Bail it out, or leave

LG.Philips Displays halted production of CRT television screens at its plant in the town of Hranice on Fri., and ODS was quick to jump on this as an example of why investment incentives are a failure. It claimed that the company was shutting down the plant just as its tax breaks were expiring, but CzechInvest said that the investor had not yet become eligible for a tax holiday. The main reason for the shutdown, it seems, was the parent company's poor planning with regard to flat-screen TVs. In shutting down its Czech unit, the investor might try to avoid returning Kč 1.3bn in other incentives. The incentive program in this instance would only be a failure if the CR couldn't recoup the money. The government should send a signal to LG Electronics and Philips - two of the world's largest companies - that they won't be welcome here if they renege on their joint venture's contractual obligations. ODS can lead the charge against them. [Czech Republic Korea Netherlands JV foreign direct investment]