MADISON, Wis. -- Supporters of a $100 million incentive bill designed to keep open a Kimberly-Clark Corp. plant in northeastern Wisconsin argued Wednesday that taking no action would be devastating for the Appleton area and the entire state, though they remain short of the votes they need.
The paper-products giant, which was founded nearly 150 years ago in Wisconsin and is now based in the Dallas suburbs, is urging lawmakers to take action to save nearly 400 jobs as it weighs whether to close either that Wisconsin plant or one in Conway.
The Arkansas Economic Development Commission is working with leaders at Kimberly-Clark to develop an incentive package to try to keep the Conway plant open. The plant has about 350 workers.
At a public hearing before the Wisconsin Legislature's budget committee Wednesday, the bill's Republican author, state Sen. Roger Roth, admitted he still doesn't have the votes needed to pass it, despite the GOP's 18-15 majority. No Democratic senator has come out publicly in support of the bill, which the State Assembly passed in March. Four Republicans have publicly opposed it, including one -- state Sen. Luther Olsen -- who expressed skepticism at the hearing.
Kimberly-Clark originally asked for resolution of the issue by the end of September, but it agreed to wait to make a final decision about the plant until the Legislature acts.
Company Vice President John Deitrich testified that the tax-incentive bill was a "game changer" and that if it were passed, the company would keep the plant open and instead close the one in Conway. But Democrats and Olsen expressed skepticism.
"I am not convinced that this is the right thing for the state to do," said Olsen, who peppered Deitrich with questions about the company's profits and expenses. Deitrich didn't answer those questions.
Opponents, including a coalition of conservative groups, have cast the measure as a corporate giveaway and said the government shouldn't be picking winners and losers. But Republican Rep. Jim Steineke, the State Assembly's majority leader, said the question was whether to save the jobs or lose them.
"We act and they stay, or we don't act and they go," Steineke said.
Democratic committee members also expressed concern about the legislation's costs, the precedent it would set and the fact that they weren't involved in developing the proposal.
The incentives are modeled after the $3 billion package approved for Foxconn Technology Group, which is building a display-screen manufacturing campus in Mount Pleasant.
The $4.5 billion deal that Republican Gov. Scott Walker put together last year to draw the Taiwanese electronics manufacturer to the southeast corner of the state may end up costing $220,000 to more than $1 million per job, depending on how many are created.
The Kimberly-Clark incentive bill would extend state tax credits for 17 percent of certain payroll costs and 15 percent of capital investment in exchange for retaining jobs. It would essentially go to Kimberly-Clark as a cash payment because its corporate income-tax liability has been eliminated thanks to Wisconsin's manufacturing and agriculture credit.
Walker backs the plan as a way to save the jobs for the Cold Spring plant in Fox Crossing, the only one in North America that makes Depend adult incontinence products. Democratic Gov.-elect Tony Evers did not voice support for the bill in a statement Wednesday from his spokesman Britt Cudaback.
Evers supports a "long-term, industry-wide solution to the challenges facing the paper industry," Cudaback said.
Kimberly-Clark, which makes Kleenex tissues, Huggies diapers and other paper products, said in January that it planned to close both the Fox Crossing plant and a smaller one in Neenah that employs about 110 people. The closures would be part of the company's plan to cut up to 5,500 jobs and close or sell 10 plants worldwide. Its North American consumer business is based in Neenah, where the company was founded in 1872. Wisconsin is home to about 3,000 Kimberly-Clark employees.
The Fox Crossing plant employs about 388 people, but that would increase by 52 jobs and Kimberly-Clark could invest another $500 million in the facility over the next 15 years if the bill passes, Deitrich testified.
Information for this article was contributed by David Smith of the Arkansas Democrat-Gazette and by Paul Roberts and Benjamin Romano of The Seattle Times.
Business on 11/15/2018
Print Headline: Kimberly-Clark tax breaks debated