Scott Walker's Selective Attack on Offshoring

By ROGER BYBEE

Faced with Democratic gubernatorial candidate Mary Burke recently surpassing him by a 46%-45% margin in a recent poll, Wisconsin Gov. Scott Walker has unveiled a credibility-challenged anti-offshoring ploy to divert attention from his glaring liability on jobs, by attacking Burke for the offshoring of jobs to China by Trek Bicycle, the family firm Burke formerly headed.

With recent ads, Walker has blamed Burke for Trek’s shift of jobs to China, neglecting the fact that Trek remains the only firm manufacturing bicycles in the US. Trek operates plants at its headquarters in Waterloo, Wis., as well as Germany and the Netherlands. Further, “'Mary had nothing to do with sourcing decisions at Trek,” according to her brother John, Trek’s current president.” Those decisions were made by my father and myself.” Mary Burke’s role at Trek actually involved overseeing the marketing of the firm’s bikes in Europe for three years.

Walker’s offensive—singling out Trek alone amidst all the dozens of larger Wisconsin firms with offshore production sites-- is driven by his need to deflect the public spotlight away from his abysmal record on jobs in a state still mired in the effects of the Great Recession.

Walker is now weighed down by his failure to even remotely approach attainment of his central campaign pledge in his 2010 campaign: that he would oversee the creation of 250,000 jobs. Walker is on a pace that would show the state meeting a paltry 37% of his goal. Wisconsin ranks 37th in the nation in the rate of job growth, and is lower than all the other Midwestern states. Further, Wisconsin private-sector wages rank 15% below the national average, and public-sector workers.

But Walker and his advisors are surely aware of the growing urgency of the offshoring issue in voters’ minds. An October, 2010 Wall Street Journal/NBC News poll showed the remarkably strong and widespread public anxiety—86% overall—over the export of jobs. This concern is well-founded in the realities of the US economy, increasing globalized to benefit major corporations. The extent to which US firms have transferred vital functions overseas is truly breathtaking: “By 2008, 48% of all sales by Standard and Poors top 500 US firms were of items produced outside the United States,” economist Jeff Faux wrote in his 2012 book, The Servant Economy: Where America’s Elite is Sending the Middle Class.

From the viewpoint of labor leader and economist Michael Rosen, Walker’s accusations about Burke drew a snort of disgust. “As if anyone could believe that Walker care about jobs going overseas or about workers in general,” he snapped. Rosen is president of American Federation of Teachers Local 212 at Milwaukee Technical College, whose members have been hit hard by the wage and benefit cuts of about 11% in their take-home pay imposed by Walker’s fiercely-resisted Act 10 (just upheld by the state Supreme Court’s reactionary majority.)

In line with former Nixon aide John Dean’s observation that “Walker is more Nixonian than Nixon,” past AFL-CIO President David Newby commented, “It just shows how Scott Walker is willing to say anything to get elected.”

But Walker’s ardent and deep-pocketed allies on the Right and in Corporate America have been little more pleased than Rosen and Newby by the governor’s foray into what they view as “class warfare.” Conservative Real Clear Politics writer Tom Bevan observed, “It smacks of desperation.”

The Wall Street Journal, which cheered on Walker’s 2011 war against public employees, ran a piece accusing Walker of “taking a page from Team Obama,” referring to Obama’s attacks on Mitt Romney’s Bain Capital for the offshoring of jobs. (In reality, Obama has actually promoted (See here, here, here, here and here) an additional set of NAFTA-based trade agreements that would foster the transfer or more jobs overseas while his scathing ads against Romney effectively mobilized the majority of Americans who oppose the export of jobs to repressive low-wage sites like Mexico and China.)

Leaders of the Wisconsin Manufacturers and Commerce lobbying felt caught off-guard by Walker speak out against offshoring, which has been a central for lowering labor costs both overseas and in the state. As the Milwaukee Journal Sentinel reported, “All that has put WMC and its president and chief executive officer, Kurt Bauer, in an unusually delicate position. In a statement Wednesday, Bauer made an indirect defense of both Walker and companies with overseas plants by pointing to legislation signed by Walker in 2011 that is virtually eliminating income taxes for profits from Wisconsin manufacturing plants.”

Another important corporate voice, former Serigraph CEO John Torinus, remarked “Isn’t it strange when a pro-business Republican governor finds it advantageous to bash an entrepreneurial company with 1,000 jobs in Wisconsin to put the hurt on his opponent?”

Wisconsin’s Republican Senator Ron Johnson, a multi-millionaire who owns a plastics firm in Oshkosh, was also distressed with Walker’s new course. "Far too often in the political realm we demonize success, we demagogue against it," he stated. "What we should be doing is incentivizing success. “

Johnson need not worry that Walker is serious in his denouncing of offshoring or mocking the accumulation of large-scale wealth (Walker’s staff has dubbed Burke “Millionaire Mary.”)Walker, after all, has been an ardent supporter of NAFTA-style “free-trade” deals including those proposed by President Obama.

