Job creation agency stumbles again as Oscar Mayer leaves

CAPITOL NEWSLETTER
Matt Pommer • Wisconsin Newspaper Association

A corporate decision to close the Oscar Mayer plant in Madison has created new embarrassment for the Walker administration’s job efforts.

The Wisconsin Economic Development Corp. (WEDC), the public-private agency created in the early days of Walker’s first term, seemed flat-footed when Kraft Heinz announced the closing. It will affect nearly 1,000 workers, including 650 unionized blue collar workers.

Other states had been in contact with Kraft Heinz, which owns Oscar Mayer, as the corporation studied changes in its meatprocessing plants. Top WEDC officials said local governments should notify it when a company is talking about leaving Wisconsin.

Reporters questioned Mark Hogan, the new chief executive officer at WEDC, on why the agency didn’t reach out to Heinz Kraft before the plant closing was announced. Hogan seemed to sidestep the questions, saying, “It’s what we say we do, and we should make sure we’re refocused on it and learn from everything that happens.”

Walker, who developed the WEDC approach in early 2011, spent much of the summer in a futile effort to win the Republican nomination for president of the United States. A Marquette University poll in mid-summer showed many people wanted Walker to focus on being governor rather than being a candidate for national office.

In the 2010 gubernatorial election Walker had promised to create 250,000 private sector jobs in four years. Wisconsin fell far short of the quarter million jobs. The Republican-controlled Legislature and Walker created WEDC as the linchpin in the job-creation efforts, replacing the Commerce Department, a state agency. Critics have questioned the haste in creating WEDC in the spring of 2011.

The agency has been plagued by a high turnover of top officials. In early November three vice presidents resigned, including its latest chief financial officer. There have been five top financial officers in just over four years.

Controversy also has followed the award of some of the WEDC grants to private companies The Legislative Audit Bureau this spring issued a sharply critical report on how WEDC had operated. Later it conceded making $126 million in awards to 28 companies without getting a written staff review prior to making the awards which occurred between 2011 and 2013.

U.S. Sen. Tammy Baldwin, D-Wi., recently ask federal officials to examine three loans made by WEDC.

One $500,000 loan was made to a struggling Milwaukee construction firm whose owner had been a major donor to Walker’s political campaigns. A Walker cabinet member had urged WEDC to make the loan.

The Wisconsin State Journal has reported the company owners apparently provided false information on the loan application. It was among the awards for which there had not been a formal staff review, the newspaper said.

This month Assembly Speaker Robin Vos, R-Rochester, said he will meet with Democrats about possible changes in the state’s job-creation efforts. He doesn’t need their votes to change WEDC. Gerrymandered districts virtually guarantee GOP control of both houses of the Legislature through 2020.

Vos might harbor ambitions of being governor. Bipartisan reform of Walker’s job creation efforts could be a political plus for him.


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