All of those naysayers who believe Wisconsin is a terrible place to do business need to take a deep breath and do some serious recalibrating.
To be sure, like every other state, Wisconsin has its share of challenges - its high taxes and the dropout rate at Milwaukee Public Schools always quickly come to mind. And no doubt, Wisconsin has taken it on the chin with the closures of automotive plants in Janesville and Kenosha.
The losses have made the Milwaukee 7 a convenient target for people who make a habit out of trashing Wisconsin's business climate.
However, the negative drumbeat news cycle needs to take a break sometimes, and Tuesday was one of those days.
BizTimes had known for weeks that Milwaukee is one of two cities to be finalists in a Spanish company's search to build its new North American headquarters. We were told by city officials that we should not report that fact, however, because doing so could jeopardize Milwaukee's chances of landing the project.
Well, Wisconsin Secretary of Commerce Richard Leinenkugel blew those concerns out of the water Tuesday when he reported by phone from Bilbao, Spain, at the Metropolitan Milwaukee Association of Commerce (MMAC) all-member meeting that he had just concluded a "12-hour cage match" presentation to a Spanish company.
Leinenkugel is courting the Spanish firm with a southeastern Wisconsin delegation that includes officials from the Milwaukee 7, We Energies and Richard "Rocky" Marcoux, commissioner of the Milwaukee Department of City Development.
Milwaukee is "at the finish line" of landing the company's North American headquarters that would bring hundreds of jobs to southeastern Wisconsin and could also generate more work for vendors in the region, sources said.
"It's between us and one other city," said one source close to the negotiations.
Officials representing the Spanish company have been studying the business climate in southeastern Wisconsin for weeks, BizTimes has learned. The company sent representatives to the MMAC's Future 50 program in September, and they toured several southeastern Wisconsin factories, including the GenMet metal fabrication plant in Mequon. The plant tours were designed to give the Spanish company some insight about the array of potential partners and vendors in the region, sources said.
Sources said they expect the Spanish company to make a decision on the site for the North American headquarters by the end of the year.
Sources declined to identify the Spanish company that is being courted by Milwaukee.
We've got a pretty good hunch, however. Think alternative energy. Spain has become the world's second-largest producer of solar and wind energy in the world (behind Germany).
Spanish companies such as Gamesa, a manufacturer and installer of wind turbines, Iberdrola, a power group, and Acciona Energia, a wind park developer, are becoming global players in the fast-emerging alternative energy markets.
Republic Airways jobs
The news that Milwaukee is a finalist for the Spanish company's jobs came on the heels of Republic Airways Holdings Inc.'s announcement earlier Tuesday that it will save 800 jobs in Oak Creek and move 800 new jobs to the region by the end of next year.
Republic, the new parent company of Midwest Airlines, plans to move the jobs to Oak Creek and Milwaukee's General Mitchell International Airport.
Republic chief executive officer Bryan Bedford confirmed the creation of a Milwaukee hub during the MMAC's meeting at the Bradley Center.
Wisconsin Gov. Jim Doyle announced the use of the state's Enterprise Zone tax credits to help convince Republic to bring the jobs to the state.
Indianapolis-based Republic Airways will consolidate operations in Milwaukee from other cities such as Las Cruces, N.M., and Denver, Colo.
Republic acquired Denver-based Frontier Airlines on Oct. 1.
Bedford praised Milwaukee's pro-business climate as a reason for deciding to bring the jobs here, rather than Indianapolis or Denver.
"We spent a lot of time in the last three months trying to figure out where we can be our best and most competitive," Bedford said.
Bedford also announced Republic will add new routes from Milwaukee to San Francisco and Raleigh, N.C. The company is considering adding service to six more routes.
"Midwest Airlines today is about 45 percent to 50 percent of what it was at its peak. Our goal is to get back to its peak as soon as possible," Bedford said.
Mercury Marine jobs
Step back for a moment and recall that Wisconsin also recently beat out Oklahoma to keep Mercury Marine's production plant in Fond du Lac. Wisconsin provided about $70 million in public assistance, along with about $50 million in a loan backed by a Fond du Lac County sales tax and $3 million from the city of Fond du Lac. With the combined package of incentives, Mercury Marine plans to move up to 2,700 jobs to the Fox Valley.
Biotech jobs
In addition to the wins with Mercury Marine and Republic Airways, eight biotechnology companies have recently moved from other states to Wisconsin.
Biotechnology in Wisconsin is an $8.7 billion industry with 400 companies and 34,000 employees. Biotechnology is the fastest-growing segment of the Wisconsin economy, with an annualized growth rate of nearly 7 percent.
The state is benefiting from the formation of the Wisconsin Angel Network and the Wisconsin Venture Fund to help facilitate deal flow, investor exchanges and network creation.
