Governor Scott Walker and Kimberly-Clark announced on Thursday a deal to keep the Neenah Cold Spring Facility open, saving 388 jobs.
In return for up to $28 million in tax incentives over five years from Wisconsin, Kimberly-Clark will invest up to $200 million in the manufacturing plant and keep an annual payroll of over $30 million at the facility. Kimberly-Clark can receive additional tax credits based upon its purchases from Wisconsin-based suppliers.
“Keeping longstanding businesses in our state is just as important as attracting new ones,” said Walker. “This agreement is a win for Wisconsin and the company, but more importantly for the employees at Kimberly-Clark and the many businesses and communities who rely on the company for their partnership and support.”
“Wisconsin has been an important home for Kimberly-Clark since 1872, and we are grateful for the many proactive efforts to create an economic situation that would allow us to keep the Cold Spring facility open,” said John Dietrich, Vice President of Global Manufacturing for Kimberly-Clark. “We look forward to continuing our 146-year commitment to making lives better for our consumers, and to continue being a strong corporate citizen in Wisconsin.”
Kimberly-Clark, a paper product manufacturer, moved its corporate headquarters from Wisconsin to Irving, TX, in 1985.
The deal makes use of enterprise zones administered by the Wisconsin Economic Development Corporation (WEDC), the same body that has been the subject of controversial legislation in recent days due to proposed limits on Governor-elect Tony Evers’ authority over the organization. Ironically, the deal Walker announced on Thursday would not be possible without going through the legislature first under the bill that passed during the extraordinary session. Walker has not indicated yet whether he will sign the bill into law.
Many Republican legislators and Walker attempted to push through a bill giving Kimberly-Clark a Foxconn-style bailout but a number of conservative state senators balked at the idea of giving that level of subsidy to a legacy industry, preventing the bill from going through.
Sen. Chris Kapenga said in July that the incentive package for Foxconn was a one-time deal because of the size of the economic impact and should not be considered the standard for assisting companies like Kimberly-Clark going forward.
“The Foxconn deal is not a template to provide extra benefits to any company who asks,” Kapenga said. “This is a precedent that we should not set.”
Senate conservative efforts to derail a state bailout of Kimberly-Clark were supported by conservative organizations who also feared that more companies could seek Foxconn-level subsidies. In an op-ed for RightWisconsin, they said a Foxconn-sized bailout of Kimberly-Clark set a bad precedent and created bad public policy.
Despite the smaller subsidy, the deal between Wisconsin and Kimberly-Clark announced on Thursday drew conservative criticism again.
“While enterprise zones can be good public policy, using them as a way to give money to influence routine plant closings and expansions raise serious questions,” said Rick Esenberg, the President of the Wisconsin Institute for Law & Liberty. “Markets are better at allocating resources than government and equal treatment under the law is an important principle. Government should focus on providing a good economic environment for everyone and not on picking winners and losers.”