Home Budget, Economy Northrop Grumman Giveth, Northrop Grumman Taketh Away

Northrop Grumman Giveth, Northrop Grumman Taketh Away

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Back in April, we had Bob McDonnell touting Northrop Grumman’s decision to move its corporate HQ to northern Virginia. At a cost of just $12-$14 million to taxpayers, we supposedly got 300 new jobs coming our way. Good stuff, right?  

Yes, but.  The next thing we found out is that Northrop Grumman might also be laying off 330 people at Fort Eustis.  As a Richmond BizSense article asked at the time, “Did we gain 300 jobs only to lose 330? Is this Northrop’s way of saying “thank you very much for the $14 million in tax breaks” that were, no doubt, a factor in their decision?”

Well, now it’s begun.

Herndon-based Northrop Grumman says it’s laying off 173 people in Virginia.

Northrop Grumman announced the layoff Friday. The company says the employees work at Fort Eustis, where Northrop Grumman provides maintenance, transportation and other services.

In other words, Nothrop Grumman giveth, Northrop Grumman taketh away. So far, Virginia’s net jobs gain is 127 people (300-173) and falling fast, at a cost of $14 million.  That’s about $100,000 per job, with the cost increasing as the number of net jobs gained falls. Great stuff, huh?  Heckuva job by Bob McDonnell.

On the other hand, as an added bonus, Virginia gets to enjoy its “troubled 10-year, $2.36 billion statewide outsourcing contract” with Northrop Grumman for information technology services.  Such a deal!

  • Dan Sullivan

    We should look even further. It is quite possible that another contractor won the exact contract. It will either hire new workers or bring on the old ones. This begs the questions:

    Will the new contractor receive incentives for “moving” to Virginia?

    Will we reward multiple companies for “creating” the same jobs over and over?

    Will we count the same jobs as being “created” over and over?

    This is a potential new twist on Ponzi’s concept.  

  • Mike1987

    I doubt these types of incentive programs really work. I also seriously doubt the tax breaks provided equal to or are greater than the tax revenue enhancements it was to produce with the business that moved.  

    This kind of mindless crap is “non-denominational” and can be attributed to a politician who cannot read and fathom basic economic facts.

    VA Governor got his moment in the sun,  and Grumman got what they wanted, my tax dollars.  This is what I call business friendly!

  • kindler

    The fact that a major corporation can take the taxpayers’ money for a particular purpose, then immediately defy that purpose and openly flaunt that defiance in our faces — and expect to get away with it suffering zero consequences — speaks volumes about the type of society we have become.

    Are we still a democracy, or a corporate kleptocracy?

    So what will Gov Bob do or say about this situation? My guess is: absolutely nothing beyond perhaps a few lame excuses and platitudes.

    This is the type of thing that the public ought to be outraged about, rather than misdirecting their anger over phony charges of “socialism”. When you have corporations like this reaming you every day is precisely when “socialism” starts to sound appealling.