Businesses need greater demand for tax break to work best
The Atlanta Journal-Constitution
A few years ago, before the recession kicked in, a 100-percent federal tax deduction on new plant and equipment investments would've been just the ticket for Robert Gredys.
The founder and president of Marietta-based Safeplay Systems could have used the break to buy equipment to help him make more of the company's recycled plastic playground equipment.
Even if President Barack Obama's latest proposal to boost business and stimulate the economy gets congressional approval, however, Safeplay isn't likely to be able to take advantage of the offer, which would run through 2011.
"In that time frame, I don't see the need for additional capacity," said Gredys, who launched Safeplay in 1990. "That program is going to have no effect on me. I have to stabilize the business and keep the same number of employees I have, and keep them busy before I think about growth."
The eco-friendly firm had experienced steady growth over most of its two decades before the economy went into a nosedive. The number of employees has been reduced from the mid-30s to 17 currently, as regular customers including schools, day care centers, parks and churches have pulled back on a purchase that can run from $4,000 to as much as $400,000.
These days, he said, it seems as if only the federal government is spending.
It's not that potential customers aren't interested in Safeplay's products, Gredys said, it's just that they're not buying. Many are asking for price quotes and, "our phone is ringing. But they don't pull the trigger."
If things were better, Gredys said, he would definitely take advantage of the credit.
"Oh, absolutely," he said. "No question. We would have updated, bought new equipment. Technology changes all the time."
Gredys even keeps a list of equipment he would buy. A new motor that might cost $40,000 is on it.
"But there has got to be demand," he said. "If the business were booming and you could borrow against your line of credit, or the banks were lending, you could justify making a capital investment. But in the current economy ..."
He added, "The idea is a good idea, but I'm not sure about the timing."
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