OGDEN — Northrop Grumman Corporation will expand its Weber County operations and create thousands of new jobs over the next two decades, the Utah Governor’s Office of Economic Development announced recently.
The security and defense company already employs more than 5,100 Utahns, according to a news release from the office; the expansion will create up to 2,250 additional jobs in the next 20 years.
In the news release, Governor’s Office of Economic Development executive director Val Hale said the expansion “could create jobs for Hill Air Force Base for generations to come.”
Greg Manuel, Northrop Grumman’s vice president of ground-based strategic deterrent enterprise, said in the release the company is “proud to expand our presence in Utah by bringing new, high-paying jobs to the state."
Under the terms of Utah’s Economic Development Increment Finance tax credit, Northrop Grumman may earn back up to 30% of the new state taxes it would pay over the 20-year life of the agreement. The post-performance tax credit is paid incrementally each year as the company meets the criteria of its contract with the state, the release says.
The tax credit will not exceed $59,919,439.
Governor's Office of Economic Development deputy director Ben Hart said Thursday that corporate incentives and tax rebates "sometimes get a negative reaction from people."
"But the reality is ... we're helping to provide a lot of jobs for a lot of people," Hart said. "And I think that's something we can't lose sight of."
Hart said the state has been making "a lot of efforts to attract more aerospace companies," and that Utah may be positioned better than any other state to grow its aerospace industry.
"These things definitely do not just happen," Hart said. "It's been a lot of effort, the state's promotion of workforce and new workforce programs" in addition to the education system and the state's production of high-tech composite materials for construction.
Chanel Flores, the economic development office's aerospace and IT cluster director, said the expansion announcement "continues the legacy" of Hill Air Force Base and the aerospace industry in northern Utah.
"I think what we're seeing is just a large growth opportunity within that sector," Flores said. "I think having Hill Air Force Base here allows us that opportunity, it creates that multiplier effect."
She said Utah's Northrop Grumman employees will work on exciting and cutting-edge projects like the Air Force's Ground Based Strategic Deterrent, or GBSD, missile program, as well as the F-35 fighter jet.
The Governor’s Office of Economic Development estimates that the Northrop Grumman expansion will generate nearly $200 million in tax revenue, almost $4.5 billion in wages and $380 million in capital investment.
Hart said that companies interested in performance-based tax rebates go through "a pretty rigorous application process" that helps the office determine what their project's impact will be.
In Northrop Grumman's case, he said, "the impact was very, very apparent in a positive way."
He called the estimate of new wages a "tremendous" number that's "at the heart of what this incentive program is really meant to do" — create higher wages and better opportunities for Utahns.
“This is a significant win for Northern Utah,” Theresa A. Foxley, president and CEO of the Economic Development Corporation of Utah, said in the release. “Northrop Grumman is the state’s largest private-sector employer in aerospace and defense, and they continue to demonstrate their confidence in doing business here. On a broader level, we as Utahns can be proud of what this means in terms of national defense and global security.”
The economic development office also announced last Friday that Procter & Gamble will expand its operations in Box Elder County and create up to 221 new jobs in the next 20 years. P&G may earn back up to $4,191,954 in a post-performance tax credit agreement with the state.