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

100 Best Green Workplaces in Oregon

June 2015
Friday, May 22, 2015
BY KIM MOORE

As momentum grows at the state level to introduce far-reaching environmental regulations, such as carbon pricing and the Clean Fuels Program, Oregon employers continue to go the extra mile to create green workplaces for their employees.


Read more...

Oregon businesses face destruction from future earthquake

The Latest
Wednesday, May 20, 2015
htctthumb1BY KIM MOORE | RESEARCH EDITOR

An earthquake would completely destroy many Oregon businesses, highlighting the urgent need for the private and public sectors to collaborate on shoring up disaster preparedness, said panelists at an Oregon Business breakfast summit today.


Read more...

Downtime with John Helmick

June 2015
Tuesday, May 26, 2015
BY JACOB PALMER

Live, Work, Play: CEO of Gorilla Capital.


Read more...

Green workplace 2.0

Linda Baker
Thursday, May 28, 2015
IMG 2808BY LINDA BAKER | EDITOR

Reinventing capitalism. Office dumpster divers. Handprints versus carbon footprints.


Read more...

Department of Self-Promotion

Linda Baker
Wednesday, June 17, 2015

061715-awards1Oregon Business wins journalism awards.


Read more...

Urban renewer

Linda Baker
Wednesday, June 24, 2015
UnknownBY LINDA BAKER   

One year after he was appointed chair of the Portland Development Commission, Tom Kelly talks about PDC's longevity, Neil Kelly's comeback and his new role as Portlandia's landlord.


Read more...

Modern design defines new Portland indoor market

The Latest
Thursday, June 25, 2015
thumbSnøhetta JBPM exterior www mir noBY KIM MOORE | RESEARCH EDITOR

An international architecture firm known for its design of the National September 11 Memorial Museum Pavilion in New York unveiled its plan this week for a modern indoor/outdoor food market at the foot of the Morrison Bridge in downtown Portland.


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