Wisconsin Public Radio

Kimberly-Clark, Unions, Push for Subsidy

State Senate lacks votes to approve $70 million subsidy for 400 jobs.

By , Wisconsin Public Radio - Nov 15th, 2018 11:01 am
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Roger Roth. Photo from the State of Wisconsin Blue Book 2015-16.

Roger Roth. Photo from the State of Wisconsin Blue Book 2015-16.

Representatives from Kimberly-Clark Corp., unions and local officials urged state lawmakers Wednesday to approve a roughly $70 million tax incentives package for the company before the end of the year.

The “Foxconn-style” incentives package is aimed at preserving about 400 jobs at its Cold Spring facility in Fox Crossing near Neenah. The company announced plans to close that and another nearby facility in January. One facility will close, but the Cold Spring plant could remain open, pending a deal with the state.

“This could be a defining moment,” Dean Kaufert, mayor of Neenah, told the state budget committee. “Don’t turn your backs on these jobs.”

Under the deal, the consumer products giant would receive tax credits of 17 percent on employee wages and 15 percent on capital expenditures. The company would also be exempt from the state sales tax on capital expenditures for five years. The Legislature’s nonpartisan budget office originally estimated the deal would cost up to $109.5 million over 15 years. With only one plant remaining open, that estimate declines to roughly $70 million, according to the office’s formula. The money would be paid out directly from the state, as the company has no income tax liability under state law.

“This is a work family, this is a community, and these are people trying to make a difference in their lives with family supporting jobs,” said David Breckheimer, president of the area United Steelworkers Union.

The facility employs about 388 people. Kimberly-Clark said it plans to add 52 new jobs if the deal is approved and invest about $110 million in facility improvements over the next three years.

To remain eligible for the deal, the company would have to retain at least 93 percent of its employees at the Fox Crossing facility and statewide. It has a number of other facilities scattered through Wisconsin, employing roughly 3,000 people.

Gov. Scott Walker proposed the state incentives package in February. It passed the state Assembly later that month, but never received a vote in the state Senate because it didn’t have the necessary support.

The plan needs 17 votes to pass the Senate.

Sen. Roger Roth, R-Appleton, who sponsored the bill, said Wednesday that Senate Republicans still don’t have enough GOP support to pass the bill. Republicans hold an 18-15 majority in the body, but three Republicans have publicly voiced their opposition.

In his testimony, Roth defended the plan against pushback, some of which has focused on the deal’s similarly to the state’s $4.5 billion deal with Foxconn. Opponents argue approving a Foxconn-style package could set a bad precedent for the state.

“This is not Foxconn,” Roth argued. “This is different because (Foxconn) was a foreign business, built on the potential of what could be, these are very tangible (jobs), they are here right now in our state.”

Roth and other supporters also pointed out that the plant’s supply chain supports about 230 businesses throughout Wisconsin.

The GOP senator said he hoped the bill could pass with bipartisan support.

However, Sen. Jon Erpenbach, D-Middleton, said Democrats haven’t been included in conversations about the bill.

“You say you want Democrats at the table, we don’t even know where the table is,” Erpenbach said.

Opponents to the proposal also argue it is too expensive and too risky for Wisconsin taxpayers.

“I am not convinced that this is the right thing for the state to do,” said Sen. Luther Olsen, R-Ripon.

While a number of Kimberly-Clark employees testified before the committee in favor of the measure, Karmen Jones, who has been employed at the Cold Spring facility for 37 years, testified against it. She said she believes the deal is an example of “corporate greed,” and doesn’t want lawmakers to support that, even if that leads to her losing her longtime job.

“It’s corporate blackmail,” Jones said of the incentives package. “Either you do this, or we’ll leave the state, either you do this or you won’t have a job.”

Jones said she and other Kimberly-Clark employees could easily find employment elsewhere in the state, if the plant closes.

“Right now, there are good paying jobs out there,” she said. “Thank God.”

Gov.-elect Tony Evers indicated he would be open to negotiations on the plan earlier this year, but said Wednesday he doesn’t have enough details to have a position now.

“I’m monitoring it. And we have to make sure that we’re in the right place,” Evers told reporters after an event in Coloma, Wisconsin. “But I have not seen the copy of the bill that they’re going to be talking about, so I’m not going to take any position on the bill at this time.”

State Sen. Majority Leader Scott Fitzgerald, R-Juneau, said if enough support is gathered in the state Senate for the plan, a vote will likely be held in the Senate later this month.

Listen to the WPR report here.

Kimberly-Clark Corp. Workers, Local Officials Urge Lawmakers To Approve State Incentives was originally published by Wisconsin Public Radio.

More about the Kimberly-Clark Plant Closings

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