Thursday, July 21, 2016

Welspun layoffs: Another example of corporate welfare folly

Posted By on Thu, Jul 21, 2016 at 9:14 AM

WHERE ARE THEY NOW: Republican politicians such as Tom Cotton and Tim Griffin regularly used Welspun as a backdrop for attacking the Obama administration on the Keystone pipeline. Maybe now they'll blame him for low oil prices that have caused loss of jobs at Welspun. - KUAR
  • KUAR
  • WHERE ARE THEY NOW: Republican politicians such as Tom Cotton and Tim Griffin regularly used Welspun as a backdrop for attacking the Obama administration on the Keystone pipeline. Maybe now they'll blame him for low oil prices that have caused loss of jobs at Welspun.

the pipemaker, has laid off more than 100 from its plant at the Little Rock Port because of the global downturn in oil prices, the Arkansas Democrat-Gazette reported today.

Some observations:

* KEYSTONE PIPELINE: This has NOTHING to do with the Obama administration's refusal to allow the Keystone XL pipeline through the American heartland to ship Canadian tar sands across a sensitive aquifer to Texas refineries hoping to produce products to sell overseas. NOTHING. That pipe was already made at Welspun and sold.

* CORPORATE WELFARE: Welspun has received at least $6 to $7 million in corporate welfare payments of taxpayer money to locate at the port. Jobs are jobs, though these were not particularly highly compensated. The average pay was $17 an hour, but that was inflated by a relative handful of high-wage and technical jobs that lifted the lower end employees, many of them part-time laborers.

Arkansas doesn't seem likely to ever learn that we are not immune to global economic forces or that we are not an independent entity unto ourselves. You give away tax money to someone depending on the global energy market and forces beyond the governor of Arkansas's control might come back to bite you on the rear.

The Welspun layoffs come on the heels of recent reporting on the Fayetteville shale bust. That was another example of corporate welfare blindness. We gave the gas industry preferential tax treatment and lax environmental regulation and allowed them to tear up roads all the while saying any meaningful demands on the industry would "kill the goose that laid the golden egg." Well, that goose laid an egg. Gas prices plummeted; gas exploration has come to an end. We are left with the waste pits, the crumbled roads and people looking for work elsewhere. Some royalty owners made some money. The state's return on investment isn't so great.

Welspun won't reveal details about its precise employment. The state seems to believe that employment hasn't dipped low enough to kick in any clawback provisions on the taxpayer money we gave away. Perhaps I misread, but state officials don't seem too anxious to even inquire. The company received tax rebates for new jobs twice, jobs that may have evaporated.

* WATCH THAT PULP MILL: All the more reason to keep your eye on the humongous corporate welfare payment Gov. Asa Hutchinson sent to a Chinese communist billionaire to open a pulp mill near Arkadelphia — welfare that was hardly needed given the cheap timber supply that made Arkansas an obvious choice. Stay tuned. Many questions remain about what exactly that plant will produce; whether the Department of Environmental Quality is doing an adequate review of the proposal; water quality from plant discharges; the traffic of pulp haulers on county roads; and lots more. To date, all the representing for Sun Paper has come through a spokesman for the Mullenix lobbying firm and if that doesn't give you pause about the public interest, I don't know what would. They work for clients, not taxpayers, but they are hard-wired into the Republican power structure. The construction timetable has already been pushed back by six months, by the way.

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