Kyocera Says It Is Studying Idea of Building New San Diego Plant
Kyocera International, a manufacturer of industrial ceramics, may build a “fairly large” manufacturing plant in San Diego now that the state has reformed its controversial unitary tax system, the San Diego-based company said Tuesday.
It is the second international company to reveal expansion plans after action late last month by the Legislature to reform the tax. Sony International announced plans a week ago to invest $30 million in a San Diego television-set plant and to build a $10-million Western regional headquarters in Cypress.
Both Sony and Kyocera have been among the 16 or so companies that have actively opposed the unitary tax in Sacramento.
With 1,600 manufacturing and management employees in San Diego, Kyocera is in the “very initial stages of studying new investment or expansion opportunities in the United States,” according to Kyocera spokeswoman Laura Elfenbein. San Diego “will be one of the locations that will be studied, but we have no definite plans yet.”
Kyocera has “no timetable” for the new plant, according to Elfenbein. “We’ve got a team of people studying expansion opportunities on a national basis and now they’re considering (locations in) California and San Diego.”
Kyocera International, which is owned by Kyocera Corp., based in Kyoto, Japan, has not decided on the plant’s size or how many jobs would be created, according to Elfenbein. However, according to wire reports, a Kyocera official in Tokyo said on Tuesday that the plant would be built in San Diego.
The state Legislature recently reformed the state’s unitary tax system that drew fierce opposition from Japanese companies such as Kyocera and Sony, which operate in California.
Under the unitary tax system, the state taxes the worldwide profits of a company rather than just the company’s profits in California or the United States. The compromise from Sacramento gives international companies the choice of the unitary tax or a 0.03% fee imposed on their assets, payroll and sales in California.
In 1984, Kyocera announced plans to build a manufacturing plant in Vancouver, Wash., and said the unitary tax was a prime reason why the plant was not built in California. The company had instituted a “self-imposed suspension on any new investments at our California operations,” Elfenbein said. “We now have lifted that suspension.”
In January, Kyocera opened the new facility in Vancouver and subsequently closed an outdated manufacturing plant in San Diego.
Will Continue Fight
However, Kyocera will not drop a 14-year administrative battle with the State of California to recoup $30 million in “unjustified” tax and interest payments accumulated between 1972 and 1983, according to Rod Lanthorne, vice president of finance.
Kyocera will also fight to eliminate unitary tax payments and interest charges that will be accrued between 1983 and 1987, according to Lanthorne.
“Kyocera will continue to pursue administrative opposition to the state’s unitary tax,” Lanthorne said. “We’ve paid about five times what we think we should have paid to California because of the unitary tax.”
Kyocera moved to its building on Balboa Avenue in 1975 when the company relocated to San Diego from San Jose. It has two plants in that building that manufacture ceramic semiconductor packages that are used in the electronics industry and a pair of Sorrento Valley plants that manufacture chip capacitors.
