Over at NPR they have a story about a solar panel manufacturing company that is leaving Massachusetts to manufacture thier solar panels in China. By itself, a manufacturing company leaving Massachusetts is not big news, but that this was an extremely well-subsidised company is what makes it an interesting story.
To convince Evergreen Solar to locate in Massachusetts, the state offered them rent-free space at a former Army base that was converted to office space, waived years of potential tax revenues, built special infrastructure to accomodate them (roads, etc.), and awarded them cash grants. Now having grown from 100 to 800 employees over the last three years, the company suddenly realized it was even cheaper to manufacture their solar panels in China despite all the gifts from the state.
Amazingly, many in the state feel they should have given the comapny more, much like a battered wife thinks if she just “loved her abuser more” they would stop.
Some are questioning the idea that the Government should be in the venture capital business, underwriting new and expanding enterprises on the backs of the taxpayers with very little recourse should the companies decide to relocate down the road.
From the article:
Evergreen’s CEO Michael El-Hillow agrees, saying U.S. manufacturers cannot compete with companies in China that get far more government support.
He says Washington needs to do more to nurture fledgling industries, including changing government procurement policies to require buying American, and easing bank regulations and import duties that put American manufacturers at a disadvantage.
“It’s also the role of government to make jobs for our citizens — our children,” El-Hillow says. “That’s their role. Or let’s acknowledge that we’re going to lose in the job creation stream.”
But others scoff at the notion of a company that was given so much looking for even more. “It sort of has remarkable chutzpah,” says Harvard University economics professor Edward Glaeser.
He says government should not be in the business of playing venture capitalist in the first place. And, Glaeser says, Massachusetts officials should have known better than to believe that a manufacturing plant could make it in such a high-cost labor market.
New York Times: Why Green Energy Can’t Power a Job Engine
Financial News Online: Evergreen Solar to be featured at Solar Power International