This story ties in with my last post in that it illustrates the real-world results of Obamanomics. Although this was an Illinois state-funded project – not federal – it’s a noteworthy example of what happens when progressives start throwing our money around ~ Taxpayer-Subsidized Railcar Plant Closes After Six-Year Run.
 
Remember all that stimulus money thrown away on green technology? (Example after example after example) This project was yet another ill-conceived waste of taxpayers cash ~

The plant opened in 2012 after Illinois officials offered Nippon Sharyo an incentive package worth more than $4.7 million, including training funds, grants, and corporate tax credits. Additionally, the Illinois Department of Transportation spent $5.5 million to build a rail spur to the new factory.
 
State Rep. Tom Demmer, R-Dixon, says it’s not the ending anyone wanted.
 
“It’s really unfortunate to see,” Demmer said. “Both the local and state government did a lot to try to bring in Nippon Sharyo in the beginning. I don’t think we can look at this and say it was a very ideal outcome. Certainly not happy with the fact they lasted only six years there.”
 
Demmer says there is no mechanism in place for the state to attempt to recover any of the tax credits or grants awarded to the company.

 
 
Jason Anderson, economic development director for the city of Rochelle prefers to look on the bright side. He argues that despite the closure, the community retains some benefits ~

“As a result of Nippon Sharyo, we built about $11-million of rail on the city of Rochelle railroad system. And today, our rail system is at its capacity with all the industry built around it,” Anderson said. “Nippon Sharyo spent hundreds of thousands of dollars training people from the ground up in machining and welding and parts manufacturing. All these companies in northern Illinois looking to hire trained workers have hired these people.”

 
But was it worth $10 million?

At its peak, Nippon Sharyo employed about 600 workers at the location, but layoffs began in 2015 after failed safety tests on certain cars. The company also was fined $19,550 that year by the Occupational Safety and Health Administration for exposing workers to dangerous conditions.

 
When a business’s risk of failure is mitigated by subsidies, or tax credits, or interest-free loans from the government, doesn’t it follow that its compulsion for success isn’t going to be quite as strong as it would otherwise be? Where’s the incentive for cost-efficient production if there’s not that much (of your own money) at stake? Additionally, the whole process of handing out deals to favorite businesses or industries simply encourages more unethical lobbying and cronyism.

The motto of this tale: When the government tries to pick winners, we all lose.