Back in April of this year, the McDonnell administration concluded a highly-publicized bidding war with Maryland and D.C. for the honor of hosting the corporate headquarters of defense contractor Northrop Grumman. The cost to Virginia taxpayers? Between $12 and 14 million in “cash and incentives.”
The company promised to relocate 300, high-wage jobs to Northern Virginia, a point the administration made sure to highlight. At the time, it was seen as a big win for Gov. “Bobs4Jobs” McDonnell.
But since that deal closed, Northrop has been shedding jobs in Virginia — 330 at Fort Eustis and over 370 at its ship building unit in Newport News, announced Friday morning.
According to the Wall Street Journal, this could be just the beginning of Northrop’s cuts. According to the Journal, Northrop may leave the ship building business entirely:
Northrop’s reinvention includes winding down operations at its Avondale shipyard in Louisiana and consolidating Gulf Coast ship construction at the Ingalls shipyard in Pascagoula, Miss. It also says it would consider spinning off or selling the entire shipbuilding segment, which includes the Newport News yard in Virginia, the nation’s sole maker of nuclear-powered aircraft carriers. In an SEC filing last month, the company said it intended to create a stand-alone shipbuilder, New Ships Inc., with a spinoff as the company’s primary focus.
So…Virginia’s taxpayers gave a very large sum of money to Northrop to entice so it would bring its headquarters operations to the state. Since then, the company has shed twice the number of jobs than it promised to create and will likely exit one of its more labor-intensive operating units in the near future.
If Virginia’s political class ever wonders why some folks just don’t trust them to do the right thing with their money, here’s a case study.
And it does make one wonder whether the $300,000 given to financial giant Capital One, the $2.1 million given to Microsoft, and tens of thousands of taxpayer dollars sunk into other corporate welfare deals will go as sour, as quickly, as the Northrop Grumman lemon.
