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October 15, 2008
Invista's announcement that it plans to lay off 400 workers a Delaware nylon plant comes less than four years after the company became the recipient of the largest strategic fund incentive package ever offered by state economic development officials.
The chemicals and textile maker, a subsidiary of Kansas-based Koch Industries, announced Tuesday that it would lay off 80 percent of its Seaford work force by the middle of next year.
Barely six months ago, Invista requested a $1.6 million competitiveness grant from the state Council on Development Finance to help offset capital expenditures at the Seaford facility. Invista officials also asked the CDF to approve an amendment to a $14 million Delaware Strategic Fund grant it received in 2004. The company asked for permission to take $2.25 million in grant money intended to support recruitment of high-wage engineering jobs in New Castle County and use it instead for environmental improvements to the Seaford plant.
Both grants requests were approved, but Dina Reider-Hicks, a spokeswoman for the Delaware Economic Development Office, said Wednesday that Invista has not drawn on either one.
According to minutes of a March 31 CDF meeting, Seaford plant manager Gary Knight said that as a result of an earlier restructuring, the plant was left with "a substantial 'overhang' of infrastructure and overhead costs."
"He stated Invista is committed to improving site competitiveness and innovating its manufacturing processes and its high-value, differentiated product lines," the minutes read.
The CDF unanimously recommended that state economic development director Judy McKinney-Cherry approve both requests from Invista. In its findings supporting the awarding of the competitiveness grant, the CDF described Invista as "a profitable and growing going concern that is financially capable to make the proposed capital investment...."
Notice of the CDF grant recommendations for Invista were included in a spring "e-newsletter" posted on DEDO's Web site.
"Of special interest is the commitment of more than $50 million in capital investment for the Invista manufacturing facility (formally DuPont Nylon) in Seaford and the company's pledge to remain at the current employment levels for 10 years," DEDO noted.
Telephone messages left with McKinney-Cherry, Knight and Invista spokesman Roger Ramseyer were not immediately returned Wednesday.
In announcing the $14 million strategic fund grant in September 2004, state officials said they were offering Invista the money in order to retain 350 high-paying jobs. The money was awarded after the company said it would locate two global headquarters, for its apparel and performance fiber businesses, in New Castle County.
"We saved 350 jobs keeping Invista in the First State, and I think that is well worth our investment in time and resources," Gov. Ruth Ann Minner said at the time.
Officials said that in order to qualify for the incentives, Invista had to keep the jobs in Delaware for at least six years, and the jobs had to pay an average salary of $90,000.
While state officials boasted of saving 350 jobs, the actual grant agreement signed in December 2004 calls for Invista to have only 270 workers in order to remain in compliance.
"That may have been their employment numbers at that time," Reider-Hicks said of the higher employment figure touted by state officials.
According to Reider-Hicks, Invista has drawn down $11.7 million from the strategic fund grant. Of that amount, $7.5 million was used to retain 300 employees in New Castle County and Seaford, and another $2.5 million went toward facility improvements at locations that Reider-Hicks was unable to specify. An additional $1.3 million was used for training in New Castle County, with another $400,000 for training in Seaford.
"Absolutely it is money well spent," Reider-Hicks said, adding that Invista has a $214 million impact on the state's economy.
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