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February 13, 1997updated 05 Sep 2016 1:08pm

FUJITSU SEES DOWNSIDE OF INWARD INVESTMENT BRIBES

By CBR Staff Writer

The backwash of the disruption caused by temporary over-supply of memory chips is spreading far and wide, and the latest to feel it are the burghers of Multnomah County in the Portland, Oregon suburbs. Their problem is that when the Fujitsu Microelectronics Inc arm of Fujitsu Ltd was looking for a site for a vast new $1.3bn memory chip plant, they offered the company $23m in tax breaks to build it alongside its existing plant in Gresham, but in return, they demanded a commitment that it would create 445 new jobs at the site. But there is no demand for the 4M-bit parts currently made at Gresham, and rather than expand output at the site, Fujitsu now wants to put the existing plant into mothballs, and move the entire existing workforce of 630 into the new plant, turning them straight on to fabricating next generation 64M-bit parts, where they could become the first in the world to make 64Ms in volume. But first, Fujitsu wants to be released from the job creation commitment and has thrown itself in the mercy of the county. Multnomah County Commissioner Tanya Collier told Reuters that lawyers were studying penalty clauses in the contract, and stressed that the purpose of the 15-year concession, under which Fujitsu would have invested $12m in community service fees and training, child care and housing, was to get unemployed people off welfare and onto a career path. Fujitsu says it has already spent more than $1m on low income housing and community-college training courses, and believes that the contract is anyway void because it has not yet actually received any tax breaks, which do not cut in until the plant enters production.

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