Why did WisGOP want to bail out Kimberly-Clark, but didn't help Appleton Coated reopen?

Two Fox Valley paper manufacturers that announced large amounts of layoffs amid “restructuring” last year have very different tales to tell when it comes to the state of their business. It also led to two very different (and suspicious) reactions in Madison by the GOP-controlled state government.

The first case involves Appleton Coated, which shut down its mill last Fall when its owners went bankrupt, putting the future of the facility up in the air. But in recent months, things have turned around at the mill in a good way. This includes a new owner, a new name (Midwest Paper Group) and some of the laid-off workers coming back on the job making new products to be more competitive.

The plant in the village of Combined Locks shut down in October while the owners went through receivership.

Outagamie County Executive Tom Nelson praised the re-start.

"Make no mistake, Appleton Coated’s turnaround will be remembered as one of the biggest grassroots economic success stories in a long time," Nelson said, creating union members for attending receivership hearings in September and helping convince a judge, and the new owners, that the mill was still viable.

Now, months later, 230 of them are back on the job. Most of the workers are in the union and worked at the mill, where 600 people used to be employed, for years before it closed….

The name is not the only thing that is changing at the mill. Workers will still make free sheet coated paper used for stationery or in printers but they are also making "brown paper" that can be turned into cardboard. Brown paper is more in demand because of online shopping and shipping.

It's alive!

Compare the Appleton Coated situation with another Wisconsin paper products company that recently announced layoffs at their facilities - Kimberly Clark. K-C just reported their earnings this week, and they sure didn’t sound like a company that was struggling just to hang on.

Kimberly-Clark Corporation KMB reported first-quarter 2018 results, with the top and the bottom lines improving year over year. While earnings were in line with the Zacks Consensus Estimate, sales exceeded the same for the third consecutive period. In fact, strong performance across key market locations prompted management to raise sales view for 2018. Further, the company's cost-saving efforts are also praiseworthy and significantly aided the company's performance in the reported quarter.

On the flip side, the company's performance continues to face challenges from rising input costs. This has been marring investors' optimism in the stock, which has declined 16.4% in the past six months compared with the industry 's fall of 12.8%...

Kimberly-Clark's sales advanced 5% to $4,731 million and surpassed the Zacks Consensus Estimate of $4,599 million. Favorable currency movements benefitted sales by 3%. Additionally, organic sales improved 2%, driven by a 3% increase in volumes and marginally offset by a 1% decline in net selling prices.

Within North America, organic sales in consumer products increased 3%, while it climbed 2% at K-C Professional. Internationally, organic sales advanced 2% across the developed market locations, while it rose 1% in developing and emerging markets.

Adjusted operating profit inched-up 0.7% to $824 million. Results were aided by higher volumes, favorable currency translations worth close to $20 million as well as reduced spending on marketing, research and general spending. Further, operating results also gained from cost savings of $90 million from the Focused On Reducing Costs Everywhere (FORCE) program. These upsides were partially offset by lower net selling prices as well as increased input costs on account of greater costs of pulp and other raw materials.

Yes, other analysis indicated that K-C’s profit margin is declining due to these price pressures, but that report shows the company is still in relatively healthy shape, with their products still in demand.

So if their bottom line is still doing well, and they plan on selling more this year, why was our Legislature thinking about giving Kimberly-Clark the “Foxconn giveaway package”? It’s couldn’t have anything to do with WMC’s support of this type of corporate welfare, could it?

Also interesting is that the United Steelworkers were also asking last week for a vote on the Kimberly-Clark bailout. Not because they necessarily support the bailout, but because K-C is making the workers try to take on pay concessions, and why should the USW workers at the K-C mill have to take concessions if the corporation is going to get bailed out?

The contrast is telling to me – GOP legislators wanted to jam through a bailout of Kimberly-Clark, but Tom Nelson the only one visibly working to get Appleton Coated reopened and rehiring as Midwest Paper. Why didn’t we hear a word from the GOP Legislature or Scott Walker’s WEDC on Appleton Coated’s situation, which seemed to be a more legitimate business issue and economic disruption to the Fox Valley than K-C’s corporate greed?

Remember when conservatives claimed that government and tax dollars shouldn’t be used to “pick winners and losers”? That sure isn’t true in this case, and it’s far from the only time we’ve seen preferential treatment in the Age of Fitzwalkerstan.