As a shareholder, I'm not sure how to take this......
Gov. Scott Walker: Give Kimberly-Clark Foxconn-style deal to keep paper plants open
Jason Stein, Milwaukee Journal Sentinel Published 4:31 p.m. ET Feb. 5, 2018
MADISON - Wisconsin Gov. Scott Walker called Monday for giving paper maker Kimberly-Clark some Foxconn-sized job incentives to avoid the closure of plants in Neenah and Fox Crossing.
As Democratic lawmakers were announcing their own Kimberly-Clarke plan, the GOP governor called for passing legislation to allow the state to give the paper company the same level of tax credits per job as Foxconn.
Walker and Republicans in the past said they were willing to provide unprecedented tax credits to Foxconn because the deal with the high-tech company would be "transformational" for the state's economy. Walker is now saying he's willing to provide similar incentives for an industry that, while critical to the state, has shed thousands of jobs in recent years.
More than 600 people are employed at the plants owned by Kimberly-Clark, the maker of Kleenex tissue and Huggies diapers with deep roots in Wisconsin.
Kimberly-Clark previously announced a plan to cut as many as 5,000 jobs and to close or sell 10 plants globally. The cuts represent about 12% to 13% of the company’s work force and there could still be more job losses in Wisconsin, where Kimberly-Clark also has a plant in Marinette and a consumer products headquarters in Neenah.
The Neenah factory makes non-woven fabric products and will be shut down within the next 18 months, according to Kimberly-Clark. The closure date has been determined yet for the Cold Spring plant, which makes Depend adult diapers.
Walker sent out his tweet as Fox Valley Democrats separately called for helping keep the Kimberly-Clark plants open by providing $60 million — or 2% of what could be spent on Foxconn. Under the proposal, the state would provide $30 million each for two revolving loan programs, one to help mills invest in energy and water efficiency and another to help mills shift from making white paper products to brown ones.
“I understand marketplace dynamics; I know that industries change. But I also understand that if the state of Wisconsin can muster $3 billion for a (Taiwanese) company, it can spare (two) percent for one of its own,” Outagamie County Executive Thomas Nelson said in a statement.
Foxconn Technology Group of Taiwan secured up to $3 billion in tax credits to open a flat screen plant in Racine County that could cost as much as $10 billion and employ up to 13,000 people.
Foxconn could receive more than eight times as much per job as similar 2017 deals. To provide those credits lawmakers and Walker had to pass legislation last fall.
The Foxconn legislation expanded existing state incentives known as enterprise zones, which require companies to demonstrate investments and job creation before getting state tax credits.
Typically, an enterprise zone employer must first pay workers at least $30,000 a year to qualify for jobs tax credits. The credits phase out for salaries above $100,000.
State taxpayers agreed to cover 17% of these qualifying Foxconn salaries instead of the usual 7%. Walker proposed legislation Monday that would also allow Kimberly-Clark to receive 17 cents back for every $1 it pays in qualifying wages at the two plants.
“Retaining outstanding Wisconsin companies like Kimberly-Clark is just as important as attracting new companies to our state, which is why I’m proposing we offer larger tax credits to ensure the company keeps those 600 jobs where they belong — in Wisconsin," Walker said in a statement.
As manufacturers in Wisconsin, both Foxconn and Kimberly-Clark pay little to no corporate and personal income tax on profits from those operations. That means that any potential enterprise zone credits could end up being paid to each company in cash if it has little tax liability.
Forestry, paper making and printing have long been important to Wisconsin's economy but changes in the industry and consumer habits have had a substantial impact on the sector. Fifteen paper mills in the state have shuttered since 1994, with 20,000 jobs lost since 2001.
Each paper-mill job supports several more positions as the industry has a deep supply chain for making its products.
= new reply since forum marked as read
