Home Archives December 2008 Goodies can’t hold Hynix or Freightliner

Goodies can’t hold Hynix or Freightliner

| Print |  Email
Monday, December 01, 2008

STATEWIDE The meticulously designed SolarWorld facility that has brought hundreds of new jobs to Hillsboro did not come for free. State and local officials courted the German multinational with a plate heaped with incentives, topped by a $20 million business energy tax credit. Were it not for multiple subsidies, SolarWorld would not be cranking out solar panels in the Silicon Forest and Oregon would not have a booming new sector with seven manufacturers established and more being wooed.

Clearly incentives are useful, even essential, for jump-starting promising industries and attracting new business. But what about their staying power? How much do incentives help in the long run?

Hynix Semiconductor was Eugene’s largest employer when it announced this summer that it would close its plant and eliminate 1,400 jobs. The blow is doubly painful because Hynix benefited substantially from the state’s largesse. Hynix received $58.5 million in property tax abatements from 1998 to 2006. The company also gained from two $250,000 grants for worker training, one administered through Lane Community College and the other paid directly to Hynix.

Hynix was eligible for huge property tax breaks because it operated within one of Oregon’s 59 Enterprise Zones, which enable local governments to waive property taxes to woo businesses. Daimler/Freightliner, which recently announced plans to stop manufacturing trucks in Portland and eliminate at least 900 jobs, also was located within an enterprise zone.

But Freightliner never applied for e-zone tax breaks. The company received $1.45 million in workforce training grants and $207,000 in pollution control tax credits through an environmental program that has been discontinued, but compared to Hynix the company dined lightly at the trough.

The difference between Freightliner and Hynix is, Freightliner was built in Portland and later purchased by a German company, whereas Hynix was lured here. In the end, though, their stories are not so different. No amount of incentives could have kept them manufacturing in Oregon. The decisions were made in Germany and South Korea respectively, and the reasoning had nothing to do with loyalty or government programs. Freightliner is leaving to manufacture closer to its East Coast market and Hynix left to concentrate on more profitable computer chips than it was making in Eugene.

The closure of the Portland truck plant and a similar one in Ontario, Canada, are expected to improve Daimler’s earnings by $900 million per year by 2011.                                   

BEN JACKLET


Have an opinion? E-mail This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

 

More Articles

The 100 Best Companies survey is open

News
Friday, October 24, 2014

100-best-logo-2015 500pxw-1How does your workplace stack up against competitors? How can you improve workplace practices to help recruit and retain employees? Find out by taking our 100 Best Companies to Work for in Oregon survey!


Read more...

Innovation: a critique

News
Wednesday, October 08, 2014
1008 innovation thumbBY LINDA BAKER | OB EDITOR

A Design Week panel discussion raises questions about how innovative we really are.


Read more...

Woman of Steel

November/December 2014
Wednesday, October 22, 2014
BY LINDA BAKER

Tamara Lundgren tackles the challenges—without getting trampled.


Read more...

Reimagining education to solve Oregon's student debt and underemployment problems

News
Thursday, November 13, 2014
carsonstudentdept-thumbBY RYAN CARSON | OP-ED CONTRIBUTOR

How do we skill up our future technology workforce in a smart way to take advantage of these high-paying jobs? The answer shouldn’t focus only on helping people get a bachelor’s degree.


Read more...

The Bookseller

November/December 2014
Wednesday, October 22, 2014
BY AMY MILSHTEIN

Everyone knows college is expensive, but a look at the numbers brings that into sharp — and painful — focus.


Read more...

Three problems with Obama's immigration order

News
Wednesday, November 26, 2014

BY NISHANT BHAJARIA | OP-ED CONTRIBUTOR112614-immigration-thumb

By now, anyone who knows about it has a position on President Obama’s executive order on immigration. The executive order is the outcome of failed attempts at getting a bill through the normal legislative process. Both Obama and his predecessor came close, but not close enough since the process broke down multiple times.


Read more...

Election Season

November/December 2014
Wednesday, October 22, 2014

We didn’t intend this issue to have an election season theme. But politics has a way of seeping into the cracks and fissures.


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS