Democratic House leaders want Gov. Norm Bangerter to place a controversial $10 million loan program for McDonnell Douglas on Wednesday's special legislative call, but the governor likely won't do it.
"We want to make sure that no one - especially a good corporate citizen like Thiokol - isn't discriminated against because of this loan," said House Minority Whip Kelly Atkinson, D-West Jordan.But Bangerter chief of staff Bud Scruggs says the letter from House Democrats sounds more like a political complaint than a serious concern. "There's no point putting the McDonnell Douglas deal on the special session call. There's nothing to fix; anyone can apply for the loan money now," said Scruggs.
Thiokol executives complained after Bangerter signed the bill into law that the measure discriminates against the northern Utah company - the state's largest private employer - because it gives an advantage to Hercules, a subcontractor to McDonnell Douglas and a potential competitor of Thiokol.
Soon after the bill passed, McDonnell Douglas announced a new, $60 million contract with Hercules for production of graphite epoxy motors.
That and other criticism of the loan program caused Atkinson and other Democratic leaders to ask that the issue be revisited. Atkinson emphasized that Democrats don't want to kill the McDonnell Douglas loan. "But we do think it went through quickly and we don't want other Utah business to suffer. Frankly, if we'd known of the anti-competition atmosphere (in the bill), I don't think it would have passed," said Atkinson.
Thiokol is invited to apply for the loans, said Russ Behrmann, spokesman for the state Department of Economic and Community Development, who will oversee the loan program.
The idea is that the state will loan McDonnell Douglas, or any other large company, almost $10 million at 10 percent interest. If the firm generates enough Utah contracts, payroll and related economic activity, the loan - principal and interest - won't be repaid in cash.
Rather, "credits" will be given. And the state will more than be repaid through the economic activity generated from that business. For example, DCED officials estimate that McDonnell Douglas, over 10 years, will bring $600 million worth of business into Utah through expansion of its operations at the Salt Lake International Airport. That, in turn, will result in $72.7 million in new taxes for the state and $45.9 million in new taxes for local governments - a total of $118.6 million in revenue after the $9 million plus interest is subtracted.
"A member of House Democratic leadership is (Rep). Grant Protz-man who represents some of the Thiokol people, who are upset," said Scruggs. "This is a political request (by Democratic leaders). Thiokol can apply for the loan money, we want them to generate more business in Utah."
Behrmann said DCED is now advertising the loan fund outside the state, hoping other large businesses will look fondly upon it and locate or expand operations in Utah. "This is not an exclusive McDonnell Douglas fund or loan plan," he said.
Unrelated to the loan question, McDonnell Douglas officials announced Monday the laying off of 1,000 workers from its Southern California aircraft plants, but company officials say those layoffs won't curtail nor effect current Utah operations nor company plans to expand in Utah.