Plastics company joins firms canceling or changing contracts in Gov. Perry’s enterprise fund

By Kelley Shannon, AP
Wednesday, September 1, 2010

Plastics company cancels job creation contract

AUSTIN, Texas — A plastics compounding company operating in eastern Texas has canceled its state job creation contract, joining other businesses that have quit or changed their pacts under the Texas Enterprise Fund.

Alloy Polymers ended its enterprise fund contract on July 9, citing “business reasons,” said Lucy Nashed, spokeswoman for Gov. Rick Perry. She said the company paid back with interest the $100,000 in taxpayer money it had received so far under the $200,000 agreement.

“The state received all the money back,” Nashed said.

A governor’s office list of enterprise fund grant recipients states Alloy Polymers was to have created 52 new jobs in Houston County as part of the 2006 agreement.

Nashed referred further questions about the reasons for the cancellation to the Virginia-based company. An Alloy Polymers official familiar with the Texas agreement did not immediately return a call Wednesday. In addition to its plant in Crockett in Houston County, Alloy Polymers also has a Texas operation in Orange.

It’s not the first company to scale down or cancel its enterprise fund agreement since the recession hit. For more than two years the AP has tracked the problems of companies receiving state enterprise fund grants.

One of the biggest companies to quit its enterprise fund agreement was mortgage giant Countrywide Financial Corp. It was taken over by Bank of America, which canceled Countrywide’s $20 million contract with the state in December after Countrywide failed to meet its job creation deadlines.

In January, in response to AP inquiries, the governor’s office revealed that 11 job creation contracts were changed to make them more favorable to the companies and give them more time to create jobs. In May, the AP reported that Perry’s office had rewritten three more contracts for companies that were struggling to create the promised number of jobs after receiving taxpayer dollars.

Perry, a Republican seeking a third full term, frequently talks up his record on job creation in his re-election bid against Democrat Bill White. Perry champions the Texas Enterprise Fund as a deal-closing account used to lure businesses to the state.

White and Perry’s GOP primary opponent, U.S. Sen. Kay Bailey Hutchison, have criticized Perry’s oversight of the enterprise fund. But Perry credits the fund with creating a some 53,000 new jobs in Texas and generating $14.4 billion in capital investment.

The Alloy Polymers website describes the company as a compounding services firm in the thermoplastics industry. Its products are used in the automotive, medical equipment, electronics and other industries. Compounding is a step in the manufacturing of plastics.

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