Uline Moving to Wisconsin
This is some great news for Wisconsin.
Uline, a shipping supplies company in Waukegan, Ill., will receive more than $6 million in state aid to build a new distribution center and relocate its company headquarters in Pleasant Prairie, Gov. Jim Doyle announced today.
Uline is investing about $100 million on the project. The company will move 650 employees from its Illinois facility to the new center and will hire an additional 350 new employees, according to the governor’s office.
The distribution center will be 1 million square feet. The headquarters will be 200,000 square feet and house the corporate officers and personnel in marketing, information technology, merchandising and finance. The campus will be just west of Interstate 94 and south of Route 165.
Doyle announced that the Uline site has been designated as an Enterprise Zone, which enables the company to earn up to $1.7 million annually in refundable income tax credits based on payroll by creating jobs that pay more than $30,000 a year.
Good for Doyle and the state for working this deal. The distribution facility is great, but the corporate headquarters is fantastic.
I wonder what the keys to their decision were, besides the $6 mil in corporate welfare. The kind you sometimes suppose.
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2008 at 2118 hrs
Whoa! This is a Doyle press release. I’ll just wait a bit and see what the real story is before slapping Jimbo on the back.
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2008 at 2206 hrs
While it is great new business is coming to Wisconsin the things to keep in mind is that they had only one choice. Move into Wisconsin.
As it is now they are only 6 miles into Illinois, and Waukegan is so built up, they really had no other option, at least if they wanted room to expand.
The other thing is how many of those new hires will actually be from Wisconsin?
Posted by Michael J. Cheaney on January 03, 2008 at 2214 hrs
Btecha as with many borderliners they will choose to live in Wisconsin where the housing is fair cheaper. Hard to believe isn’t it?
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2008 at 2218 hrs
I don’t know about that Keith. I am saying though from a Business stand point I think Wisconsin turned out to be the lesser of 2 evils though. Not MUCH less but less none the less.
Posted by Michael J. Cheaney on January 03, 2008 at 2223 hrs
$6 million in state aid
which enables the company to earn up to $1.7 million annually in refundable income tax credits
Gee… This makes me feel great… Considering what I paid in property tax this year… Considering what I will be paying in income tax.
Gosh its great to know that a profitable company like U-Line will be getting some of my money too.
Corporate welfare… Disgusting… Not as disgusting as welfare but disgusting none-the-less.
Maybe someday we can attract companies here by appealing to the INDIVIDUALS who own, manage, and work them with a lower tax climate.
Happy New Year to U-Line
Posted by .(JavaScript must be enabled to view this email address) on January 03, 2008 at 2310 hrs
And this is good for Associated Bag, their competitor near Mitchell International, how? Or do we give them $6 million, too?
Posted by james wigderson on January 04, 2008 at 0120 hrs
All of this despite the best effort of WMC to drive people away. Maybe they’re turning into the fringe at last.
James, just use all of the “Wal-Mart is good” arguments here. Same theory.
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2008 at 0651 hrs
A couple of honest questions for anyone that knows, no sarcasm here. Doesn’t U-line spending 100 million on the project in Wisconsin mean anything good for Wisconsin? How does Uline moving over the border to Wisconsin hurt Associated Bag? They were competitors before as well. Are they so much closer to Associated bag markets that now they will be more competitive and steal business or be able to use the tax credits to lower their prices? What is the most likely scenario that would harm Associated Bag more now than if they had stayed in Illinois?
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2008 at 0847 hrs
James:
I really don’t think this hurts Associated Bag as much as anyone might think.
Its not like Associated is Muscling in on anyone territory, both Companies I am sure have very established clientèle, and heck I’d say that Associated may even purchase a few items from Uline. and Possibly even vice versa.
All this does is move them 10 miles closer.
I really don’t have any first hand experience within the bag industry, but it does appear to be a good move.
One other thing, I am sure that Companies that purchase supplies from either company (S.C. Johnson comes to mind) Do not use either company EXCLUSIVELY for any of their product needs.
Posted by Michael J. Cheaney on January 04, 2008 at 0930 hrs
Another powerful advocate for widening I94 was just added into the mix.
