MacIver News Service

By M.D. Kittle

MADISON – While there has been a big political push to pass a $100 million bailout to keep two Kimberly-Clark plants open, the proposed deal has its critics from inside the northeast Wisconsin factories. 

One corporate insider calls the incentives package, inspired by the massive Foxconn Technologies economic deal in southeast Wisconsin, nothing more than “legalized extortion.”

“Now if you vote yes to give Kimberly Clark the incentives (or what I would like to say legalized extortion) to stay in Wisconsin … (y)ou are making me and every employee at Kimberly Clark a Welfare recipient,” the source wrote in a letter. The employee spoke to MacIver News Service on condition of anonymity. 

“Now if that is not bad enough what (state) programs are going to be cut to pay our wages and stack more money in Kimberly Clark’s Board of Directors coffers,” the source wrote. 

Another employee at the paper giant’s Cold Spring facility in Fox Crossing, said she does not agree with “corporations holding the people of WI hostage.”

“I see a yes vote as opening a Pandora’s box for every business in the state. Where do you draw the line (?),” the source, also not identified for fear of reprisal, wrote. 

The Republican-led Assembly earlier this year passed the incentives package, which hands Kimberly-Clark as much as $117 million in wage incentives and tax breaks for upgrades – if the company continues to operate its Cold Spring and Neenah nonwovens plants. The mills employ a combined 600 people.

While Gov. Scott Walker supports the bill, Republican senators have said it doesn’t appear there are enough votes in the upper house to pass the legislation. 

State Sen. Chris Kapenga (R-Delafield) has been the one Republican senator issuing a statement in opposition to the bill. He has said the bailout of Kimberly-Clark, an established global company that has experienced economic turbulence in changing markets, is different than the multi-billion dollar Foxconn agreement with the state. Foxconn plans to build a massive advanced technology campus in Racine County that would employ 13,000 people at its peak, in exchange for the largest incentives package in state history.   

“When the legislature approved the Foxconn deal, it provided a once-in-a-lifetime opportunity for our state to attract a cutting-edge industry,” Kapenga said in the statement, issued on July 25. “I felt it was in the best interest of taxpayers, as the significant growth potential has the ability to fundamentally transform our state’s economy for decades to come.”

Kapenga said the potential job losses at Kimberly-Clark are “a result of United Steelworkers union bureaucrats failing to come to a better agreement with Kimberly Clark.” 

“It is not the role of government to put taxpayer dollars at risk in the middle of disputes between businesses and unions,” the senator added.

Last last month employees at the Cold Springs factory voted for a new contract, ending lengthy and contentious negotiations and giving hope that Kimberly-Clark would keep the plant open – if the company got the handsome, pay-to-stay incentives package from the state. 

Critics of the deal, including the MacIver Institute, have argued that the $100 million proposal is a bad deal for taxpayers. 

“This amounts to a bailout of a struggling company in a difficult marketplace,” asserted a joint statement from MacIver President Brett Healy and the leaders of three other conservative organizations in late February. 

“Because the government cannot (and should not) rescue every struggling business, the bill creates an unequal playing field in which it is the government, and not the market, that decides which businesses and industries should survive and which should not,” the statement added. 

Company officials did not return a request for comment Wednesday.

In January, Kimberly-Clark, a producer of many paper-based consumer products such as diapers and tissues, announced plans to cut 15 percent of its global workforce. This was likely the result of two straight years of disappointing growth numbers in a very difficult market. 

The Kimberly-Clark restructuring plan would result in the loss of up to 5,500 jobs nationally and the closing of 10 of its 91 manufacturing facilities – including the Fox Cities plants. 

Some union members have criticized the recently ratified labor agreement, insisting the contract demands wage concessions from workers while the incentives package takes from taxpayers. 

“I’m hoping the Senate has enough sense to say no,” employee Gary Burns, a machine leader nearing retirement, told the Appleton Post Crescent. 

The corporate insider who spoke with MacIver News said it doesn’t make sense that the Dallas-based Kimberly-Clark would seek a taxpayer-funded bailout when its Cold Spring facility is so profitable.

“The individuals in Wisconsin economic development should be giving incentives to start-up companies or companies on the verge of collapse, not someone making millions upon millions of dollars in profits a year,” the source said. “You have a facility making money on a daily basis asking for more. It drives me crazy.” 

Overall, the multinational last year posted net sales of $18.3 billion, up slightly from 2016, according to its 2017 annual report filed with the Securities and Exchange Commission in North America, though, organic sales were down 2 percent in consumer products. 

The corporate insider said the incentives bill sends a bad message to Wisconsin’s children. Why work when you can get a handout from the state?

“I for one would rather start over than take a handout, having my family and Wisconsin friends pay for me to go to work,” the Kimberly-Clark employee said. “(Kimberly-Clark) will take the money from the employees and taxpayers and in four or five years still pack up their machines laughing all the way to the bank.” 

M. D. KittleM.D. Kittle is an Investigative Reporter with the MacIver Institute. This article appears courtesy of the MacIver Institute.