Machinery makers see potential in President Bush's proposed business tax incentives but expressed concern about how the rebates may benefit them.
As proposed in January, the tax rebate allows businesses to write off 50 percent of new investments for plant and equipment. Exhibitors at Plastec West, held Jan. 29-31 in Anaheim, provided their perspectives in interviews at the show and by telephone.
A tax rebate can be ``a double-edged sword,'' said Rich Sieradzki, vice president of North American sales for Husky Injection Molding Systems Ltd. in Bolton, Ontario.
Converters and processors ``are looking for something more sustainable,'' and companies need to evaluate their own situations and the impact of a tax rebate, Sieradzki said.
In each end market and competitive situation, a tax rebate might be more attractive to larger operations and probably less attractive to smaller firms, he said.
Any rebate ``only applies to companies that are profitable,'' cautioned Jim Moran, vice president of North American sales for York, Pa.-based Engel Machinery Inc.
Usually, a processor wants equipment with the best value, and the possibility of a tax rebate is ``not often part of the sales'' discussion, Moran said.
Husky's Sieradzki and Engel's Moran pointed out that a tax rebate program earlier in the decade did not significantly impact equipment sales in the United States.
``You don't hear about it,'' Sieradzki said.
``We saw little or no impact on the sale of new equipment,'' Moran recalled.
Arburg Inc.'s Friedrich Kanz praised the potential tax rebate's ``positive spirit'' vs. ongoing discussions about a recession.
``I think it is a good thing, and I hope it goes through,'' the president of the Newington, Conn.-based firm said. He noted the importance of incentives ``to help people buy equipment.''
Toshiba Machine Co. America's Michael Werner said: ``Any tax rebate provides advantages for new equipment manufacturers in a negative market.'' Werner is technical sales manager for Elk Grove Village, Ill.-based Toshiba's plastics machinery division.
A rebate may generate sales of ``more technologically advanced equipment to molders wanting to be competitive,'' he said.
The availability of a tax rebate would make the decision easier for a processor to buy equipment, according to Liam Burns, general manager of Negri Bossi USA Inc. in Newark, Del. He made the conclusion after conferring with customers from three different markets, automotive components, high-end office furniture and writing instruments.
``If they make a profit, it makes good sense to invest,'' Burns said.
Darrel Hill, national sales manager for Boy Machines Inc. of Exton, Pa., said the proposed tax rebate, if enacted, ``is going to increase sales'' and benefit Boy, which mainly sells equipment at prices of less than $100,000.
Hill said a profitable processor may wait until the end of the year and make a tax-deductible purchase after consulting with an accountant. The alternative: Pay taxes on the profit.