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2008 at 1032 hrs
Doesn’t U-line spending 100 million on the project in Wisconsin mean anything good for Wisconsin?
Being so close to the border, on many levels I doubt it makes much difference at all (the 100 million expenditure)
Likely U-Line will use the same contractors to build their new plant that they would have used 10 miles to the south.
Likely NO employees will be relocating to save a 10 mile commute. Some employees probably already live here, some probably lived in Illinois. Of the new jobs/new employees that this new facility might create I’m certain they will draw from the same geographic area (which includes Illinois and wisconsin)
Had the distribution facility been built in Illinois People from the Kenosha area would have been just as able to apply for a job there.
I assume the new plant will (or would have) added to the property tax base in Pleasant Prairie (that is if the give backs in the form of the 6 million dollar gift and 1.7 million dollar annual tax credits don’t negate the gain)
In terms of Winners and Losers, CLEARLY the biggest winner is U-Line. All they had to do was choose to locate their new facility a couple miles north over an imaginary line in the sand and a profitable company that gets taxpayer dollars and will get annual tax credits.
Clearly the biggest loser is the taxpayers of Wisconsin that forked over the 6 million and the taxpayers that won’t get the tax credits given to U-Line.
Don’t get me wrong. A business choosing to locate in Wisconsin in and of itself cannot POSSIBLY be a bad thing for Wisconsin. (that is if we didn’t give away the farm to get them here)
But for sure what we have done is continued to play the game. The same game the Brewers played with us. The same game other big companies like Manpower and Roundys play.
They leverage their size and name value to suck taxpayer funds out of the system.
Gosh… I just built a new house 4400 sq ft house in New Berlin.
I’ll now be shopping at New Berlin grocery stores instead of West Allis. I’ll now be buying gas at New Berlin gas stations instead of West Allis.
I guess maybe before I decided to build my new house I should have gone and solicited offers from New Berlin, Brookfield, Hales Corners, Muskego, and Franklin and see who would give me a tax-payer funded grant for part of my construction costs. (Hell, if U-Line got 6 million on a 100 million project) That’s 6% of their build cost. Damn… If New Berlin has “wooed” me with 6% of my construction cost that would have been $39,000 dollars for me! And subsequent discounts on my property taxes annually because of all the money I spend in New Berlin now? Hell I wish I got the same deal these profitable private industries get.
I’m a business man. My company has earned every dollar we’ve ever made. I guess I need to start considering the new sources of revenue called government grants and tax credits.
How does Uline moving over the border to Wisconsin hurt Associated Bag?
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2008 at 1033 hrs
(oops, that last line was part of a cut and paste that didn’t get deleted)
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2008 at 1039 hrs
The fact that we had to pay them to move out of Illinois still does not bode well for Wisconsin.
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2008 at 1050 hrs
The fact that we had to pay them to move out of Illinois still does not bode well for Wisconsin
Exactly… Its like if I were to drop my price under a competitor just in order to get the contract. The fact that I had to drop my price demonstrates 2 things:
1, either my product or service is inferior or
2, if the product wasn’t inferior, I was just a shitty salesman who wasn’t able to communicate the benefits of my product or service to my customer.Don’t get me wrong, in and of itself, U-Line locating in Wisconsin would be a good thing. Those people go out to lunch every day, they buy gas to and from work, etc etc.
But if the reason they came here was for the money. We must really suck.
If they didn’t come here for the money… We got suckered… And either Jim Doyle is a shitty saleman or the product here in Wisconsin in inferior and we must cut our price (in the form of a taxpayer gift) to be competitive.
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2008 at 1100 hrs
That is a very negative spin (possibly deserved, possibly not). It couldn’t be that U-line took the best offer, which makes our salesman better than all the other state’s salesmen? I would have to hear the estimates of what U-line will pay in taxes after credits before I called the Wisconsin taxpayers the biggest losers. If they still payed 1 million after credits, we would recoup in six years and I would call that a successful investment. If it takes 50 years before it is “profitable” for the state, I would call that a bad investment. I don’t have enough info and I don’t think anyone commenting so far does either. Am I wrong?
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2008 at 1136 hrs
It’s my understanding that many, many companies are leaving Illinois…hopefully more will come to Wisconsin.
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2008 at 1248 hrs
It couldn’t be that U-line took the best offer, which makes our salesman better than all the other state’s salesmen?
Anyone can close a deal by cutting price (or in this case giving money)
I would have to hear the estimates of what U-line will pay in taxes after credits before I called the Wisconsin taxpayers the biggest losers
I agree that ultimately, I would need to see what the other options the company entertained was before making a judgement of wether Jim Doyle (or anyone else who was part of this “deal”) did a good job or not.
But knowing how these companies make these decisions, I think its a pretty sound assumption that wisconsin offered the biggest chunk of ‘the farm’ to make the deal happen.
I think it would change things if the company relocated from Waukegan to say… Madison… Because then you KNOW there will be executives relocating, REAL job growth from the relocation etc. (instead of a 10 mile move which doesn’t change any of that paradigm)
If they still payed 1 million after credits, we would recoup in six years and I would call that a successful investment.
I think there is a bigger picture there. How much infrastructure streets, sewers, water lines, utilities etc was put in to support the new facilities. Those costs would need to be included.
And by the logic that its ok to give tax credits if the net pay-off is relatively short, then I would again submit my scenario above (I just built a house, I will be paying a pretty penny in taxes to New Berlin now, should I get a tax credit? see above scenario)
I’m all for people making as much money as they can. Individuals, companies, whatever…
So I’m not playing a class warfare game here, but this is EXACTLY what liberals have as ammunition when they say “the rich get richer”. Profitable companies getting taxpayer dollars. Its INsane.
I drive by Miller Park everyday. I know I’ve contributed THOUSANDS in sales tax dollars to pay for that park. So that multi-millionaire owners can pay multi-millionaire players multi-million dollar contracts.
And I have nothing against millionaires. I hope that I’ll be one shortly. But I do have something against people that get something on the backs of others.
Companies like U-Line. Roundy’s… Manpower… The Brewers.
(scuse me while I pull up a soap box)
Somewhere along the line, government got in the habit of giving taxpayer money to private entities to ‘lure’ them.Now we have states competing against other states for companies and baseball teams and every other entity that has grown large enough to have a significant impact on a local economy.
And all of that is being funded by taxpayers.
Its time to put a stop to all of it because all this courting of companies is coming at a stiff price for taxpayers and the stakes just keep getting higher and higher. We need new laws at a federal level so that NO state can spend their citizens money to lure private industry. Thus protecting taxpayers in BOTH states. Take the grants and gifts and tax credits off the table and let companies make their decisions based upon whats best for their company.
It boggles my mind that in the billions of dollars floating around professional sports, they play in taxpayer funded stadiums. That’s unbelievable to me.
It boggles my mind that profitable companies like U-Line will get millions of taxpayer funds to build their facilities.
I understand looking at the situation only there may be benefit. But looking at the big picture, what is happening with all this governmental courting (bribing) of industry with taxpayer funds… Its unbelievable.
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2008 at 1328 hrs
Its like if I were to drop my price under a competitor just in order to get the contract. The fact that I had to drop my price demonstrates 2 things:
1, either my product or service is inferior or
2, if the product wasn’t inferior, I was just a shitty salesman who wasn’t able to communicate the benefits of my product or service to my customer.That is the absurdest argument I have heard today. And here is why:
Because people and Businesses are looking for the best value for their money. xxpilot included:
Now be implied that he has never dropped a price to match a competitors, (To which I say BS) because anyone who owns a business is looking for the best value for their money (Uline included) that is the nature of competition.
xxpilot also said that he had a house built in New Berlin, I am sure that he looked at things like property tax rates, schools and the overall quality of life in New Berlin as opposed to Milwaukee, Brookfield, Waukesha, and West Allis. (water not so much a consideration, but hey he’ll have a big house with brown grass, but to each his own)
When it came time to build that house, I am also sure that he looked around at many builders, comparing price value and service, and of course how long to build it.
It is the same thing Uline did only on a much BIGGER scale.
