It is completely appropriate to point fingers of blame at politicians and so-called “economic development agencies” — especially the failed Wisconsin Economic Development Corp. — that were asleep at the switch as the Kraft Heinz food-processing conglomerate prepared to shutter its almost 100-year-old Oscar Mayer plant in Madison.
Officials in Iowa and New York had their act together and scrambled — successfully — to keep production facilities and jobs in their states.
Wisconsin, once again, was playing catch-up.
We have argued before, and we will continue to argue, that WEDC needs to be shut down. It is a scandal-plagued mess of an agency that stumbles from crisis to crisis. Operating in a netherworld, not quite public, not quite private, it is taxpayer-funded, yet generally unaccountable and even more generally dysfunctional. We understand the desire of some sincere Democrats and Republicans to try to “fix” WEDC. But they are wrong. WEDC cannot be repaired because it was established by Gov. Scott Walker and his cronies on precisely the wrong premise: steering tax money to corporations that take little or no responsibility for keeping jobs in Wisconsin, let alone bringing new jobs to the state.
The reports on WEDC’s interactions with the owners of the Oscar Mayer plant sum up the crisis. According to the Milwaukee Journal Sentinel, “WEDC, the state's jobs agency, in 2013 offered what was then Kraft Foods Group $194,800 in tax credits to attempt to win a $4 million investment in Oscar Mayer's Madison offices, agency spokesman Steve Michels said. In April 2014, Kraft Foods declined the tax credits, said Michels, who didn't answer questions about whether WEDC had contacted the newly created Kraft Heinz to see if the new ownership changed matters.”
Here’s the problem. The Kraft Heinz conglomerate was created not in 2013 or 2014 but in 2015 — with a merger of Pennsylvania-based Heinz and Illinois-based Kraft that was steered by Warren Buffett's Berkshire Hathaway and the Brazilian investment firm 3G Capital.
A new corporate structure developed. And there were no guarantees that the focus would be on Madison or other communities that have, for generations, produced the company’s products. This led to concerns that Kraft Heinz — like so many multinational corporations — would seek to make money not by producing something new or useful but by cutting jobs and closing plants.
If WEDC was functioning as an even minimally engaged economic development agency, it could be expected to respond to dramatic corporate shakeups that could influence the future of Wisconsin employers with a sense of urgency. Yet we do not detect evidence of that sense of urgency in Michels’ refusal to “answer questions about whether WEDC had contacted the newly created Kraft Heinz.”
We respect the question asked by Madison Mayor Paul Soglin: "If WEDC failed to contact Oscar Mayer in the critical months of July and August of this summer, why would anyone think there is anything productive to be gotten out of WEDC?"
Madison officials met with the company and delivered the message that the city was ready to take action to keep the plant and the jobs that go with it. But Soglin says he saw little evidence of engagement by the state.
Walker has effectively acknowledged that disengagement by playing politics. The governor’s initial reaction was to try to absolve himself of any blame — claiming that the closing was a corporate decision that had "nothing to do with Wisconsin." Unfortunately for him, a quietly revealed detail suggests Wisconsin might have had a chance to step up. After the announcement of the plant closing, the Journal Sentinel reported that “Walker spokeswoman Laurel Patrick said a Kraft Heinz representative in early October had asked to meet with the governor and his office responded to set up a meeting. But in mid-October, the company notified the governor's office it no longer wanted to meet, Patrick said.”
Here’s a notion: A governor who was interested in keeping jobs in Wisconsin might have responded immediately and aggressively in early October rather than simply expecting that there was plenty of time for setting up meetings and then, when the meetings did not come together, letting things slide. Indeed, a governor who was interested in keeping jobs in Wisconsin might have been paying attention to the corporate changes that were unfolding and might have acted on his own to contact the new bosses. We are certain that Gov. Tommy Thompson would have done that.
Unfortunately, Walker seems to take affirmative action only when it is in his own interest. Even as the failed Republican presidential contender finally began to engage with discussions about whether Kraft Heinz might rethink its decision, and whether the plant could be sold to another processor, Walker seemed to be most interested in ensuring that he was not blamed for the latest in a string of setbacks for Wisconsin industries.
Clearly, Walker lacks the commitment, and the capacity, to play a leadership role when it comes to economic development. The same goes for WEDC.
The question now is whether more capable figures — in the business community, in the state Legislature, at the University of Wisconsin — will allow the charade that Walker has created to continue. As long as WEDC remains in operation, opportunities will be missed, jobs will be lost and Wisconsin will suffer.
It is time to shut WEDC down, and to restore control over economic development to a state agency that is accountable and that has meaningful oversight. That change might not be of consequence for the Oscar Mayer plant’s future in Madison, but it would help to ensure that we do not lose more major employers in Madison or other Wisconsin communities.
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