Memphis Business Journal: EDGE Delays XPO Tax Break Request After Rep. Steve Cohen Urges Scrutiny


By Jacob Steimer  – Lead Reporter, Memphis Business Journal Aug 20, 2020, 7:24am CDT

When a couple Teamsters union members learned on Friday that XPO may be incentivized to add 255 jobs in Memphis, they took notice.

New York Times report in 2018 alleged that XPO treated workers poorly at a Memphis facility, with multiple pregnant women having miscarriages after asking for lighter duty.

“We have serious concerns about XPO, based on their past performance, specifically in the Memphis area,” Teamsters strategist Dan Willett told the MBJ. “They take the low road, with respect to jobs.”

The union reached out to U.S. Rep. Steve Cohen with its concerns. On the morning of Wednesday, Aug. 19, Cohen sent a letter to the Economic Development Growth Engine (EDGE) for Memphis & Shelby County and its chairman Al Bright.

Cohen’s letter referenced the New York Times story and asked that the payment-in-lieu-of-taxes (PILOT) decision — scheduled for the afternoon of Aug. 19 — be delayed.

“I implore you to extend the application timeline in order to best understand how XPO has already impacted the Shelby County community,” Cohen wrote. “If the company is unwilling to be transparent about worker safety, job quality, long term plans to invest in the community and giving workers a voice at work, they should not be once again trusted to protect workers in our community.”

The EDGE board chose to pull the XPO item from the Aug. 19 board meeting, and Bright said he expects it come back to the board in September.

After the meeting, Bright said it was Cohen’s letter and MBJ’s Aug. 17 article about the PILOT that led EDGE to make the decision. Bright said he was unaware of the New York Times investigation until reading about it in the recent MBJarticle.

An XPO spokesman told the MBJ in response to its Aug. 17 story that the originalNew York Times story had “a lot of misinformation,” and that the company has since enacted a new pregnancy care policy that covers nearly 1,000 XPO facilities and 50,000 employees nationwide. He declined to comment on Cohen’s letter.

Bright said it’s the first time he’s ever heard from a congressman about an EDGE incentive and the first time such allegations against an applicant have been brought to his attention. 

“My immediate hope is to understand what is happening within the company and specifically in Memphis and then just go from there,” Bright said. “We’re trying to understand what has actually transpired between the 2018 article and today at XPO.”

In an interview for the Aug. 17 article, EDGE president Reid Dulbergersaid the XPO PILOT made sense because the “awful” events alleged in the 2018 article are uncharacteristic for the company. 

“They’ve got seven facilities in Shelby County. … I believe if they were uniformly treating people badly, we would know,” Dulberger said.

He also said the 255 jobs that would be created by the new XPO proposal are particularly crucial, given the current state of the economy.

“If the local economy is booming, then we might be a little bit stingier with local incentives. While being so may cost us a project if we miscalculate, other projects will come along,” Dulberger said. “We’ve taken some real hits because of the COVID-19 pandemic. … The ability to attract 255 jobs paying $17 per hour is more important today than it was a year ago.”

James Jones, president of Teamsters Local 667, told the EDGE board during the meeting that he wants more information about the types of jobs XPO is planning to bring. The company’s application listed a $34,000 average salary but did not detail the salaries of management versus other workers. Bright told MBJ he plans to obtain that information. 

“We’re not opposed to jobs,” Jones said. “We’re opposed to companies that make a profit off of Memphis and do not respect their employees.”

If approved, the 10-year PILOT would abate about $4 million in taxes.