Swedish automaker Volvo will expand its $500 million investment in a Ridgeville, SC, auto plant to $1 billion, according to CNBC. Volvo representatives did not comment on the reason for the decision.
The Charleston-area factory, which will make the company's new S60 sedan, will employ 3,900 people and produce up to 100,000 vehicles a year. The facility could also manufacture a second model, the S60.
In 2015, the state authorized borrowing $123 million as part of a $200 million–plus incentive package to seal the deal with Volvo, according to The State. A portion of the money will go toward site and road work around the new plant, which is scheduled to start production next year.
Volvo and South Carolina's deal isn't the only one of its kind. State and local governments continue to offer up major tax breaks and other incentives to lure foreign and domestic manufacturers as well as other companies, which are all expected to return the favor with major contributions to the regional economy in the long run.
South Korean electronics company LG recently broke ground on a $250 million washing machine factory in Clarksville, TN. The company is also providing some infrastructure work around the site, hiring veterans and offering job training for local residents in exchange for incentives from the state and the Tennessee Valley Authority.
Taiwanese electronics manufacturer Foxconn announced earlier this year that it, too, would make a significant investment in U.S. manufacturing operations. In exchange for spending $10 billion to build a flat-panel display factory in Wisconsin, the company was promised a $3 billion tax incentive package, which Gov. Scott Walker signed into law this week. However, some attorneys for the state legislature caution the deal could be unconstitutional, and the tax break has already come under fire for its expected hefty costs to the state.
Incentives aren't limited to manufacturers. Apple is developing a $1.3 billion data center near Des Moines, IA, and is getting nearly $208 million in state and local tax breaks in return. The facility is expected to create 50 permanent local jobs, and Apple has agreed to donate $100 million to a local economic development fund. The area has seen substantial population growth, and officials hope projects like Apple's will draw additional development and help fund the infrastructure necessary to support new residents.