Is Iowa A Corporate Welfare State?
State of Iowa ’s Economic Development Board celebrated their plan to
extend $6.5 million in forgivable loans so Whirlpool could expand its
Amana, Iowa plant, creating sixty jobs.
Link By my math, that’s $108,000 per
job that tax payers in Iowa will give to Whirlpool, a company whose 4th
quarter 2009 net income rose to $95 million from $44 million a year
On Friday, thousands of people demonstrated Evansville, Indiana, against Whirlpool’s announcement that it would close its refrigeration plant there, moving the jobs to Mexico. The first jobs are slated to be cut beginning March 26th, and when the plant is finally shuttered more than 1100 people will lose their jobs in this Southern Indiana town. As the ramifications of the closure begin to take their toll on the local economy, still hundreds more people will lose their jobs as a consequence.
The language companies like Whirlpool use to justify the havoc they wreak on a community is dry, corporate, without victim. Whirlpool is only doing this so they may “consolidate production within our existing North American manufacturing facilities.” The jobs were called “excess capacity.“
As a courtesy, they announced the closure last August as part of a “smooth” transition.
Workers were warned prior to the protest last Friday, that participating in it could, “hamper employees when they look for future jobs,” according to Paul Coburn, Director of Operations at the Evansville Plant. The feigned concern is disturbing, not only because, quite obviously, the workers wouldn’t have to worry about seeking employment if managers like Paul Coburn had genuine concern, and sought out ways to keep the plant open. But it is problematic because it further places workers and governments in positions where they have to beg, plead and bribe corporations for jobs. Saying, “We fear that potential employers will view the actions of a few, and determine whether they would want to hire any of (the) Evansville division employees in the future,” Coburn puts a stain on their resumes for one day of practicing their first amendment rights against a ten, fifteen or twenty year career and loyalty to the company.
Just two states west of Indiana, the State of Iowa ’s Economic Development Board celebrated their plan to extend $6.5 million in forgivable loans so Whirlpool could expand its Amana, Iowa plant, creating sixty jobs. Link By my math, that’s $108,000 per job that tax payers in Iowa will give to Whirlpool, a company whose 4th quarter 2009 net income rose to $95 million from $44 million a year earlier. Link
Those profits, however, are made by cutting jobs at plants like the one in Evansville, Indiana. CNN reports, again in language that erases people and communities, that these profits are driven by “aggressive cost reductions…to bolster profits in the past four quarters.”
So, hoping to truly convince Whirlpool that it is profitable to expand in Amana , Iowa County will provide an additional $1.5 million grant for the project. We’re now up to $133,000 per job.
Now I’m not opposed to using public funds to help create or save jobs, but shouldn’t there be some sort of ethical measure for doing so? Should Iowa use its public money to woo a transnational corporation that is abandoning its responsibility to a community just two states east? What is the calculus used, measure for measure, when a company deserves even a penny of taxpayer dollars?
In the case of Whirlpool, according to its own spokespeople, it isn’t because they lack liquid capital or because they are broke. Dan Smith, VP of Whirlpool’s Amana division, admitted Whirlpool would have made the investments in Amana “regardless of whether it received the state and county money.” But he insinuated that closure in Amana in the future was not out of the picture. He said that the grant “gives the Amana division a chance to accelerate improvement and stay competitive against facilities in lower-cost countries.” Link
Shouldn’t Whirlpool’s pattern of abandoning its jobs in the Midwest be of some concern when public dollars are being spent? Is there anything in the language of the grants or forgivable loans that puts some guarantee of jobs in Iowa for the long run?
Shortly after Whirlpool bought the Maytag Corporation in 2006, it closed its Newton , Iowa facility causing 1800 jobs to be lost. Isn’t there anyone asking at what point does the public get to make demands on companies like Whirlpool for the public investment we make?
Certainly, Whirlpool has no shame in asking for public subsidies, even though they arrogantly claim they don’t need them. The company is also seeking a $500,000 grant from the Iowa Office of Energy Independence for the Amana project.
That makes $141,000 per job, for now.Tracy
Kurowski has been active in the labor movement
for ten years, first as a member of AFSCME 3506, when she taught adult
education classes at the City Colleges of Chicago. She moved to the
Quad Cities in 2007 where she worked as political coordinator with the
Quad City Federation of Labor, and as a caseworker for Congressman
Bruce Braley from 2007 – 2009.
Tracy Kurowski writes a labor update every
Monday on Blog for Iowa