In Racine, SC Johnson and Company announced plans to lay off 200 employees on Friday. Is that because of a downturn in business or related supply-and-demand issue? Not exactly.
SC Johnson has had five years of record sales and profits, and the fiscal year that ended June 30 was its best ever, Semrau said. But she said the consumer products industry is changing fast and SC Johnson is trying to position itself better to compete with its main competitors: Procter & Gamble, Unilever, Clorox and Reckitt Benckiser.That's right, SC Johnson is letting 200 people go so they have to get more cash to pay for mergers. Nothing to do with production or efficiency, just to hoard profits to buy out other companies.
"There are two ways to do what we do: You invent the brand or you buy a brand," [spokeswoman Kelly]Semrau said. "... But sometimes acquiring is faster and better because people already know about it."
Buying other companies is expensive, however, and SC Johnson is trying to set aside more cash for future acquisitions, she said.
And this may stun you, but SC Johnson doesn't just use those record profits to buy up companies, but also to pay big bucks for DC lobbyists and politicians. According to Open Secrets, SC Johnson's corporation and employees gave more than $295,000 to DC lobbyists in 2012, and more than $75,000 to Congressional candidates in the 2012 election cycle. SC tends to spread around their political campaigns, giving about 3/4 to Republicans and 1/4 to Democrats, and $3,500 of those funds found their way to the guy who "represents" Racine in Congress, Paul Ryan.
That type of lobbying paid off for SC Johnson in 2005, when Purty Mouth Pau-lie promoted a bill suspending import taxes on certain products to help SC Johnson's profit margins.
"I rise today to introduce legislation on behalf of SC Johnson, a family-owned and family-managed company," Ryan stated in prepared text inserted into the Congressional Record. "The company is a global manufacturer and marketer of a broad range of well known consumer household brands including Windex, Raid, Glade, Pledge, Edge shaving gel, Ziploc and Scrubbing Bubbles. SC Johnson has 12,000 employees worldwide and 3,000 employees located in Racine, WI."I also coudn't help but notice that in the same day that the report of SC Johnson's layoffs came out, 47 million Americans got a reduction in food stamp benefits. And if Rep. Ryan and his fellow House Republicans had their way, several million more lower-income people would see further cuts to food aid and related programs.
Ryan then got down to the air-freshener business. "The two bills that I am offering today will help accomplish this important objective by suspending duties for multiple components of unique air freshener products that are imported from abroad and incorporated into finished products assembled by SC Johnson in the United States," he stated. "One of the devices is a continuous-action device that pumps fragrance throughout a room. The other device is plugged into an electrical outlet and diffuses warmed fragrance throughout an area. No comparable products are produced in this country. Suspending the tariffs will bring down SC Johnson's costs of doing business at home."
Put the SC Johnson layoffs together with its lobbying successes and the War on the Poor, and is it really a surprise that the top 1% got 11.2% richer between 2009 and 2011, while the other 99% got 0.4% poorer? Is it really a surprise that the Dow Jones industrial average is up 136% since March 2009, while at the same time, median household income is DOWN 4.4%. When you have a government and corporate system that emphasizes paper wealth over real jobs, and use tax and spending policy to benefit campaign contributors over citizens, this is a natural result. Trickle-down? More like "funneling up".
It's the type of politics that raises demand for one product in particular- guillotines.