Bayer Corp. CEO Greg Babe urged West Virginia business leaders to push for judicial and tax reform during Wednesday's state Chamber Business Summit.
More than 700 people are attending the business conference this week at The Greenbrier resort.
WHITE SULPHUR SPRINGS -- West Virginia must overhaul its business tax structure and reform its judicial system to spur economic development and attract investment, Bayer Corp. CEO Greg Babe told state business leaders Wednesday.
Babe, who oversees Bayer's North American operations, said West Virginia's tax on inventory and equipment penalizes businesses that want to expand and spend money to upgrade facilities.
"It boils down to this: Unless the state modifies its tax structure, it will fail to attract significant capital investment," Babe said Wednesday at the West Virginia Chamber of Commerce's annual Business Summit. "It's a 19th-century tax approach that doesn't work in a 21st-century economy."
In January, Gov. Joe Manchin introduced a bill to free businesses from taxes on inventory and equipment, but the legislation died in the state Senate. County officials opposed the bill, saying it would reduce tax revenues.
Also Wednesday, Babe said West Virginia's lack of an intermediate appeals court has stifled business growth and investment across the state. The state Supreme Court is now West Virginia's only appeals court. Earlier this year, the Supreme Court proposed new rules to address the issue, but the changes didn't go far enough, Babe said.
"There's no right of appeal, and the West Virginia Supreme Court didn't change that with its rules," said Babe, a West Virginia native who works out of Bayer's Pittsburgh office. "I fear we won't be able to grow our manufacturing sector, or it could lead to further erosion of our manufacturing industry in West Virginia."
Supreme Court Chief Justice Robin Davis has said that an intermediate appeals court is a waste of time and money.
Bayer has three plants in West Virginia: Bayer MaterialScience facilities in New Martinsville and South Charleston; and a Bayer CropScience plant in Institute. The Bayer facilities employ more than 1,000 workers.
Babe acknowledged Wednesday that his company mishandled the aftermath of the 2008 Institute plant explosion and fire that killed two workers. The explosion prompted new concerns about the facility's stockpile of methyl isocyanate, or MIC, the chemical building block that killed thousands of people in a 1984 lead from a Union Carbide plant in Bhopal, India.
"We did not handle the issue after it happened," Babe said, referring to the company's failure to give Kanawha County emergency officials prompt details about the explosion. "We did not handle the situation well during and after the incident."
Babe said the company was working hard to improve safety at the Institute chemical plant and restore the community's trust. Bayer has brought in a new management team to run the Institute plant.
"We're taking a cold, hard look at any weaknesses we can find," said Babe, a West Virginia University graduate.
WHITE SULPHUR SPRINGS -- West Virginia must overhaul its business tax structure and reform its judicial system to spur economic development and attract investment, Bayer Corp. CEO Greg Babe told state business leaders Wednesday.
Babe, who oversees Bayer's North American operations, said West Virginia's tax on inventory and equipment penalizes businesses that want to expand and spend money to upgrade facilities.
"It boils down to this: Unless the state modifies its tax structure, it will fail to attract significant capital investment," Babe said Wednesday at the West Virginia Chamber of Commerce's annual Business Summit. "It's a 19th-century tax approach that doesn't work in a 21st-century economy."
In January, Gov. Joe Manchin introduced a bill to free businesses from taxes on inventory and equipment, but the legislation died in the state Senate. County officials opposed the bill, saying it would reduce tax revenues.
Also Wednesday, Babe said West Virginia's lack of an intermediate appeals court has stifled business growth and investment across the state. The state Supreme Court is now West Virginia's only appeals court. Earlier this year, the Supreme Court proposed new rules to address the issue, but the changes didn't go far enough, Babe said.
"There's no right of appeal, and the West Virginia Supreme Court didn't change that with its rules," said Babe, a West Virginia native who works out of Bayer's Pittsburgh office. "I fear we won't be able to grow our manufacturing sector, or it could lead to further erosion of our manufacturing industry in West Virginia."
Supreme Court Chief Justice Robin Davis has said that an intermediate appeals court is a waste of time and money.
Bayer has three plants in West Virginia: Bayer MaterialScience facilities in New Martinsville and South Charleston; and a Bayer CropScience plant in Institute. The Bayer facilities employ more than 1,000 workers.
Babe acknowledged Wednesday that his company mishandled the aftermath of the 2008 Institute plant explosion and fire that killed two workers. The explosion prompted new concerns about the facility's stockpile of methyl isocyanate, or MIC, the chemical building block that killed thousands of people in a 1984 lead from a Union Carbide plant in Bhopal, India.
"We did not handle the issue after it happened," Babe said, referring to the company's failure to give Kanawha County emergency officials prompt details about the explosion. "We did not handle the situation well during and after the incident."
Babe said the company was working hard to improve safety at the Institute chemical plant and restore the community's trust. Bayer has brought in a new management team to run the Institute plant.
"We're taking a cold, hard look at any weaknesses we can find," said Babe, a West Virginia University graduate.
He also reiterated Wednesday that the Institute plant plans to phase out a pesticide called aldicarb by December 2014. A U.S. Environmental Protection Agency study recently found that the pesticide posed "unacceptable dietary risks, especially to infants and young children."
Babe said Bayer was evaluating whether the decision to end production of the pesticide would affect jobs at the Institute facility, which has 700 workers.
"We remain committed to that site," Babe said. "We will continue to invest in that site. We believe it will be a world-class industrial park."
Babe said Manchin and state economic development officials have made significant progress in improving West Virginia's business climate, but "there is more work to be done."
"Let's begin now to remove the barriers," he said. "Let's redouble our determination. Bayer wants to be part of that in West Virginia."
Earlier, Manchin said there were positive signs that "West Virginia's economy is starting to move."
As examples, he cited an announcement Wednesday by NGK Spark Plugs that it's consolidating North American manufacturing operations at its Sissonville plant. Manchin also mentioned the Boy Scouts of America's plan to build a high-adventure base and Jamboree center in Fayette County.
The governor said he has high hopes for creating jobs at the West Virginia Education, Research at Technology Park (the former Dow Tech Park in South Charleston). The state has agreed to take over more than 250 acres at the tech park.
"It's going to be something big," Manchin said.
About 700 people are attending the West Virginia Chamber's annual conference at The Greenbrier resort, which has hosted the event every year since 1948. The conference ends Friday.
Reach Eric Eyre at erice...@wvgazette.com or 304-348-4869.
