The Ten Worst Northeast Wisconsin Corporations Of 2003
January 3, 2004
by Tony Palmeri
In 2002, guided by the example of Multinational Monitor, I identified the worst Fox Valley corporations of 2001 which the editors of Multinational Monitor saw fit to publish as a letter to the editor. Last year I identified the worst Fox Valley Corporations of 2002, with Wal-Mart, Plexus, Gannett, and Aurora having the dubious distinction of being on the list both years. Two of them (Wal-Mart, Gannett) make the list yet again this year.
In fairness to the corporations on this year's list, they are but one-third on the problem facing northeast Wisconsin. Government and establishment media join the corporations as part of an Iron Triangle that at every turn puts the needs of elite developers and well connected insiders ahead of average citizens and taxpayers.
The problem is of course not unique to northeast Wisconsin. I encourage readers from other parts of Wisconsin to compile a list of bad actors in their neighborhood.
Because in the past the regional label "Fox Valley" has been confusing to some readers, this year I use the label "northeast Wisconsin." Generally I am concerned with activities occurring in Winnebago (largest city = Oshkosh), Outagamie (largest city = Appleton), and Brown (largest city = Green Bay) counties, though this year's list includes a Manitowoc County entry.
And now the ten worst northeast Wisconsin corporations of 2003:
*The Tradition Killer: AxleTech. For about four decades Rockwell Axle was heralded as one of the best places to work in the city of Oshkosh. Former employee Bob Kitz told the Oshkosh Northwestern that, “I think what really made it a good place to work was they gave you consideration — it was teamwork between the employees and the management." All that changed when Axle Tech took over operations of the plant in late 2002. Guided by an investment consulting firm skilled in the art of extracting concessions from workers, by early 2003 union employees were faced with the dilemma of taking a major pay cut (along with giving up other benefits) or losing their jobs. They took the cut, and thus AxleTech succeeded in killing a fine tradition of labor/management cooperation in the city.
According
to the Oshkosh Northwestern, "AxleTech has reduced its work force by
50 percent (from 300 to150) since reinitiating contracts with UAW after buying
from Meritor at first of year." So much for protecting jobs in return for
concessions.
*No Name Shame: Oshkosh B'Gosh. This company long ago moved all production out of Oshkosh. In 2003 they announced a goal to move production out of the United States entirely, eliminating 129 jobs in Celina, Tennessee and Liberty, Kentucky. The press reported that 14 additional employees were laid off at the Oshkosh headquarters.
Imagine how strange it would be if the Milwaukee Brewers moved to Honduras and yet still called themselves the Milwaukee Brewers. Why isn't B'gosh management ashamed to continue using the name Oshkosh? I think in 2004 the Oshkosh Common Council should pass a resolution urging B'gosh to either change its name or pay a special fee to the city for privilege of being able to continue to use it.
*Another NAFTA Debacle: Newell Rubbermaid. In February of 2003 Mirro Company, whose parent was Newell Rubbermaid, announced that by September it would be laying off close to 900 Manitowoc workers and move production to Mexico. Four unions (Local 6499 of the United Steelworkers of America, Local 516 of the International Association of Machinists, Local 7415 of the Paper, Allied-Industrial, Chemical and Energy Workers and Local 158 of the International Brotherhood of Electrical Workers) representing workers making on average $14.50 were not able to save any of the jobs.
Manitowoc Mayor Kevin Crawford asked the Common Council to pass a resolution expressing the negative impact the North American Free Trade Agreement has had on the city. Crawford said that Newell-Rubbermaid “has done nothing for the city of Manitowoc, the county of Manitowoc and the state of Wisconsin." The council did pass the resolution, but unfortunately such measures at this point fall into the "too little, too late" category. Local governments were caught sleeping in the late 1980s and early 1990s as the Bush #41 and Clinton administrations laid the basis for NAFTA, and now our communities are seeing the devastation that anti-NAFTA activists predicted at the time of its passage.
*Cross Ownership Crapola: The Gannett Corporation. In June the Federal Communications Commission (FCC) voted for changes in media ownership rules that I referred to as the "mother of all deregulation schemes." In one of the largest grassroots demonstrations of outrage in the history of the nation, more than 3 million Americans contacted their representatives to demand an overturning of the FCC decision. The Congress did pass legislation that would restore the safeguards against further consolidation, but citizen vigilance must continue as the legislation still must pass the House of Representatives while the Bush administration threatens a veto.
