Thursday, December 13, 2018

Scotty couldn't give Kimberly-Clark "Foxconn 2", so he'll settle for a $28 mil WEDC handout!

And here I thought Scott Walker was delaying his ultimate signature of the Lame Duck bills because he wanted to cowardly bury the news before Christmas. Turns out there was another scheme that intervened.



Sure enough, by this afternoon Walker, Appleton-area Sen. Roger Roth, WEDC CEO Mark Hogan and the Kimberly-Clark bigwigs were announcing a deal. Here’s what Walker’s office released as far as what was in that agreement.
To ensure that Kimberly-Clark remains in Wisconsin, WEDC is awarding the company up to $28 million in state income tax incentives over the next five years. The full amount of credits can be earned if the company retains all of its 388 employees through 2023 and makes at least $200 million in capital investment at the Cold Spring facility over that time. The company can also earn tax credits based upon how much it purchases in goods and services from Wisconsin companies.

The tax incentives are performance-based, which means the company must first carry out the terms of the agreement and provide supporting documentation before it can receive any tax credits.
So AT LEAST an average of $5.6 million a year, and I’d also like to see how the other incentives work, and how much more we might on the hook for in purchases that K-C would likely have made anyway if it stayed open.

The WEDC Board met in a closed-session teleconference this afternoon, and from what I can tell, this deal is not much different from your typical WEDC handout that just needs approval by its right-wing stacked board.

The Milwaukee Journal-Sentinel reminded us of how we got here, what could have been lost, and what would remain under this agreement.
Kimberly-Clark officials have said they planned to close facilities in Neenah and Fox Crossing as part of a global restructuring and would change course only if they received state subsidies. As of earlier this year, the company employed 110 people at the Neenah facility and about 500 at the Fox Crossing facility, which is known as the Cold Spring plant.

State officials have said they have seen no way to save the Neenah nonwovens facility but believed an incentive package could preserve the Cold Spring plant.

Under the new plan, the company would keep the Cold Spring plant open and close one in Conway, Ark. In exchange for up to $28 million in taxpayer funds, Kimberly-Clark would invest as much as $200 million in its Cold Spring plant and retain 388 workers there.
So we’re letting Kimberly-Clark close 1 facility, shed more than 200 jobs, AND get $25 million? Gee, can I get a deal like that for that level of "growth"?

Who needs to add jobs and improve your business?

Quick aside – why wasn’t a package like this considered and signed before the election, instead of the failed attempt to give K-C a Foxconn-style deal (well, other than giving a cover for the WisGOP's Power Grab, of course)? I seem to recall some dope mentioning this possibility back in August, when Walker and WEDC handed out a similar $60 million deal to GOP donors at Green Bay Packaging.

As we consider this deal, let me remind you that Kimberly-Clark continues to benefit from corporate tax cuts resulting from the GOP’s Tax Scam in DC. In addition, K-C also is eligible to use the state’s M&A giveaway to manufacturers, which helps explain why the corporation has paid a total of $1 in state income taxes over the last 4 years.

Let me also note that Kimberly-Clark is also going to extract sizable concessions from the unionized workers at these plants, as Maureen Wallenfang of the Appleton Post-Crescent described for us in August. While the employees that are allowed to stay appear to get minor ratification and retention bonuses, many of them will be losing out due to the other wage cuts included in the contract.
A “grandfathered” pay scale, for example, was eliminated for those with the most seniority at the 25-year-old plant.

The grandfathered group, estimated to include at least 90 workers, make over $30 an hour. Their pay will slide down to $27.03 per hour with the new agreement. For some, the reduction will slash more than $6 an hour from paychecks, chopping about 20 percent.

Another chart shows that a worker just starting in operations is currently making $22.89 an hour. That pay will decrease more than 12 percent to $20 an hour, and stay there through 2020.

The tentative agreement shows all pay rates will be frozen for three years. Sundays and holidays that are currently paid as double time will instead pay time-and-a-half. Other than Christmas and Christmas Eve, holidays could be mandatory, based on the discretion of the company. Shift differentials were eliminated.
In addition to the general decline of the paper industry, it looks like K-C has other difficulties it's going to have to deal with.



And yet despite all of these tax and wage cuts, and the fact that this recall was putting K-C in a much weaker position, Walker, Roth and WEDC want to throw this corporation ANOTHER $28 million over the next 5 years. And now incoming Guv Tony Evers is going to be stuck with another corporate welfare albatross that takes resources away from other needs.

In light of today’s Kimberly-Clark handout, the northeastern Wisconsin county executive who called for action to help the area’s struggling papermakers asked a legitimate question – where does this “business practice” of taxpayer-backed extortion end?
"This is great news for the workers. Especially this close to Christmas," said Outagamie County Executive Tom Nelson. "But there are still questions that need to be answered. And I am not the only one asking them. What does this mean for the long term? What does this mean for the rest of the industry? What do we do when the next company threatens to shutter a plant?"
This scam is exactly why the WisGOP Legislature wanted more control over WEDC, to keep the taxpayer-backed slush fund moving along. ENOUGH!

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