Home Back Issues December 2008 Goodies can’t hold Hynix or Freightliner

Goodies can’t hold Hynix or Freightliner

| Print |  Email
Archives - December 2008
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

A Good Leap Forward

September 2014
Wednesday, August 27, 2014
BY AMY MILSHTEIN

Agriculture businesses ramp up to meet international demand as workforce and succession challenges loom.


Read more...

The Alchemist

September 2014
Tuesday, August 26, 2014
BY LINDA BAKER

David Howitt explains why Portland consumer brands like Stumptown and Voodoo Doughnuts are taking the world by storm.


Read more...

Podcast: Testing for Emotional Intelligence with John Hersey

Contributed Blogs
Friday, September 19, 2014
ivbU3sIXBY TOM COX | OB BLOGGER

How can you tell if you, a peer, a subordinate or a job candidate has the emotional intelligence needed to do well?


Read more...

Poll Wrap-Up

News
Friday, August 15, 2014

2014 NewPoll-report-newsletterthumbIn this week's poll, we asked readers: "Who should pay for the troubled Cover Oregon website?" Here are the results.


Read more...

Buyer's Remorse

September 2014
Tuesday, August 26, 2014

Parents and students paying for college today are like homeowners who bought a house just before the housing bubble burst.


Read more...

Community colleges and sustainability

Contributed Blogs
Thursday, July 31, 2014
sustainabilityBY MARY SPILDE | OB GUEST CONTRIBUTOR

Faced with the aftermath of the “great recession,” increasing concern about the environment and dwindling family wage jobs, we have some very important choices to make about our future.


Read more...

How to add positivity to your team

Contributed Blogs
Friday, September 12, 2014
happy-seo-orlando-clientsBY TOM COX | OB BLOGGER

I often talk about what leaders can do. What about followers? If you’re a team member and you’d like to add positivity to your team, what might you do?


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