Monday, August 31, 2015

More layoffs from another WEDC "job creator"

We got a reminder today of how the failures of the Wisconsin Economic Development Corporation (WEDC) continues to waste taxpayer dollars by giving away funds to companies that not only go back on their promises of creating jobs, but watch those businesses cut jobs instead.

The story comes out of Pewaukee, where a manufacturer with multiple locations in Wisconsin won't make some of their products in the state any more.
Eaton Corporation, Pewaukee – Approximately 83 employees will be affected by permanently discontinuing the manufacturing of its Molded Rubber Products product line at Eaton Corporation, 1045 Hickory Street, Pewaukee. The Waukesha, Ozaukee, and Washington (WOW) Development Board and DWD TAA/TRA staff will provide assistance to the affected workers.
If the name Eaton Corporation rings a bell, it should, because they have been a central figure in one of the series of scandals involving the Scott Walker-created WEDC. Remember this story from last year?
A 27 News investigation has uncovered that both the Eaton Corporation and Plexus Corporation received millions of dollars in financial awards from WEDC, only to later lay off workers whose jobs were taken by employees at the companies' foreign facilities.

In 2011, WEDC awarded Eaton Corp. with up to $1 million in tax credits if the company met job creation and retention goals at its manufacturing facility in Menomonee Falls. WEDC officials say the company has received $190,000 in tax credits so far.

In April of 2013, Eaton laid off 163 employees at its Cooper Power Systems plant in Pewaukee and announced it was moving those jobs to Mexico. Less than a year later, WEDC awarded Eaton Corp. with up to $1.36 million in additional tax credits for a proposed $54 million expansion at that same Pewaukee plant. But on Wednesday, WEDC Spokesperson Mark Maley told 27 News Eaton Corp. "recently notified WEDC it will not seek any tax credits for this project."
So much for that expansion, eh? You may also remember that Eaton also put workers in Watertown out of a job earlier this year, less than two months after Walker and WisGOP Legislature pushed through (right-to) work-for-less legislation, which proponents claimed would save manufacturing jobs (but never seems to stop outsourcing).
Eaton Corp. announced last week it is permanently discontinuing the manufacture of printed circuit boards at its facility in Watertown, which will result in the elimination of 93 employees there.

"We first informed employees in April 2014, one year ago, that we would be moving the Printed Circuit Board (PCB) line from Watertown and consolidating it into another existing facility in Tijuana, Mexico," Eaton Corp. Spokesperson Ann Marie Halal told 27 News. "These actions are in response to ongoing business and market conditions and a continued challenging business climate. They will allow the business to continue to compete globally and meet market demand."
Oh, and now Eaton is laying off 83 more jobs in Pewaukee as they stop manufacturing a certain product line in Wisconsin. Wanna bet those jobs also end up in another country?

And no, there hasn't been any major change in policy at WEDC regarding having recipients of their handouts not outsource jobs, despite then-WEDC Board Chair Scott Walker claiming before the 2014 election that they would. Instead, Walker bailed out of being the WEDC Board Chair, and the majority oligarchs have refused to make any major moves. So as a result, Dem Reps Andy Jorgensen and Deb Kolste joined with State Sen. Dave Hansen in introducing a bill 3 weeks ago that would prevent companies from getting state aid for 5 years if they pulled a routine like Eaton did- getting tax write-offs and then outsourcing Wisconsin jobs. Not surprisingly, the GOP-run Legislature has refused to schedule a hearing for this bill, and they likely will bury it for the rest of the 2015-17 session (so much for righties being "fiscal hawks").

These Eaton layoffs are happening less than two weeks before the Joint Legislative Audit Committee has a hearing to follow up on yet another damning audit of the agency that came out in May. These findings convinced the GOP-run Legislature to turn down Gov Walker's budget request for more funding and reduced oversight of WEDC's responsibilities, and eventually led a panicked Walker to sign off on legislation to fire himself as the WEDC Board Chair, in a cagy way to try to dodge what is clearly and out-of-control tire fire.

We also found out last week that current WEDC CEO Reed Hall is quitting his job (though it won't stop him from taking a taxpayer-funded "trade trip" to Japan before he leaves), and you have to wonder if the upcoming audit and these layoffs are a "last straw" that's encouraging him to get out. Or if something much worse is lurking beneath that'll rear its head in the coming months.

Regardless, these Eaton layoffs are a reminder of the ongoing failure of the "hand out and hope" business model that Scott Walker and the WisGOP Legislature made when they created WEDC. It's also a reminder that you can't trust these companies when they make these "job announcement" plans, and need to make sure they actually construct the building and hire the people they say they would. A nice press release with a politician is nowhere near acceptable enough.

I wonder if any enterprising national reporters might ask presidential candidate Scott Walker what he thinks about companies that outsource, given Eaton's actions of today, and in recent years. And they might want to ask Scotty how that WEDC model is working in a Wisconsin that remains last in the Midwest for job growth.

1 comment:

  1. Awesome, as usual. I wonder how profitable Eaton is. They obviously want the cheapest labor they can find, which is always the GOP excuse to bash workers who make a dollar too much. It would be interesting to know what their profit margin was/is and just how greedy they're being here. You know, outside of the immorality of it all.