Is EIT Going to Shut Down?Posted: February 3, 2013
Recent layoffs of approximately 200 workers plus some managers have led to increased speculation that EIT is going out of business.
EIT is a privately held company heavily subsidized by public money. It was purchased for $65 million from IBM in 2002 and the purchasers committed to putting another $35 million into the business. The State paid 84% of the purchase price and there is some question as to whether the owners put in any of the $35 million in improvements or any money at all. Banks that extended credit for the purchase would only do so if IBM continued to lease some space and that the IBM’s lease be assigned to the banks. From 2002-2005 EIT received an additional $23 million in property tax credits from the Empire State Development Corporation for the maintenance of the 1900 jobs that were transferred from IBM.
More Public Support
Through the Broome County Industrial Development Agency (BCIDA), the developers received a 50%, ten year tax reduction, an elimination of the County mortgage recording fee and elimination of any sales tax for equipment and furnishings. Another NYS subsidy cut the company’s electric bill by two thirds. An additional $5.8 million in Federal grants went to EIT. These funds were given away by our public officials to well-connected privateers who promised to keep 1900 jobs at EIT. EIT
employment figures are now estimated to be below 1,000 and yet there has been no pay back to the public nor have any of the politicians who orchestrated this deal asked the owners for the return of the public funds. For the poor this would amount to massive welfare fraud. For those “connected” people it is business as usual.
EIT and a Chinese Connection
According to the Central NY State Business Journal, EIT is partnering with a Chinese firm, Hong Kong based, Meadville Technologies Group to manufacture its CoreEZ organic subtrates. “Their infrastructure, skilled work force, and world class manufacturing facilities ensure excellent product quality and afford the best value to our customers world-wide” states James McNamara Jr. EIT President and Chief Executive Officer.
Who Profited from This Deal?
What has this partnering meant for the EIT workforce and taxpayer? What has all of the public financial support meant to the taxpayers and workers who pay the taxes? The only way the public will know about the total financial commitment, jobs retained and profits received is to have the books of EIT opened to the public. After all it appears to be a public company with private owners.