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

Two sides of the coin

Contributed Blogs
Monday, August 25, 2014
0825 thumb moneyBY JASON NORRIS | OB GUEST BLOGGER

Ferguson Wellman’s investment views on the economy and capital markets.


Read more...

Managing family assets: The importance of planning ahead

News
Friday, August 22, 2014
Unknown-1BY CLIFF HOCKLEY |  OB GUEST CONTRIBUTOR

When business intersects with family, a host of  situations can arise. Without a clear vision and careful planning, hard-earned investments can become stressful burdens.


Read more...

Podcast: Turn Things Around with David Marquet

Contributed Blogs
Friday, October 17, 2014
davidmarquet thumbBY TOM COX | OB BLOGGER

How can you move from a command-and-control leadership model to one of true empowerment and accountability? David Marquet did, and he took notes along the way.


Read more...

Startup or Grow Up?

September 2014
Tuesday, August 26, 2014
BY JON BELL

Startup culture is all the rage. Is there a downside?


Read more...

Downtime

September 2014
Wednesday, August 27, 2014
BY JESSICA RIDGWAY

How State Representative Julie Parrish (House District 37) balances life between work and play.


Read more...

College Hacker

September 2014
Wednesday, August 27, 2014
BY KLINT FINLEY

Treehouse CEO Ryan Carson builds a 21st-century trade school.


Read more...

The Rail Baron

October 2014
Thursday, September 25, 2014
BY LINDA BAKER

Oil is gushing out of the U.S. and Canada, and much of it is coming from places that don’t have pipeline infrastructure. So it’s being shipped by rail.


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