Sunday, November 25, 2012

Carlyle Group's Latest Taxpayer Subsidy


The Carlyle Group's TurboCombuster Technology received nearly $4.9 million in offers to expand production in Martin County, Florida and provide 200 new jobs.  Carlyle has until 2016 to add the required positions.

Martin County Economic Development Fund grant: $900,000
Governor's Quick Action Closing Fund grant: $3 million
State sales tax exemption for equipment purchases: $420,000
State workforce training grant: $350,000
Florida Power & Light Co.: $200,000 rate reduction

Texans gave Carlyle's Vought Aircraft Industries $35 million for 3,000 new jobs.  Carlyle had six years to meet their stated commitment.

The consolidation plan, as originally designed, would renovate and modernize the Dallas facilities and would close the Nashville and Stuart sites.
Stuart is Stuart, Florida in Martin County.  Carlyle didn't close the Stuart plant and never met its Texas job promises.

With three years to go, Vought CEO Elmer Doty stated new jobs weren't coming.  Vought reclassified the money from operating capital to financing in 2006.

Governor Perry has a whopper of a fish tale, that Vought provided 29,000 jobs, when it actually cut 35.  Texans gave Carlyle $1 million per job lost.  Perry renegotiated the deal before Carlyle sold Vought to Triumph in 2010. 

Let's hope Floridians have a much better and more honest experience with Carlyle.  Texans got ridden hard and put up wet.

Bonus fact:  Palm Beach County and Palm Beach Gardens together approved $272,800 in tax incentives to attract Chromalloy, another Carlyle Group affiliate. The state of Florida approved about $700,000.  Nothing beats a nondebt, nonequity capital injection.

Update 12-1-12:  A Realtor sued for their commission on the TurboCombuster property and incentive package deal.  After Carlyle purchased TurboCombuster, this realtor was shut out, despite years of work.

Update 3-10-13:  Governor Rick Scott will be in Stuart for a ceremony celebrating nearly $5 million in subsidy for Carlyle's TurboCombuster Technology.  Scott's PEU background is with Welsh, Carson, Anderson & Stowe.

Update 7-9-15:  Moody's downgraded TurboCombuster's debt due to weakening cash flows, less than expected operating performance and earnings headwinds.

Update 9-2-15:  Uncle Sam will send Chromalloy $74 million in business via Oklahoma's Tinker Air Force Base. 

Update 9-26-16:  Moody's downgraded TurboCombustor yet again due to tight liquidity and weak credit metrics due to the firm's high leverage, a signature PEU move.