In northeast Wisconsin all major newspapers are owned by the Gannett Corporation. The coverage of the FCC action has been awful, with editorial boards failing to acknowledge clearly Gannett's support of the loosening of newspaper/television cross ownership rule or the potential consequences of the relaxation of safeguards. Jay Heck of Common Cause in Wisconsin provides an explanation of the consequences for Wisconsin:
In Wisconsin, under the old rules, a minimum of seven companies could own all of the commercial television stations in Wisconsin, and they were prohibited from also owning radio stations or newspapers. Under the new rules, five companies could own all of the commercial television stations and still also own some radio stations and newspapers. Statewide, a single company could own up to eight television stations, up to 33 radio stations and several newspapers.
The Green Bay-Appleton and Madison markets would suffer the most consolidation under the new FCC rules. A single company could own up to one television station, one newspaper and three radio stations in either market; or up to two television stations and seven radio stations; or up to one newspaper and seven radio stations.
These changes will do more than affect play lists and reduce entertainment options on television. They threaten our very democracy, which depends on a competitive media that promotes many viewpoints and ideas to educate and engage citizens in government and society. We need more diversity on the public airwaves and in newspapers, not less.
According to the Consumers Union, the recent merger of Rupert Murdoch's Fox TV and DirecTV is an example of what is wrong with the FCC's ownership rules.“This merger illustrates everything that is wrong with the FCC’s new media ownership rules, which take a bulldozer to the pillars that support our democracy by destroying competition, checks and balances between media outlets, and diversity of views presented in the media," said Consumers Union senior policy director Gene Kimmleman.
Northeast Wisconsin residents must demand that the Gannett press provide fair and balanced coverage of media ownership issues--issues that exert a powerful influence on the quality of our democracy.
*The Conquering Lobby: Wisconsin's Paper Industry. Through its lobbying organization, the Wisconsin Paper Council, the Wisconsin paper industry in 2003 succeeded in getting its major public policy initiatives into law. Unfortunately, none of these initiatives benefit the public. The worst example is the misnamed "Job Creation Act of 2003," a bill literally written by lobbyists and rushed through the legislature with no public comment. According to the Wisconsin Democracy Campaign, "collectively the special interests that back this bill gave $6.97 million in large individual and political action committee contributions to current legislators between 1993 and June 30, 2003." Caryl Terrell of the Sierra Club says that "the only jobs being created are for undertakers and asthma doctors" while Melissa Scanlan of Midwest Environmental Advocates could get no evidence from the legislative leaders to support their claims of job creation.
Wisconsin Paper Council president Pat Schillinger applauded the "bipartisan effort to address our concerns" in the job Creation Act, and the Council also praised the legislature's passage of Assembly Bill 507 (tax break for the paper industry) and the "Single Sales Factor" corporate tax reform. All these measures taken together will take money from the public treasury without any guarantee of job creation. In the case of the Job Creation Act, the allowances for relaxed environmental protections of water and air may end up wrecking the state's tourism industry. All in all, quite a set of "accomplishments" for an industry that has yet to meet its responsibility to clean up the Fox River.
*Downtown Oshkosh Deadbeat: Heyde Hospitality. Downtown Oshkosh has enough problems attracting live bodies, and the situation surely isn't helped by the fact that the Park Plaza Hotel and Convention Center (formerly the Hilton) is owned by tax delinquents. According to the November 13, 2003 Oshkosh Northwestern, "Heyde Hospitality owes the city $552,000 in past due taxes, ground lease and utility charges. Heyde Hospitality ran up some of that total and MinWis Acquisition Co. amassed the remainder, after it took over management of the hotel in June 2002. Still, Dennis Heyde, president of Heyde Hospitality and CO-owner of the hotel, acknowledged that he essentially owes the entire sum to the city." Oshkosh Convention and Visitor's Bureau (CVB) Executive Director Wendy Hielsberg told the CVB board of directors that at least two conventions might relocate to another city in 2004, and that 2005 is looking "soft."
*Old Boys Rule At Associated Bank. In April Kristine Martinsek, a shareholder in the Green Bay based Associated Bank, wrote a sharply worded letter to the Investor Relations Department (IR). In it she requested a withdrawal of IR authority to cast her vote for a slate of all male board of director candidates at an April 23 meeting. According to the June 9, 2003 Milwaukee Business Journal, "Associated's 11-member board currently comprises white men, as does its six-member executive committee and roster of nine regional bank presidents, according to the bank holding company's 2002 annual report. Four women do serve on Associated's nine-member leadership team, but there are no minorities."
The Journal report went on to say that when Associated shareholder Denise Gaumer, a labor consultant to the Wisconsin Education Association Council's Green Bay office and president of the Green Bay-De Pere Chapter of Business and Professional Women USA, attempted to read Martinsek's letter into the record at Associated's April 23 meeting at Green Bay's Meyer Theater, "she felt both resistance and some degree of sarcasm from Robert Gallagher, Associated's chairman and outgoing president and chief executive officer."
