Nippon Sharyo announces 100 layoffs, despite $10 million in state subsidies and tax credits

Nippon Sharyo announces 100 layoffs, despite $10 million in state subsidies and tax credits

Nippon Sharyo points to prototype difficulties and unspecified business concerns as the main reasons behind the layoffs.

Nippon Sharyo Manufacturing, LLC, a Japanese railcar manufacturer, announced Jan. 17 plans to lay off 100 workers at its Rochelle-based plant, according to NBC affiliate, 13 WREX. The layoffs come after ongoing technical problems in the development of a new prototype railcar. Nippon Sharyo also stated “other business concerns” as a reason for the layoffs, 13 WREX reported.

Nippon Sharyo employs a total of 350 workers at the Rochelle facility. The remaining workers will continue to work on other ongoing projects.

However, Nippon Sharyo is not in Rochelle for free.

Since 2010, Nippon Sharyo has received over $10 million in state subsidies and tax credits. Despite this massive advantage from lawmakers at the expense of other taxpayers, the company has made layoffs something of a tradition, as Nippon Sharyo announced mass layoffs in 2015 and 2016 after failing crush tests, 13 WREX reported.

Nippon Sharyo has also made news for workplace safety issues. The Occupational Safety and Health Administration investigated the company for various worker-safety complaints, and in August 2015, Nippon Sharyo was fined $19,550 for exposing workers to dangerous conditions, according to the Chicago Tribune.

Nippon Sharyo’s latest announcement and shoddy record are just further proof that state tax credits and subsidies are not reliable ways to create and sustain jobs. In addition to shifting the burden onto taxpayers and giving Nippon Sharyo an unfair edge over other manufacturers, bribing companies to locate within the state is no guarantee for consistent jobs.

Illinois has some of the highest property taxes in the nation and has the highest workers’ compensation costs in the Midwest. The Prairie State also lacks a Right-to-Work law, making it less competitive than the other 27 states that have passed Right to Work. In the wake of the November election results, more states appear to be going in this direction. Kentucky has already passed statewide Right to Work and it appears as though Missouri is about to follow suit, meaning that soon Right-to-Work states may surround Illinois’ borders.

If Illinois lawmakers are really serious about growing the manufacturing sector, they need to pass pro-growth reforms to make Illinois more competitive, not dole out taxpayer dollars and special favors to a few politically connected companies.

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