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Despite incentives on table, Jabil cuts jobs

After securing nearly $35-million in government incentives to add jobs and keep its corporate headquarters in St. Petersburg, Jabil Circuit on Thursday announced it was laying off 120 workers.

The news came as government subsidies for local companies are under more intense scrutiny and just two months after the secretive manner with which St. Petersburg granted Jabil incentives drew public outrage.

Economic development officials call the layoffs unfortunate but said they were unrelated to the subsidies pledged to Jabil. Only by building a new headquarters in St. Petersburg and creating hundreds of high-wage jobs, they said, will the company realize any benefit from the public purse.

"This money is not given to them up front," said Dave Goodwin, St. Petersburg's economic development director. "It's not a giveaway. If they don't perform, they don't get."

Goodwin did not address the broader question of whether public money should ever go to support a private company that is putting people out of work. It's a question complicated when the company involved is sending jobs overseas.

According to some who lost work, supervisors told them their jobs were headed to Jabil facilities in China, where labor is less expensive.

Trey LaBrant was paid a little more than $9 an hour working at Jabil's manufacturing center in north St. Petersburg — until Thursday. The divorced father of two said he could not understand why local governments would bend over backward to support companies that send jobs abroad.

"All of a sudden I'm out of work," said LaBrant, 45. "And they are giving all the work to foreign countries.''

In written statements, the company said the layoffs were unrelated to any plans to ship work to China but stemmed from the economic downturn. There are no plans for future layoffs, the company said, and it's hoped many workers can be rehired when business picks up.

Jabil, a Fortune 500 electronics manufacturing company, has outposts around the globe, with 75,000 employees in 20 countries. The company has a growing presence in China , India, Mexico, Vietnam and Ukraine, all locations with cheap labor and low manufacturing costs.

In its announcement, Jabil said it employed 1,880 people in the St. Petersburg area, but did not make clear whether that was before or after Thursday's layoffs.

In recent months, the state, St. Petersburg and Pinellas County have pledged a total of $34.4-million in subsidies for Jabil, which had threatened to move its headquarters, now at Gateway Business Park, to Michigan or California.

The package includes grants, tax breaks and money for road upgrades.

Before it could benefit from the package, most of which involves state tax dollars, the company would have to build a new $49-million campus and hire 858 new workers over several years. The jobs would have to pay 115 percent of the area's average wage, which now stands at $42,700 a year.

The office of Gov. Charlie Crist must grant final approval to the Jabil subsidies. County economic development officials said they had yet to hear whether approval would be given. State officials involved in the process could not be reached.

It's not the first time the company has looked to government for a boost. Jabil was promised $3.4-million in state tax refunds in 2001 in exchange for creating 1,150 new jobs in Florida. Two years ago, the company unveiled plans to build a new headquarters in St. Petersburg, but never followed through.

Will Van Sant can be reached at vansant@sptimes.com or (727) 445-4166.

Despite incentives on table, Jabil cuts jobs 09/11/08 [Last modified: Wednesday, September 17, 2008 2:15pm]
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