Posted by Michael J. Cheaney on January 04, 2008 at 1401 hrs
I am relatively sure that it is not the most absurd thing I have heard, but it does not sound much like the pure market xxpilot I have come to respect. The biggest problem with your hands-off by Government policy idea (besides being unrealistic) is that today the market is a global economy and third world Countries are offering those benefits and a cheaper work force. Many companies big enough to have a real impact on a state level are big enough to move to Mexico or Thailand or just buy from China and become a distributor. Any multinational looking for a good place for a new factory (without Government incentives)would only choose the US because of patriotism and I don’t think that is enough.
Remember, not an economics major and admittedly over generalized, just my take.
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2008 at 1438 hrs
Michael, I don’t see the parallel between my scenario and yours.
I don’t begrudge U-Line for looking for the best deal for them.
I do begrudge Wisconsin for making my tax dollars part of the package.
I did shop contractors when I built my house.
I did look at property tax rates (which is why I built in NB not Franklin)
But I DID NOT have the luxury of going to New Berlin and telling them that since I’m building a big house and going to be paying upwards of 8k a year in property tax, that I wanted a tax credit.
I DID NOT have the luxury of going to New Berlin and telling them that since I’ll now be shopping at New Berlin grocery stores and buying gas at New Berlin gas stations that my ‘economic impact’ to New Berlin is worthy of a 6% gift from New Berlin taxpayers towards the construction of my house.
But my moving to New Berlin DOES INDEED have a significant positive economic impact on their tax collections and local businesses.
Paying U-Line to build in Pleasant Prairie is AS rediculous as paying me to build in New Berlin (to lure me there instead of building in another suburb)
But yet companies are lured ALL the time with these payouts of taxpayer funds. That is what is proposterous.
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2008 at 1438 hrs
Remember, not an economics major and admittedly over generalized, just my take.
Well I was an economics minor and I do know the economic viability of specilization and how all economies (nations) benefit from specilization, efficiencies and trade.
I couldn’t possibly break it down in a forum such as this, but the notion that the US (as a whole) loses when companies go overseas is not supported by economic theory. (which can be supported and evidenced)
Think about it… The amount of public monies we spend to keep a company here MUST exceed the benefit of less expensive labor of moving the company overseas (or the company would have moved)
We subsidize the inefficient labor of this country to keep the job here. While at the same time we sacrifice the benefit of utilizing a more efficient (lower cost per output) labor of a company overseas.
We lost twice. We spent money to subsidize labor, and we gave up the opportunity cost of utilizing a more efficient labor source. Thus seeing a higher cost of goods that we SUBSIDIZED the labor for!
Again there are many other variables to consider (logistical expenses, etc etc) but the free market works those out.
This does not spell doom and gloom for the United States, (that we outsource labor to the most efficient source) rather there are many many things that we do better than other countries and overall economies will benefit most when they do what they do best and trade for the rest.
I digress…
Much like companies can choose to go where the best package exists, so to can people.
We lure companies with taxpayer funds…
That creates a tax burden and a poor environment for people to live in.
Much like companies can move, so too can people. And when the economic climate and taxes become stifling people will (see Michigan for a case study in process)
I’d hate to see Wisconsin end up like Michigan is.
And I’d hate to see the US lose its economic position to other countries because we did not focus on doing what we do best and trading for the rest, instead, we taxed and subsidized, stifled growth, and lost the greatest opportunities for prosperity to other countries.
That is still decades away, but we’re losing ground. Anyone involved in international business is well aware of that. Look at the value fo the dollar. Look at the companies growth projections. Overseas markets are often the most lucrative.
I hope that as we continue to tax and regulate and stifle our economy and let the world catch up to our economic position and overtake us if we don’t change course, that those countries will have open immigration so that people here can seek places where their is opportunity.
How ironic will that be. When other countries don’t want “those lousy americans” crossing their border.
Posted by .(JavaScript must be enabled to view this email address) on January 04, 2008 at 1507 hrs
I think you are doing wonderful job
You are intellectual as well
Posted by hemp mat for yoga on March 21, 2008 at 0252 hrs
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