Moreover, “The weird thing, of course, is that Walker has been a proponent of trade policies that encourage outsourcing, and a defender of Republicans — including Mitt Romney — who help ship U.S. jobs overseas. Indeed, Walker has traveled to China to promote a vision of trade relations that includes outsourcing,” progressive journalist John Nichols stressed.

Moreover, the authenticity of Walker’s attack on offshoring was forcefully undermined by a new report from the liberal research and advocacy group One Wisconsin Now.

Along with noting that 60% of job-creation funding from the Walker-privatized Wisconsin Economic Development Corporation has been directed to Walker donors, recipients, One Wisconsin Now pointed out that a number of grants had gone to firms engaged in sending jobs outside the state and nation.

For example, one set of recipients was a group of executives connected with the Polaris Corporation, which decided to move jobs to Mexico despite an enormous increase in profit—a decision so crass that it provoked a plaintive outcry from Greta Van Susteren of arch-rightist FOX News:

"It's a small town of about 2,500—515 employees, 600 families. So that means essentially that every single family lost a job. ... A company like this wiping out a town and moving to Mexico and it's already making 89 percent growth in its stock in a year is not contributing to our economy."

The Polaris move clearly did not reinforce the narrative offered by advocates of wholesale offshoring—that US firms need to manufacture near their markets to be in touch with consumer tastes—since presumably Mexico is not a major market for snowmobiles.

Wisconsin communities continue to be hammered by the outflow of jobs, with China and Mexico especially favored sites. Walker, on the one hand, has been frequently lashing out at Illinois Democratic Gov., Pat Quinn and increases on business taxes, hoping to poach a few northern Illinois jobs across the border to Wisconsin.

But when it comes to major Wisconsin-related firms shifting jobs out of the state, Walker, like the watchdog in the Sherlock Holmes story “The Silver Blaze, has been “the dog that didn’t bark.” Only with the Trek Corp. has Walker chosen to speak out against the offshoring of jobs.

Among the firms announcing relocation of jobs or expansions in these nations—portending in many cases a loss of Wisconsin jobs in the future—is a substantial list:

§ Harley-Davidson, whose CEO was part of a tour with President Obama of India and China, is building a new plant in India, despite major concessions and job losses in Milwaukee and Erie Pennsylvania.

§ Thermo-Fisher, based in northeast Wisconsin, is moving about 1,100 jobs from Two Rivers to Mexico.

§ The Manitowoc C0., whose CEO Glenn Tellock sits on the board of Wisconsin Manufacturers and Commerce, is moving 150 jobs to Monterrey, Mexico.

§ General Electric has moved the headquarters of its Medical Equipment Division to Beijing, China from the Milwaukee suburb of Waukesha, surely meaning that more advanced product lines will be developed and manufactured there rather than Waukesha.

§ Johnson Controls has shut down virtually all production in in its hometown of Milwaukee--including one instance where workers were honored for their years of service to the company on a Friday and then told the following Tuesday that their jobs were going to Mexico. Johnson Controls now “plans to increase its number of production locations from 57 to 68 in China over the next few years.”

§ Oshkosh Truck is opening a new facility in China while shedding 760 workers in Wisconsin.

§ Harley-Davidson, whose CEO accompanied President Obama on a trade mission to India and China, is opening a new plant in India despite sharp concessions and job cuts extorted [see here and here] in 2010.

§ Caterpillar, which has been waging a campaign [ see here and here] to wrest concessions from workers to workers despite profits of $5.7 billion in 2012 amounting to $45,000 per worker, laid off 300 workers at its South Milwaukee facility while forcing wage and benefit concessions from the United Steelworkers there in an usually lengthy six-year contract.

Meanwhile, “Caterpillar now has 24 factories, four research and development facilities and three logistics and parts centers in China. The company has more than 15,000 employees in China.” As with the GE medical division, the research facilities in China seem to suggest that not only production jobs, but also research, engineering, and technical jobs will be sited in China instead of Illinois or Wisconsin.

Summing up the overall picture that has gained attention thanks in part, ironically, to Walker’s complaints about Trek, Frank Emspak, professor emeritus in labor studies at UW-Madison, drew grim conclusions.

“The state has been financing companies more incentives whether or not they locate in Wisconsin,” Emspak stated. “We have needed identifiable and verifiable measures on job creation. But what you have had is nothing verified or guaranteed that the jobs will not go overseas.”

In the past, pro-corporate politicians of both parties—notably Bill Clinton and Al Gore for the Democrats-- have fostered the notion that the US can afford to lose manufacturing jobs overseas while Americans step up to higher-skilled and higher-paying technical jobs.

But, said Emspak, it turns out that manufacturing and technical, design, and engineering jobs are intertwined. “So we’re seeing the loss of high-end jobs in the most productive, most value-added, most technologically-advanced occupations going overseas to China and elsewhere. The promised ‘jobs of the future’ that were supposed to replace manufacturing are now being lost offshore, too. “

If Walker’s absurd and hypocritical charges start to get Wisconsinites focused on these realities, then the most divisive governor in the state’s history will have truly performed a valuable service.

Roger Bybee is a Milwaukee-based freelance writer and University of Illinois visiting professor in Labor Education. Another version of this originally appeared at InTheseTimes.com.

From The Progressive Populist, September 15, 2014