State Subsidized Companies That Then Outsourced Jobs at Center of WI Gubernatorial Race

As the Wisconsin gubernatorial race heats up, outsourcing is becoming an increasingly hot topic. Now, revelations about companies receiving tax incentives only to outsource jobs at a later date are turning up the heat further:

In the last decade, at least 25 companies with Wisconsin operations have both been awarded state funding and outsourced jobs, according to a State Journal review of U.S. Labor Department, Wisconsin Economic Development Corp. and former state Commerce Department data. In 10 of those cases, the outsourcing occurred after the state funding was awarded.

Walker has accused challenger Mary Burke of making her family’s fortune partially by moving parts of the Trek bicycle business to China.  Burke has fired back, noting that Walker gave grants to companies who outsourced jobs:

Since 2004, at least 338 companies operating in Wisconsin have cut jobs due to international trade. That figure is based on companies where the U.S. Labor Department certified workers for Trade Adjustment Assistance (TAA), which for decades has helped retrain, re-employ and support workers laid off due to global trade. Groups of affected workers file petitions with the government to receive the benefits.

Nearly 450 TAA petitions affecting 37,841 workers were certified for companies with operations in Wisconsin between 2005 and 2013.

Not all of those companies “outsourced,” a term that can refer to many different things. Some lost sales to lower-cost competitors who outsourced. Others, such as Sussex-based Quad Graphics, acquired or opened foreign operations that sold directly to those markets while reducing their U.S. workforce.

But in the vast majority of cases nationally, TAA grants result from companies moving production or services to foreign countries or importing products.

To come up with its list of the 25 companies that have been awarded state funding and outsourced jobs, the State Journal identified those operations awarded WEDC or Commerce funds since 2005 and compared them to companies the Labor Department identified as having outsourced jobs since then.

A new proposal from Assembly Minority Leader Peter Barca would require companies awarded state funding to report any outsourcing activity, potentially stripping them of state funding for such actions.  Gov. Walker has voiced support for the plan, which wouldn’t apply to Trek because their outsourcing occurred a decade after funding was received from the state:

“The clawback provisions that we have, I think they track them for three to five years,” Barca said, referring to commitments that WEDC tracks for job creation, job retention and capital investment. “You can’t track things 10 years later or 15 years. The world changes.”

Wisconsin AFL-CIO president Phil Neuenfeldt said that despite Gov. Walker’s attacks on Trek many of the state’s workers still support Burke given her support of federal policies to level the playing field.  As he told the State-Journal:

“We know we need to compete on a global level,” Neuenfeldt said. “But we also know there has to be fairness and accountability to make sure that we as taxpayers hold what we invest in accountable.”

The Wisconsin State-Journal has a complete list of Wisconsin companies who have outsourced jobs.

Go to WI State Page
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