In its June 16th issue, the Milwaukee Business Journal editorialized that, "If Associated executives really want to send a message that they're serious about working with women and minorities, the company needs to make a stronger commitment to appointing women and minorities to upper management and board positions."
New Associated Bank CEO Paul Beideman says he is committed to enhancing diversity among the top echelon of executives, but the fact of the matter is that it took until 2003 and a sharp shareholder letter to get some movement.
*Procter & Gamble's Slap on the Wrist: The American Lung Association gives Brown County an "F" on air quality. So when the Clean Water Action Council in February threatened to sue Procter & Gamble for air pollution permit violations, a golden opportunity was presented to the Department of Natural Resources and the Department of Justice to demonstrate a willingness to enforce regulations strictly with a company that has over $40 billion in total assets. The state ended up settling with P & G for $81,091 in spite of the fact that the law would have allowed a demand for over $7 million. The settlement with the state also by law prevents any other private party from pursuing the case any further. Were it not for the hard work of CWAC and two attorneys working on behalf of Midwest Environmental Advocates, it is doubtful that the state would have enforced the law at all.
How tragic that big corporations like P & G can pollute with the knowledge that even if they are caught the result will be nothing more than the equivalent of a slap on the wrist.
*It's the Money, Stupid: Health Care in Northeast Wisconsin. Northeast Wisconsin's three major health care systems include Affinity Health Systems, ThedaCare, and Aurora Health Care. Representatives of each "feel our pain" when it comes to rising health care costs, yet show little sign of doing anything substantial to lower those costs. In fact, just before a new Aurora facility opened in Oshkosh in 2003, Affinity CEO Kevin Nolan virtually guaranteed rate increases. He told the Milwaukee Business Journal, "At the end of the day we will see health care costs go up in Oshkosh. When Aurora went into Green Bay, costs did not go down." Meanwhile ThedaCare CEO John Toussaint expects citizens to believe that the creation of a consortium designed to make health care information more public is somehow going to reduce skyrocketing costs.
As for Aurora, the fact that they continue to claim that entry into the Oshkosh market will not affect costs significantly is contradicted by what has happened in other counties. According to the Green Bay Press Gazette, "In two other counties where Aurora built hospitals, most of the new hospitals’ average charges for 10 procedures started at or surged to the top in each market."
*Mindless Local Development: Wal-Mart. When Wal-Mart opened a supercenter in Oshkosh in March of 2003, it didn't take a rocket scientist to know that the results would be drastic. It took only until August for Cub Foods, one of the better grocery employers in the region, to announce it would close. Steve Dedow of the Winnebago County Labor Council points out on his union's web page that the typical big box retailer spends only 14% of its revenue in the local and state economy, with the rest going to out of state suppliers or corporate headquarters. Dedow continues:
From a local perspective, the Wal-Mart Superstore in Oshkosh is a good example of this type of mindless local development. The Cub Foods store down the road less than a mile away on Witzel Street went out of business less than a year after Wal-Mart opened its doors. The employees at Cub received around $9.83 per hour with full benefits while the "associates" at Wal-Mart receive a little over $7.00 an hour with no benefits. Which employee is going to put more back into the local economy? Which employee is more likely to receive state medical assistance? Which employee is going to have a better standard of living? . . . How much property tax revenue is the closed Cub Foods store going to add to our economy?
Speaking of mindless, in December the editorial board of the Oshkosh Northwestern urged readers to boycott the downtown Exclusive Company (a compact disc store) because the owner exploited a Tax Incremental Finance district (which should not have been created in the first place) and has not made good on his promise to move his store into a Main Street building that has been an eyesore for some years now. We should boycott a store because it has not moved to a different location at the same time the Wal-Marts of the world destroy local economies? Shouldn't the paper be urging a boycott of Wal-Mart instead?
In conclusion, this essay has addressed poor corporate behavior in only a small region of the state of Wisconsin. The problem exists in all parts of the state, and even our state legislature is currently dominated by interests that are often in league with the entities mentioned in this essay. The Wisconsin Democracy Campaign's November of 2003 report on "Cash and Carry" demonstrates in shocking detail the extent of special interest domination of the legislature, including substantial corporate influence.
Standing against the Iron Triangle of government, big business, and big media can be daunting, but failure to stand up to them will mean a continued weakening of our democracy and destruction of our communities in the interest of pure greed. A good starting place for understanding how to take power back from the Iron Triangle is Richard Grossman and Frank Adams' classic 1993 "Taking Care of Business: Citizenship and the Charter of Incorporation." Grossman's Program on Corporations, Law, and Democracy is a small group of activists that try to provide research and other types of support for grassroots democratic movements attempting to reclaim control of their communities from the grip of government and media assisted corporate raiding and plundering.