LOWELL – Sonic Automotive is no longer planning to hire more than 400 workers for a Gaston County facility, and will give up the opportunity to receive nearly $6.8 million in economic incentives that are tied to job creation targets.
It appears that employment at the company’s Lowell facility has fallen well short of Sonic Automotive’s original projections.
A company letter provided to WRAL TechWire notes that Sonic Automotive “no longer intends to hire the minimum” number of workers that would be required in order to receive incentives payments.
Plans altered by pandemic
The letter, signed by C.G. Saffer, vice president and chief accounting officer of Sonic Automotive, Inc., states that the COVID-19 pandemic altered the company’s business plans.
Those plans originally included the creation of 500 jobs that would pay average annual wages of more than $53,000 in Gaston County, as noted in an economic incentives agreement between the company, a related member party EP Realty NC, LLC, and the state of North Carolina.
The Job Development Investment Grant, or JDIG, was awarded by the North Carolina Department of Commerce’s Economic Investment Committee on December 13, 2018. It stipulated that the company would “open a marketing resource and customer contact center” and make an investment of at least $11.2 million, according to a statement from North Carolina Governor Roy Cooper in December 2018.
Last month, the company announced record earnings for a fourth quarter in which the company generated some $3.2 billion in revenue and more than $122 million in before-tax income. The company also noted in its earnings report that it experienced a record year when it came to earnings and income, as well.
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Seeking termination of the agreement
The company’s February 2022 letter to the Economic Investment Committee notes that the grant agreement requires the creation of “450 new, full-time jobs and the maintenance of 423 retained jobs as of December 31, 2023.”
The letter calls the Lowell facility “the previously contemplated call center” and notes that the company invested more than $16.5 million in the facility by the end of 2021.
However, the company “no longer intends to hire the Minimum Eligible Positions required,” the letter notes. Only 76 full-time employees were based at the Lowell facility as of December 31, 2021, the letter notes. The company’s careers website currently lists zero available openings that would be based in Lowell, NC.
Therefore, the company notes, it seeks to terminate the agreement with the state of North Carolina, foregoing eligibility for incentive payments for 2021 and subsequent years.
A spokesperson for the Department of Commerce confirmed to WRAL TechWire that the company has not received any incentives payments for the associated grant agreement. Sonic Automotive has not yet responded to multiple inquiries from WRAL TechWire.
Microsoft also recently requested the termination of two economic incentive grants that the company made with the state of North Carolina in 2019, citing an unwillingness to provide the employment data that would verify the requirements set forth in the agreements.