Thursday, January 19, 2012

Spectrum Stays in Wisconsin

Good or bad?

Spectrum Brands said Thursday it came close to transferring its world headquarters and Remington operations to Florida.

But the company said it has now dropped those plans and instead will move from Madison’s West Side to a new building in Middleton in late 2013.

The announcement was the first time Spectrum Brands, whose products include Rayovac, Remington, Cutter and Dingo, has disclosed any plans to move to Florida.

[...]

He also is seeking more information about the role of a $4 million forgivable state loan and how it might have influenced Spectrum’s decision to move to Middleton, Crawley said.

An earlier version of the story pretty much said that the $4 million loan was the reason for Spectrum staying, but that may have been speculation by the reporter.

So… here we are… assuming that the forgivable loan was the deciding factor, it may cost the taxpayers $4 million to keep Spectrum from moving to Florida. Is it a good deal? Absolutely, yes. $4 million is a small price to pay to keep a corporate headquarters and all that means in Wisconsin. Should the state’s taxpayers have to fork over corporate welfare to pay for it? In a perfect world, no. But that’s how the game is played nowadays.

(9) Comments
Posted by Owen at 2105 hrs
Economy + Politics + Politics - Wisconsin

  1. Worth it in this case? Sure. And other similar ones too. But ultimately it’s the wrong game to play…it’s a losing game.

    It is unfair to reward companies that threaten to leave and give them breaks essentially on the backs of companies that don’t. This system encourages blackmail - and competing on those grounds is often a losing battle. There’s always some other municipality willing to pay as much or more to entice businesses.

    Posted by .(JavaScript must be enabled to view this email address) on January 19, 2012 at 2120 hrs


  2. $4 million is chump change compared to the extortion packages that were offered to Mercury Marine, or Harley, or GM.

    Locke and I are in agreement on this one.  As much as people rail on the public sector, is it any better when taxpayers end up collectively forking over heaps of cash to subsidize wages and jobs at private companies?  Mercury Marine is a quasi-public sector employer at this point.  Without their piles of taxpayer cash, they aren’t employing people in Wisconsin.

    Posted by Recess Supervisor on January 19, 2012 at 2134 hrs


  3. No don’t give them the $4 million.    Instead get rid of the excessive public sector and the excessive taxation required to support it.  Address the cause, not the symptoms.

    Posted by .(JavaScript must be enabled to view this email address) on January 20, 2012 at 0530 hrs


  4. Wisconsin’s broke…except when it comes to corporate welfare.

    Posted by .(JavaScript must be enabled to view this email address) on January 20, 2012 at 1030 hrs


  5. Your “imperfect world” is called “federalism.” As long a power is devolved to the states, they will compete against each other to lavish non-free market subsidies to lure businesses from each other.

    Funny how “state’s rights” stunts free enterprise.

    Posted by Northern Pike on January 20, 2012 at 1048 hrs


  6. When I worked at Rayovac, it was a Wisconsin Company through and through.  Tom and Judy Pyle were good corporate citizens and, I believe, really did care about the business and the state.  There were facilities in Madison, Fennimore, Wonewoc, Portage, Appleton as well as the “glass menagerie” corporate headquarters….what has it shrunk to today?  Wage competition and corporate climate drove large parts of the operation overseas.  Those line jobs were supported by very skilled labor to keep those high speed machines running.  Even a collaboration with Matsushita Corp (panasonic) in the early 90’s showed a superiority of skilled labor over the “hard working japenese.”  Irrational decisions and votes over contracts by the teamsters in Fennimore, I think really soured the Pyles and led to the sell off (my opinion). What a shame if it disappears completely.

    Posted by .(JavaScript must be enabled to view this email address) on January 21, 2012 at 0917 hrs


  7. I think it is hypocrisy to be for this bailout and not for others.  At least, if you take it on a case by case basis a lot more data needs to be provided.  Are corporate heads pulling in a million each?  Is there stock and how well is it doing?  Were corporate profits - before bonuses and raises - such that they have the ability to pay back the debt? 

    I agree with BVBigBro, treat the symptoms, but don’t play the losing game.  I don’t get Locke’s position.  Is it right in this case? Sure.  Is it wrong, sure. 

    Is it really that simple?  Borrow millions, then offer to stay in Wisconsin to not pay it back?  I hear about that sort of thing from my wife, who works in the closing dept of a bank all the time.  The bank forgives part of a debt to keep part and then turns right around and lends more to the same company 4 months later.  That is some good salesmanship.

    My favorite story was of a lawyer with a credit score in the low 400s (I kid you not) who had a record of hundreds of loan short payoffs for houses, cars, boats, credit cards, etc.  His new wife had an 800 credit score and he argued that it should all be through his wife’s credit rating even though most income was from him and he wanted his name on the loan.  All he had to do to get the loan (over 500k)was to answer why he shorted all of his earlier loans.  His most common two answers were because of ‘divorces’ and a legaleze way of saying ‘he could’.  They gave him the loan…

    Posted by .(JavaScript must be enabled to view this email address) on January 23, 2012 at 1544 hrs


  8. TUERQAS - maybe I wasn’t clear enough. In terms of the it was worth it…If we absolutely must play the game then I’d look at at it from an ROI standpoint. Are the number of jobs that will stay or be moved here worth the cost to the state? If forced, then I’ll be pragmatic & do the math.

    But ultimately, as I learned in War Games, sometimes the only winning move is not to play. My solution is to eliminate all corporate tax credits that target various industries and behaviors that we “like” ending the picking of winners & losers. And along with it, end all state corporate income tax. They’re too easy to disguise and too easy to pass onto customers as a cost of doing business.

    Posted by .(JavaScript must be enabled to view this email address) on January 23, 2012 at 2044 hrs


  9. But wouldn’t it be better to not play the game here?  Are there no unnecessary regs or a better system of taxation that would also induce the company to stay?  (And others from considering it, and others looking in to moving here?)  I just think you have to stop playing the game at some point if you agree that it is the right choice.  I am betting that there are solutions that could include the company paying back its debt and those rules may end up helping other struggling companies as well.  Just forgiving the debt helps only one company directly unless you consider opening that door for others as a good/acceptable idea.

    As so often happens when politics is discussed, you(not just you here, Locke, I mean people in general) are fence sitting when your views and arguments clearly put you on one side or the other.  Why do that?

    Posted by .(JavaScript must be enabled to view this email address) on January 24, 2012 at 1303 hrs


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