these engaging, excessive paying jobs?

Secretary of Commerce Harry Lightsey: It is definitely our hope that our college students will keep right here. You recognize, that’s, that is crucial. Clearly, it will likely be necessary to growing our workforce and offering our residents with nice jobs, and, you recognize, I feel that it a giant a part of what we’re making an attempt to do is, is present the type of jobs that lead into the longer term which are going to make our college students excited in regards to the potentialities of working with these firms which are positioned right here, and supply the type of alternatives they wish to keep right here. So that may be a huge a part of what we’re making an attempt to do.

Gavin Jackson: Secretary, after we discuss these huge producers, we discuss Greenville. We discuss huge facilities of commerce right here within the Midlands, we discuss issues down within the low nation like Boeing and Volvo. However there’s in fact, the agricultural areas of our state, too, that generally really feel like they have been uncared for in some methods. How do you see these areas rising? Clearly, we have seen an inflow of federal cash to assist assist native infrastructure on the market. Are we going to make these locations somewhat bit extra engaging to huge producers or to extra jobs? What’s commerce doing to deal with that?

Secretary of Commerce Harry Lightsey: Properly, so you recognize, it is the agricultural areas of the state are definitely an financial problem and one thing we work on yearly. I’ll say that, very proud to say that, we now have met our objective for creating rural jobs within the state for the final three years in a row, and this yr, we’re very a lot on observe. We simply had an enormous announcement in Allendale, South Carolina, A Vietnamese tire manufacturing firm, goes to find their first facility exterior of Vietnam, exterior of Southeast Asia, in Allendale, which is actually one of the crucial distressed components of our state. So, it will produce a thousand jobs in Allendale, and I feel that’s each bit as important because the 4000 jobs that Scout is bringing to the Midlands, for that a part of our state. So we do work on that. There are efforts underway to boost the infrastructure within the rural components of the state. We work very carefully with our sister company, the agricultural infrastructure authority, they usually have simply been within the technique of being given a billion and a half {dollars} to supply water and sewer infrastructure, primarily in rural components of our state. We work very carefully with the Workplace of Regulatory employees, which is working very laborious to ship a broadband throughout our state together with to rural components of our state. So I feel, as that infrastructure begins to fill in, and albeit as these rural areas begin to adjoin the areas of main improvement, extra alternatives will come. So, should you have a look at Scout Motors, for instance, it’s within the northernmost a part of Richland County, which is a really thought of a really city developed County, however it’s inside a couple of miles of Fairfield County, Newberry County, Lexington County, Orangeburg County, you recognize, all of those areas that, you recognize, as soon as are thought of rural, however I feel they may have alternatives to land firms that produce jobs for these areas as nicely.

Gavin Jackson: Yeah, we’re speaking in regards to the suppliers too like we even noticed final yr with like we stated, Envision AESC going into to Florence bringing a whole lot of jobs and funding there too to that rising area. We have now about two minutes left. Sir, I simply wish to ask, relating to potential initiatives, do you see financial headwinds getting, you recognize, affecting recruitment and enlargement efforts within the state after we discuss potential slowdowns with the worldwide and the nationwide financial system?

Secretary of Commerce Harry Lightsey: You recognize, we actually have not seen that. We have open, we’re persevering with to see massive numbers of initiatives which are our state. I feel that these macro elements, like the will to onshore provide chain, the conversion within the vehicle trade, these macro elements are outweighing the brief time period potentialities of a recession within the US financial system, they usually’re spurring funding for the long run. So these firms are making these investments for years and a long time to come back, and to date, they aren’t sort of what’s prone to occur within the – within the US financial system within the subsequent yr or two and letting that influence their choices.

Gavin Jackson: Then we’ll simply get on out of this with lower than a minute left. I simply wish to ask you what your outlook is for the remainder of the yr. Ought to we anticipate some extra huge bulletins coming ahead?

Secretary of Commerce Harry Lightsey: Properly, we’ll see. We’ll see what occurs. You recognize, we by no means know when a enterprise goes to determine to find right here till they inform us that they’ve made that call we now have. We’re engaged on numerous initiatives. We’re engaged on numerous very huge initiatives. We might be very excited to have any of them determine to find in South Carolina, however it’s a very, very aggressive world on the market. Different states are vying for these initiatives as nicely, and we’ll simply see what occurs because the yr progresses.

Gavin Jackson: All proper. We’ll be watching too. That is South Carolina Commerce Secretary, Harry Lightsey. Thanks a lot, sir. 

Secretary of Commerce Harry Lightsey: Thanks.

Gavin Jackson: To remain updated with the newest information all through the week. Try the South Carolina Lede. It is a podcast that I host on Tuesdays and Saturdays that you will discover on South Carolinapublicradio.org or wherever you discover podcasts. For South Carolina ETV, I am Gavin Jackson. Be nicely, South Carolina.