In February, Doyle expanded the investor tax credit law as part of an early economic recovery bill. Enhancements included: raising the cap on tax credits for angel investments from $1 million to $4 million; tripling the annual pool of credits available for angel credits, from $5.5 million to $18.25 million per year, and venture credits, $6 million to $18.75 million; and allowing angel investors to claim the entire 25 percent credit on their investment in the first taxable year.
The eight biotech companies moving to Wisconsin are: RJA Dispersions LLC; VitalMedix; Rapid Diagnostek; Aldevron; Flex Biomedical Inc.; Inviragen Inc.; Exact Sciences Corp.; and NanoMedex.
They're moving here from Minnesota, North Dakota, Massachusetts and Florida.
Those relocations recently prompted the Star-Tribune in Minneapolis to write a series (and a related blog item headlined, "Wisconsin kicks our butt") about how Minnesota is losing out to a better business climate in Wisconsin.
Jobs from the Flatlands
Meanwhile, Uline Inc. of Waukegan, Ill., will move across the Wisconsin border to its new headquarters in Pleasant Prairie in 2010, bringing 1,000 jobs to a state that is supposedly a terrible place to do business. Uline is investing about $100 million in this God-awful place.
Uline received more than $6 million in incentives and aid from the State of Wisconsin to come here. In addition to Uline, several other Chicago area-based firms recently have opted to build facilities in Kenosha County instead of northern Illinois, including Vernon Hills-based Rust-Oleum Corp. and Lake Forest Village-based Hospira Inc.
And guess what? Business advocates in northern Illinois are now screaming because Wisconsin is luring away so many of their businesses. At a meeting of the Lake County Chamber of Commerce in Independence Grove, Lake County Partners president Dave Young blamed Illinois' "unfriendly business climate" for the flight of businesses TO Wisconsin.
"We have a governor (in Illinois) who goes out of his way to antagonize the business community," Young said at the luncheon, according to the Lake County News-Sun. "Unfortunately, right next door in Kenosha County, Gov. Jim Doyle is very adept at business recruitment and actually enjoys it."
Oh, and there will be more good news. Look for the efforts of the Water Council and Badger Meter Inc. CEO Rich Meeusen to pay off with more freshwater technology jobs in the next couple of years.
On Wisconsin!
Steve Jagler is executive editor of BizTimes Milwaukee.
11 Comments
And don't forget Alice.com out in Madison is poised to become a major on-line retailer. One thing that Wisconsin has is access to major transportation hubs.
Half the time what is needed to be remembered about the critics is that they have an axe to grind, the their philosophies aren't cutting it when it comes to business growth coupled with quality of life.
Your post illustrates the tremendous taxpayer resources expended in the form of efforts by taxpayer supported governmental, and government funded entities, as well as the extraordianry volume of taxpayer funded "incentives" (read: "bribes") necessary to overcome the reluctnce of firms to locate here. This redistribution of wealth from taxpayer- producers to businesses who have learned to tap into the flow of this redistributive scheme is necessary because the advantages owing to our geography and our diminishing stock of legacy assets (such as an educated populace) are not sufficient to overcome our business climate. Those in denial tend to focus on anomalies that comfort them and enable their acquiescence--even if the anomalies are artifically generated.
By the way, will the journalist class ever publicize the full costs of the incentive programs (e.g. Mercury Marine)--or is that more of the negativity that ought to be suppressed lest the taxpayers question the volume of their support for the transferee class? They might question whether it is economically sound to transfer their money to Brunswick and the machinists rather than to leave it in the hands of the taxpayers to spend and invest. They may wonder why that money is supposed to be more economically potent when it is cycled through the bureacracy? Better to preserve the myth that the government will spend the money more wisely.
TJ Writes;
Let me get this straight, 1000 jobs from Uline, up to 30 jobs from the Minnesota Biotech company, Mercury Marine staying here by not having to pay millions of dollars in taxes, Republic Airways adding up to 800 jobs after it cut up to 800 jobs earlier this year, and a Spanish company that may set up shop here: is this the Train company that Doyle said was going to Janesville and Milwaukee after he bought train cars from them with no place to use them?
A few thousand jobs are created while tens of thousands are lost, sounds like a net negative to me.
Briggs continues to move out, Target and Menards build else ware, Kohl's moving jobs, GE Medical, GM Janesville, Chrysler Kenosha, and Johnson Controls all continue to move jobs out of Wisconsin.
Hey Steve, start your own business or work for an established non-service company in Wisconsin and go through the regulations, workman's comp, computer tax, prevailing wage, bank loans. Pay the wheel taxes on your fleet, the property taxes, the snow removal fees, the paving assessment, the sick leave, the high health insurance rates.
