Delaware Business Blog

Newark Chrysler Plant Loses Moventas

Carol A. Overland, an attorney in Minnesota reports that Moventas is building a wind turbine gearbox manufacturing facility in Faribault, Minnesota. This company is in the middle of a nearly $145 million worldwide expansion.

She laments the cost of securing the facility …

• Corporate franchise tax exemption;

• Income tax exemption for operators or investors;

• Sales tax exemption on goods and services used in the zone;

• Property tax exemption on commercial and industrial improvements, but not the land;

• Wind energy production tax exemption;

• Employment credit for high-paying jobs.

And properly points out that the municipality will receive little to pay for infrastructure and schools.

The volume of the giveaway indicates what Newark is up against as it tries to secure a good owner for the Chrysler plant on Rt. 896. The State of Pennsylvania recently lured Gamesa, a Spanish company, with almost $20 million in grants and loans for its factory in Fairless Hills and another in western Pennsylvania. The Fairless Hills facility also is exempt from state and local property taxes until 2019. They will make wind turbine assemblies at the plant they took over from a steel manufacturer.

But as Ms. Overland points out

What about that Chrysler plant in Newark, Delaware that’s soon to be closed? Time for some wind manufacturing in the U.S.!

What about indeed? If these operations are economically viable, why do municipalities need to spend so lavishly to lure the manufacturing plants? If these are such high tech, green jobs, why are foreign firms leading the way? Questions that the new administration in both Dover and Washington will wrestle with, no doubt.

One thought on “Newark Chrysler Plant Loses Moventas

  1. Carol Overland

    Minnesota’s Gov. is a rabid “no new taxes” guy, and does all he can to eliminate corporate taxes, with giveaway programs like JOBZ. Jobs, jobs, jobs is the hue and cry, but when they allow companies in by eliminating taxes that cover the costs inherent in business, where are we but setback with costs that residential taxpayers will have to cover. It’s really not that much different than Delaware, with its low corporate taxes that aren’t covering expenses (infrastructure, schools for employees’ kids, police & fire, etc). How did Fredrick, Maryland get the BP/Solarex plant? Let’s try approaching this from a position of power and resources rather than rolling before we’re even out the gate. We can attract companies here, particularly wind companies based overseas, because this is a big wind market and manufacturing here would cut out a number of price-increasing middlemen. If we stop falling over each other with competing handouts and keep the playing field level, there is enough to go around. The east coast will need turbine manufacturing soon. Why not the Chrysler plant? Are the economic development hustlers of Delaware contacting every wind turbine manufacturing company world wide? If not, get to it!

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