Libbey Glass Inc. seeks tax credit for proposed expansion

Company officials recently met with representatives of Caddo Parish, Shreveport, Caddo Parish School Board and Caddo sheriff's office to discuss the plans for a proposed 650,000-square-foot warehouse.

The expansion would not create any new permanent jobs. At the same time, the company could cut its work force from about 1,000 jobs to 500 over 20 years, said Bill Hanna, Caddo Parish administrator.

In August, Libbey Glass announced that it was "realigning its production capacity" at all of its glass manufacturing facilities, which would include layoffs and the closure of one of its plants in California this year.

Libbey also announced it was in the final stages of steps necessary to manufacture glass tableware in China beginning in 2007.

Locally, a formal application for incentives for the warehouse was filed, and local officials are in the process of negotiating a counterproposal.

"They are looking for additional help in building a new warehouse," Caddo Parish attorney Charles Grubb said. "The taxing bodies are willing to work with them especially after we found out that they are in a competitive industry where a lot of production is going overseas.

"We are convinced that they need additional assistance in keeping 1,100 jobs here."

Libbey spokesman Kenneth Boerger at the corporate headquarters in Toledo, Ohio, said the company won't comment on any ongoing negotiations.

Libbey Glass, which has operated its glassware manufacturing plant in Shreveport since 1974, wants to build a facility where materials used in manufacturing can be handled, processed and stored. The property is west of Monkhouse Drive, south of Greenwood Road and north of Interstate 20.

The overall project cost would be $35 million, which includes $25 million for the facility, $5 million in new equipment and $5 million for labor and engineering.

About 200 construction jobs will be tied to the project, but the expansion is not expected to create any full-time, permanent jobs. Company officials have proposed keeping the employment level to a yearly minimum over the 20-year period, Hanna said.

"Cutting the work force is not uncommon," Hanna said. "The biggest expense of any company is manpower. If they cut the work force they can curtail expenditures and be more competitive."

The tax exemption program defers assessment of the ad valorem taxes normally assessed on renovations and improvements. The local municipalities are willing to grant the abatement with special conditions, including increased employment numbers, up from what the company proposed, Grubb said.

If the commitment levels aren't maintained for a given period, the company will have to pay property taxes that would have been due without the abatement.

"We are negotiating with them as to what level of employment that we expect," Grubb said.

The taxing bodies will counter-offer Libbey Glass with a 12-year contract with an increased schedule to pay a percentage of the taxes each year for the next eight years, Hanna said. The plan will freeze tax payments for the first 12 years, then the company will kick in a specific percentage of the tax each year, beginning with year 13.

"We don't want to do a straight 20 years because we went 25 years with (General Electric)," Hanna said. "Their time is up, they cut their work force and the plant moved to Mexico."

Kurt Foreman, senior vice president of economic development for the Greater Shreveport Chamber of Commerce, said Libbey Glass plans to expand have been brewing for several months, but he declined further comment.