Kimberly-Clark Uses GOP Tax Break to Sucker-Punch Wisconsin Workers
Early Wednesday morning, David Breckheimer, a United Steelworkers local union president at a Neenah, Wisconsin, paper factory, was gathering the last of his gear for a snowmobiling vacation.
At 7:45 a.m., less than two hours before he planned to leave, he got a call. It felt like a punch to the gut, he told me later that day.
Kimberly-Clark was closing its Cold Springs facility in Fox Crossing where David had worked 37 years, where 500 men and women earned a good living. Kimberly-Clark also was shuttering its Nonwovens factory in Neenah, costing another 100 workers their jobs.
The closures mean the virtual disappearance of Kimberly-Clark production in Neenah, the town along Lake Winnebago where the company was founded by John Kimberly and Charles Clark 146 years ago. It moved its corporate headquarters to Texas in 1985.
The terminations are part of a life-shattering pattern in Wisconsin’s Fox Valley, where Neenah and other paper mill towns are located. Once dotted with dozens of paper plants providing good jobs and middle-class livelihoods, the valley had been devastated over the past decade and a half as paper companies failed or fled, one after another.
The rise of digital communications is partly to blame. But more significant is government policy. The corporate tax breaks that Congressional Republicans said would create jobs are being used by some, like Kimberly-Clark, to kill jobs. And the government’s failure to enforce international trade law bankrupted many of the Fox Valley plants as China plastered the U.S. market with underpriced, illegally subsidized paper.
The result is pain for blue-collar workers in blue states like Wisconsin that went red in 2016 to give Donald Trump the presidency. Workers who voted for Trump believed his promises to crack down on Chinese currency manipulation and impose 45 percent tariffs on unfairly traded imports from China.
None of that has happened, however. The most those workers got from Trump in his first State of the Union address on Tuesday was more vague pledges to ensure fair and reciprocal trade.
Voters in the Fox Valley had good reason to hope for the bold change that candidate Trump proposed. Between 2000 and 2013, Wisconsin lost more than 90,000 factory jobs, including 17,000 paper mill positions as 34 paper factories closed. In that time, Wisconsin experienced the country's largest decline in the percent of households making a middle-class income, according to a study by the Pew Charitable Trusts.
In Fox Valley, the demise continues. In 2016, Graphic Packaging closed its Menasha factory, putting 228 workers on the street.
Last September, Appleton Coated closed in a bankruptcy, rendering 600 out of work. Appleton Coated sold the factory to Industrial Assets Corp., which allowed 38 workers to remain to maintain the machines. Also, in December, it recalled 50 to run one paper line.
In October, another paper company, Appvion, also in the town of Appleton, filed for bankruptcy. In November, it announced 200 of the company’s 800 workers in Fox Valley would lose their jobs. Also in October, U.S. Paper Converters, another Fox Valley paper company, announced it would close its factory in Grand Chute, eliminating 52 jobs.
Kimberly-Clark, maker of paper-based products such as Kleenex, Viva paper towels, Cottonelle bathroom tissue and Huggies disposable diapers, announced earlier this month that the corporation would use its tax cut windfall to pay the costs of closing 10 factories and dumping as many as 5,500 workers worldwide.
It wasn’t that Kimberly-Clark was insolvent. Just the opposite. Last year, its profit was $2.28 billion or $6.40 a share. For 2018, the corporation is shooting for more, at least $6.90 a share, by “reorganizing”—that is, ditching factories and workers.
The USW workers at the Cold Springs factory thought they would be spared. Their plant was profitable, and over the past several years, workers had collaborated with managers to reduce costs. Just a few weeks ago, corporate officials told the Cold Springs plant that it achieved the best overall cost reduction.
Also, the Cold Springs plant had been hiring, 53 last year and eight in January. It had given job offers to workers who were supposed to start this month.
The bad news caught the plant manager off guard too, David said. On Wednesday, as that shell-shocked supervisor notified workers of the corporate decision, he suffered a tongue-lashing. Workers were frustrated, upset and angry.
Some Cold Springs workers have been through this trauma before. They had worked at other Fox Valley paper plants that shut down. One told David on Wednesday that the Cold Springs shut down would be the fourth time that his life was turned upside down by a plant closure.
In 2016, another Neenah mill, Clearwater Paper, silenced two paper machines and laid off 85 workers. Some of them got jobs at Cold Springs. Now they’re out in the cold again.
David is worried about his co-workers, especially the young ones, those just recently married, who have big mortgages and little children. He’s concerned for the couples at the plant who had two good incomes and soon will have none.
With so many factories closed in the area, getting a good job is tough, he said. Walmart and fast food wages won’t support a family.
And then there are the older guys like David, with 25, 30, 35 years at Cold Springs. David is 57, an age at which getting a new job is particularly difficult. Cold Springs workers who are 55 or older and have 30 years in the factory can retire early, but they forfeit a quarter of their pension.
David and other local union officers began talking to Kimberly-Clark officials on Thursday about what the corporation will provide to the workers whose jobs it is eliminating—for example, whether it would offer them positions at other Kimberly-Clark factories in the United States.
David said he thinks the workers in Wisconsin’s Fox Valley who voted for Trump want to see some follow-through on his promises to create jobs, raise incomes and establish fair trade.
None of that is accomplished by the GOP tax scam that promoted off-shoring by granting corporations lower tax rates for overseas factories and that gave massive breaks to job-cutting corporations like Kimberly-Clark.
None of Trump’s promises are accomplished by speeches about fair and reciprocal trade when no action follows.