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180,000 reasons to thank a small manufacturerPosted by Gino DiCaro, VP, Communications on Aug. 15, 2008
Bishop-Wisecarver Corp. purchased it for $180,000 more than they would have paid in other states because of California's lack of a sales tax exemption on the purchase of manufacturing equipment.
I was in Bishop-Wisecarver's Pittsburg, California facility this week on a plant tour, where this $3 million, 50-ton "grinder" was bought and placed to process extremely precise linear steel guides that help other manufacturers move product from one place to another. Think of an automobile manufacturer that has to move a large suspended transmission through its facility acreage. There's a good chance that those engines are guided through the air by Bishop-Wisecarver's products and this grinder helps them produce those materials faster and better.
Competitive pressures are increasing for Bishop-Wisecarver and its 56 employees in California. According to company President Pamela Kan, it was those pressures that made them purchase this $3 million miracle machine that makes them more productive. Shouldn't they be rewarded for making the sacrifice to compete in California's costly business climate? Instead they are faced with cost pressures that force them to buy more efficient equipment, then the State collects 6 percent on top while other states allow these highly coveted companies to keep the tax because of the larger economic benefits they produce for the region.
This decision would have been easier to make before the State's manufacturers investment credit expired in 2003. I can't speak for Bishop-Wisecarver, but the additional $180,000 could have gone into more employees, more salary, more benefits, more research and development, more electricity efficiencies, or price reductions to help make Bishop-Wisecarver more competitive in the marketplace.
I don't know which line item this money would have bolstered, but a $15 billion State budget deficit tells me that, wherever it went, it would have had better economic impacts supporting the hard working employees of Bishop-Wisecarver, its 466 California suppliers and even BWC's consumers than it would have had buffering the State's checking account. 180,000 "thank you's" go out to Bishop-Wisecarver and it's owner Bud Wisecarver (Bud's story) and President Pamela Kan for making the sacrifice! On another but similar note, buying equipment will be much easier for the much ballyhooed Tesla Motors who received the 6 percent credit through an end-around detailed in the Governor Schwarzenegger's press release. Why only them? Who knows.
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