Word: hysterical
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With just about everybody competing for factories that bring jobs, corporations ordinarily shop around for the best financial incentives before deciding where to locate. But Hyster Co., a forklifl manufacturer based in Portland, Ore., has carried this game a step further and used it for decisions about existing plants. The result: a high-stakes game of musical chairs in which the stingiest locality loses its Hyster plant when the music stops...
...Hyster (1982 estimated sales: $415 million) had spectacular growth in the 1970s before its business began to fall off. Like those of other heavy equipment makers, its profits have been shrinking because of Japanese competition and the slowdown in capital spending. Last year company officials decided that they had to cut capacity and modernize their aging factories. After winning $60 million in grants and tax abatements from the Irish government to open a plant in County Dublin, they decided to try some arm-twisting Stateside. Shunning pretense, Hyster applied for grants from five states where it already operates plants...
...tactic worked. Illinois quickly promised $10.2 million in federal and state grants, and union workers offered $4 million more in concessions. Alabama Governor George Wallace told his state development office to "do whatever is necessary" to keep Hyster in the state. Officials in Kentucky huddled with the company to work out a contract...
...Oregon, Hyster's home state, balked. Said Governor Victor Atiyeh: "I had to control my anger." Replied Hyster Chairman William H. Kilkenny: "We are in a life-or-death struggle with Japanese manufacturers. What we are asking for is peanuts compared with what we're getting in other states and countries." Eventually Oregon offered to buy $20 million in Hyster preferred stock, and the local union proposed contract concessions worth $7 million. But Hyster, which sought an outright state gift of $5 million to $6 million, rejected the stock deal as "not meaningful," and claimed the union overvalued...
Earlier this month, Hyster announced that the game was over, and Oregon had lost. "With great reluctance," said Kilkenny, Hyster would phase out a 53-year-old Portland plant, furloughing about 300 workers. In response to Hyster's ploy, the other states kept their plants when the music stopped but it cost them a cool $24.1 million...