Friday, October 07, 2005

Georgia-Pacific On His Mind

Papermaking giant Georgia-Pacific announced plans October 4 to lay off hundreds of its Green Bay plant employees almost a year to the day after it was handed a forgivable $500,000 state loan by Governor Jim Doyle to help retrain the plant’s employees.

The October 5, 2004 giveaway was sandwiched in between $5,000 worth of campaign contributions the company’s political action committee gave to Doyle between October 2003 and March 2005. He received $1,000 worth of those contributions a week after the company received the loan. Doyle had not received any contributions from company executives before becoming governor.

On top of the loan, Doyle wrote budgets or signed bills to create a $45 million a year corporate tax cut and a $26 million a year sales tax exemption on electricity used in manufacturing, both of which benefit Georgia-Pacific. More directly, he approved a $1 million a year break on garbage disposal fees paid by paper companies to pay for disposing PCBs they dumped in the Fox River, and $2.1 million in state spending to rebuild a dock wall for the company.

All of this for a company that had profits of $359 million in 2003 and $771 million in 2004. Georgia-Pacific executive Pete Correll gushed about the company’s 2004 performance in a February 1, 2005 press release: “This has been an outstanding year for Georgia-Pacific.”

But those big profits and a heaping helping of corporate welfare from the state apparently don’t satisfy the company’s appetite. The company said its recent round of layoffs and plant downsizing are designed to save $100 million a year in hopes of boosting profits to $1.2 billion by the end of 2006.

This episode echoes the findings in a Wisconsin Democracy Campaign report that shows millions in state assistance going to large multi-national corporations that do not need it or create few if any good jobs but which make large campaign contributions.

The practice even prompted former Republican Assembly Speaker Scott Jensen, a longtime darling of big business and other powerful special interests, to say last March that “I’m afraid we’re turning into rubes here in state government” because the state gives away money and breaks every time a business claims to have better offers in other states.

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