Tue January 7, 2014
NC Commerce In Process Of Privatizing Job Recruitment
The North Carolina Commerce Department is in the process of changing the way it recruits and retains businesses. It's privatizing parts of the public model it currently uses, and it announced Tuesday who the interim CEO of the new, private side will be. But much about the new model is still up in the air, including whether state lawmakers will approve it.
Governor Pat McCrory's administration wants to make major changes to the Commerce Department, but state lawmakers have only given him permission to take baby steps.
So far, those steps have included creating the private side of the public-private partnership he wants to use to recruit and retain businesses. It's called the Economic Development Partnership of North Carolina, and it's incorporated as a nonprofit.
Another step was hiring an interim CEO to lead it. The Commerce Department announced Tuesday that'll be Dick Lindenmuth.
"I'm very proud to be a North Carolinian since 1981," Lindenmuth said on a conference call with Commerce Secretary Sharon Decker. "I've also been critical about the lack of support for bringing companies in here. Now I don't have anybody to point to except for myself."
He's been CEO of several companies, including ITT Group in Raleigh. More recently, he's been a consultant. Businesses hired him to act as their interim CEO as they went through changes.
Secretary Decker said that makes him a good fit for the partnership.
"One of the hesitancies by other candidates was, boy, there's a lot of uncertainty – not sure how all of this will move forward," she said. "Dick understands that because that's been the nature of the work he's done on an interim basis."
Lindenmuth will make $120,000 a year in taxpayer money to run the private group. How exactly it'll work with the state is one of the things he's in charge of figuring out. As of now, the Commerce Department is basing it off of a bill that has not passed the state legislature.
But Decker said lawmakers did give the department permission through a budget provision to start developing the partnership.
"We're working through the details of that right now, as to exactly how the transition will take place," she said. "We did identify in that plan a number of employees whose positions will no longer exist on the public side of the house."
About 70 state employees who currently handle selling and marketing the state will be laid off. Those jobs will be privatized under Lindenmuth.
The plan has its critics. Some worry that privatizing job recruitment could lead to a pay-to-play system, where private companies help fund the partnership, and then the partnership recommends they get state incentives.
It's unclear if that would be the case. The Commerce Department is still working out the details, and state lawmakers still need to approve them. Decker expects that to happen during the legislature's next session, which starts in May.