“Keeps on going…?”

We had no sooner emerged, dazed and happy, from the election, than Franklin County got hit with a blast of really bad news.  

A  60-year+ economic fixture in St. Albans Town, Energizer announced Thursday that it will soon be closing its doors in the Town and laying off all 165 employees.  

Tim Smith, executive director of the Franklin County Industrial Development Corporation believes the county will not be seriously impacted by the closing, given that projected economic growth includes a planned expansion of Mylan with 150 new jobs; but the announcement seems to challenge a popular conservative talking point, that tax breaks are the best way to retain quality investment in Vermont.  

According to Fred Kenney, executive director of the Vermont Economic Progress Council:

In 2005, the Vermont Economic Progress Council provided $2.5 million in tax credits over five years to Energizer, making the credits contingent on adding jobs and making capital improvements to the plant in St. Albans…Kenney said the level of employment at the plant has been dropping steadily in recent years.

Mr. Kenney further states that, despite Energizer’s possible non-compliance with the terms of those tax breaks, the state might not even be successful if it sought to reclaim the lost revenue.

Due to decreased demand for the type of specialty battery produced at the St. Albans facility, the company is downsizing; and even though those batteries will continue to be produced in Malaysia, by workers earning Malaysian salaries, they have no further use for their St. Albans workers.

Many were the times that Governor Douglas harped on how we would lose IBM if we didn’t do this or that for them (insert “keep Vermont Yankee going”; “build the Circ Highway,” etc.) regardless of the environmental consequences; and many were the times he scolded that Vermont is “bad for business.”

It appears, in this case that, having enjoyed a sweet tax deal for several years, Energizer would still prefer to build their batteries in Malaysia, where minimum wages have just been raised for workers to $297. per month.

I am sure that, if St. Albans workers could live on Malaysian wages, the tax break might have succeeded in buying Energizer’s loyalty as it was supposed to do.  But as things now stand, Vermont is just out a whole bunch of money it could have used to retrain the 165 displaced workers.

When IBM finally raises its skirts and exits Vermont, it will not be because we haven’t bought enough of its loyalty through corporate blackmail.  It will be to take its Vermont operations to a distant land where workers earn pennies on the U.S. dollar.

What will it take to get policy makers to realize that we cannot compete on the “bottom line” unless we are all prepared to live like third world laborers?  

We need instead to compete on “quality of life” measures, like universal healthcare, exceptional schools, a clean and beautiful natural environment, superb local foods, and a creative and exciting cultural milieu.  

That takes public investment, which we cannot make if we become the bargain basement for corporate location shopping.