A struggling economy tends to draw more hope for big new employers, but a Butler Economics professor said job announcements that make big promises can often turn into big bets gone bad.
"A lot of these companies are suspect to say the least," said Butler Economics professor Bill Rieber.
The latest example is Enerdel, whose electric car batteries generated fanfare and federal support for more than 1,400 new green jobs in Indiana. Now, NASDAQ has suspended parent company Ener1 from trading.
"It certainly suggests that the prospects are not good for the company," Rieber said. "The share price, the last I checked, was under ten cents."
The Department of Energy said it's monitoring Enerdel closely after awarding it a $118 million grant to expand in Indianaplis and add jobs. Though the jobs haven't developed, $55 million has been paid out.
The Indiana Economic Development Corporation offered Ener1 $21 million in tax credits, and up to $200,000 in training grants.
Despite the commitment from the state, Secretary of Commerce Dan Hasler said Indiana is protected. He released a statement Monday saying, "These incentives are conditioned upon jobs created."
Though Indiana doesn't stand to lose much financially, Rieber said it's risky for government leaders to stand behind Enerdel and other unproven companies like Litebox, who's main investor has drawn intense scrutiny after promising to bring more than 1,000 jobs to Indy despite a questionable past.
"When the governor and the mayor are there suggesting that this seems to be a good deal for the state, implicitly they're suggesting that this is a pretty good bet for others as well," Rieber said.
If the gamble doesn't pay off, he said the public always loses.
"If the firm doesn't do well, it's not just the investors you lose, it's the people who commit to that particular company to work for them, maybe move here, and then if things don't go well they end up losing also," Rieber said.
So far, Carbon Motors stands as another example of a job announcement that has yet to produce jobs. Several years after promising to manufacture a next-generation police car in Connersville, the company is still awaiting approval of a $310 million federal loan to start production.