Austin tech employers promise to add jobs, investment for tax breaks

May 15, 2014
Austin American Statesman


Two Austin tech employers are promising millions in investment and hundreds of new jobs, in exchange for state tax breaks


The Austin City Council is set to vote next Thursday on designating Flextronics America and Spansion as Enterprise Zone Projects under the Texas Enterprise Zone Act. That designation would allow the companies to get refunds on their state sales and use taxes


In return, Flextronics has committed to creating 300 new jobs and anticipates $15 million in investment. Spansion has agreed to more than $200 million in investment over the next five years


Dusty McCormick, economic and business liaison for the city of Austin’s Economic Development Department, said the city staff feels “very positive about both nominations.”


“Both provide a value to the city: one in the form of pure investment, the other in the form of job creation,” McCormick said


Flextronics’ commitment to add jobs “hits at the very core of what we try to do, which is job creation,” he said. “And I would not sneeze at all at the investment amount (from) Spansion.”


Flextronics made news last year, when Apple confirmed that its new Mac Pro computers would be built at the Flextronics Americas factory in Northwest Austin


Flextronics’ production of the Mac Pro could generate another 1,700 jobs if all goes to plan, according to a presentation the Singapore-based company filed with Travis County officials in October


In an application to designate its Austin factories as a foreign trade zone, Flextronics said it would hire 879 people for a “next-generation desktop computer” project. If the project hits peak targets, the company said, it could hire as many as 815 more workers here


Under the proposed agreement with the Austin City Council, Flextronics agreed to hire 300 employees at an average annual wage of more than $30,000. It would also invest $15 million in machinery and equipment. In return, the company, would be able to obtain a refund of up to $1.25 million in state sales tax


Chip manufacturer Spansion is headquartered in Silicon Valley, but has a substantial manufacturing operation in Austin, where it employs about 860 workers


In addition to investing more than $200 million to improve manufacturing facilities and capacity, Spansion agreed to retain its existing jobs in Austin. The company would also be able to obtain a refund of up to $1.25 million in state sales tax


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