Pay the combined reporting, high income taxes, download taxes, tipping fees, gas tax, the list goes on.
If Wisconsin is such a good business climate, why are we losing jobs and people?
You do the math...
The comments illustrate what we're up against here ... A cynical, self-defeating mindset that would rather complain about everything than celebrate anything. The grass is always greener ...
Wisconsin just beat out Oklahoma, Denver, Indianapolis, Minnesota, North Dakota and other places for a few thousand jobs and more appear to be on the way.
If you don't think this has been a win for Wisconsin, check out what they're saying in Denver:
http://denver.bizjournals.com/denver/stories/2009/11/09/daily22.html
"The city of Denver and state of Colorado worked closely with Republic over the past few months in an effort to keep as many jobs as possible here locally," Colorado Gov. Bill Ritter said. "However, as competitive as our package was, Milwaukee offered incentives we simply didn't have available to us. While we respect Republic's business decision, it's still disappointing."
They're crying the blues in those other states because they lost out to Wisconsin. Quit your whining and get back to work.
Wisconsin is a love or hate state--about more than B. Farve. People here tend to see very little gray. Yes Wisconsin's business climate is not as bad as WMC would have us believe. But yes we need to do a lot more. At a minimum, if we changed tax law to keep wealthy elderly from moving our of state, we'd have more investment capital for our growing tech sector. If we designed government municipal structure for the 21st century, we'd have lower property taxes and more money for our schools.
The core problem is that our state lacks a vision and so we focus on what is right or wrong versus what could be --- a state in which we'd all be better off.
It truly is a case of see the trees but not the forest. Steve, two minutes with a calulator shows us we are paying $45,000 from taxpayors per new job. From experience the average job pay will work out to roughly $32,000 with benes for the worker. So our super smart government lost roughly $13,000 per job. Where did the money go?
Secondly, the companies that our government are gifting with bribes compete with other companies; in some circumstances with Wisconsin companies. What criteria did our government use to give such a competitive edge to the newcomer at the expense of the incumbant Wisconsin company AND the workers of the incumbant company?
Lastly, in all your examples, Wisconsin gave companies tax breaks to convince them to come to Wisconsin. Isn't this fact the BIGGEST red flag that our tax climate is way out of whack?
So now we are a tax hell BUT if you are a new company or you threaten to leave we'll take the tax burden off you AND we'll strap the home town businesses and workers with the cost by upping their taxes to pay for it.
How is it smart people do not see the whole picture?
New jobs in Wisconsin are good news, but at what cost? A chimp could throw taxpayer money at a company to get them to move to your state, it is just a matter of price. Businesses and taxpayers in Wisconsin that have not kissed Dirty Diamond Jim Doyle's ring will end up paying for these photo-ops. The governor of Colorado said they couldn't match what Wisconsin provided Republic- how much of my money did Doyle give away?
This whole system of high taxes with a select, politically-connected, few being able to cut deals to reduce their specific costs is not democratic and establishes an environment for rampant political corruption - the perfect world for Jim Doyle.
Finally, Bob Johnson is correct- the big picture is the issue- does Wisconsin have a net gain or loss in job migration? And specifically job migration that is not loaded with incentives paid for by taxpayers.
Some of these comments are hysterical. These people who are complaining about the corporate incentives to keep or bring companies here would be the first people screaming bloody murder if Wisconsin had lost the 2,000 Mercury Marine jobs or the 1,600 Republic jobs or all the other jobs mentioned here. There may be a front end costs to the taxpayers to keeping these jobs. But I guarantee you that they will be paid back in spades over time in income taxes and and sales taxes as the people with the jobs spread the money around. Sometimes you have to spend some money to make some money. These buffoons want it both ways, and they just want to complain. These are victories for Wisconsin ... Victories other states wish they could take away from us. Get a grip.
Thank you Wolters. As I said- even a chimp could throw taxpayer money at a company to get them to move to Wisconsin, it is just a matter of price.
I do believe the Uline jobs may be coup- depends on the total taxpayer cost per job. In fact, if Wisconsin got its act together on taxes, it could make a respectable run at drawing small to medium size companies from the Chicago metro area.
What is especially enjoyable was seeing Wisconsin beat out the TABOR paradise of Colorado for the Republic jobs.
This tax cutting mania is not an economic strategy, but but part of aa cult-like belief system that persists despite the economic evidence to the contrary, like fore example the past 30 years.
RE Schmitz- You must believe the stimulus was a good idea too- that may explain everything. So Keith, being that you like the Republic deal so much, please tell us what the incentives were to get them here. Big government cultists like you apparently don't have the wherewithal to understand, or just don't care, that you can pay too much to buy jobs, just as long as it big government that is buying with taxpayer money.
I'll say it one more time, a chimp can buy jobs, it is just a matter of price.