October 20, 2018

How a Company Actually Plans to Spend Its Tax Cut Money

Workers at its quarry in Southern California blast limestone out of the ground once a week. They then load it into trucks, crush it, combine it with other minerals and heat it to 3,000 degrees in a giant kiln until it rains down like lava into a cooler.

After being ground up, the cement that emerges travels to concrete plants, which operate a bit like massive bakeries — whipping the powder together with sand, more rock and water to form concrete. By law, the company has just 90 minutes to move that mud from one of its 100 concrete plants into the foundation of a building. CalPortland’s proprietary mix has gone into the Hoover Dam, Los Angeles City Hall and the football stadium being built for the Los Angeles Rams and Chargers.

Ryan Montgomery, whose father and grandfather worked here in Oro Grande, spends most days scooping limestone into a dump truck. “It may get a little bumpy,” he says, before breaching a wall of boulders that shakes his cab, perched a healthy 30 feet from the ground.

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His loader — a sunflower yellow Caterpillar vehicle with an arm attached to an oversize shovel — costs $2.3 million. Replacing a pair of tires is a $50,000 expense, and the transmission goes for $130,000. The company leased the vehicle from a bank.

Quicker expensing for tax purposes would not prompt CalPortland to make an upfront purchase of Mr. Montgomery’s loader.

“Getting the money back faster definitely helps, but that’s big money, and that big investment means we have to be able to have the cash or the financing available,” Mr. Regis said. The company is slowly replenishing its bank account after six years — from 2008 to 2014, a period bridging a housing bust and a fragile economy — in which it did not turn a profit.

On the rise once more, CalPortland is making new bets on its future that will take years to pan out. The company is planning, for example, to buy new equipment that will wash clay and dust off rocks so they can eventually be turned into concrete and asphalt.

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Article source: https://www.nytimes.com/2017/12/03/business/economy/tax-cut-companies.html?partner=rss&emc=rss

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