Should federal economic development dollars be used to subsidize the flight of jobs from one labor market (or state) to another?
Of course not! But members of the International Brotherhood of Teamsters (IBT) in Brisbane, California are blowing the whistle on just such a scandal.
A total of 183 workers at VWR International are facing permanent job loss as the company plans to relocate its facility from Brisbane (just south of San Francisco) about 230 miles to Visalia, California – into an industrial park subsidized by $2 million in U.S. Department of Commerce Economic Development Administration (EDA) funds. Teamsters in Brisbane have had a contract with the company for more than 50 years, but VWR is denying them the right to follow their work.
September 8 letter
to the Commerce Department protesting the deal, IBT General President James Hoffa is urging that it rescind the EDA grant to Visalia. Suspiciously, Hoffa’s letter points out, when Visalia applied to the EDA for the funds, it omitted the name of VWR from the list of beneficiaries—even though VWR is almost three times larger than any other listed park tenant.
Highway Robbery: The Road from Brisbane to Visalia, How VWR is Using Taxpayer Funds to Destroy Jobs, the Environment and Communities
, the report of a special investigation co-chaired by Congresswoman Jackie Speier and California State Treasurer Bill Lockyer, experts estimate the total job loss in Brisbane/San Mateo County at 266 jobs. The shutdown would also cost the City of Brisbane almost a fifth of its general fund revenue.
Reform Triggered by Stimulus Controversy May Aid VWR Workers
In a related revelation this week, Good Jobs First has learned from the Teamsters that Acting Commerce Secretary Rebecca Blank is taking the Teamsters’ complaint seriously, citing an EDA policy against subsidizing job flight from one labor market to another.
Further research reveals that
this EDA policy
dates to the summer of 2009, when EDA got caught in a dispute involving federal stimulus dollars (funneled through EDA) for interstate job flight.
Although the EDA policy memo doesn’t name names, avid readers of Clawback will recall that
in June 2009
, we cited the case of NCR relocating jobs from both Ohio and South Carolina into facilities near Atlanta, Georgia. One of those relocations, involving the manufacture of ATMs, was originally slated to be subsidized by about $5 million in stimulus monies via EDA. When public officials in Ohio protested the move (although jobs from South Carolina were actually moving into the EDA-backed facility, Ohio was losing a big corporate headquarters that had been in Dayton 125 years), the White House quickly removed the stimulus funds from the deal.
Now we learn, from the EDA policy memo that opens by referring to a summer 2009 “Recovery Act grant application that resulted in significant adverse publicity because of an accusation that funding would have facilitated the relocation of jobs from one community to another,” that in response to the NCR controversy, the EDA developed a “four-pronged nonrelocation policy.” Although the policy can be waived under certain circumstances, it would appear to disqualify runaways like VWR in Visalia (caveat: I am not a lawyer).
By adopting this policy, the EDA actually rejoins the ranks of virtually all of the major federal economic development subsidy programs with anti-piracy safeguards. Indeed, an alleged violation of EDA’s former anti-relocation policy was part of a plant-closing lawsuit I worked on 20 years ago that won $24 million for dislocated workers. And the existence of anti-piracy rules in numerous federal subsidy programs convinced the U.S. Solicitor General to not intervene for the defendants in the case of Cuno v. DaimlerChrysler that the U.S. Supreme Court considered in 2005-2006.
The existence of these federal anti-piracy rules (like state and local clawback laws) are the bitter residue of numerous plant closings blowing up in the faces of public officials over the decades, revealing the abuse of taxpayer dollars. Determined to go down swinging, workers like those at Briggs & Stratton in Milwaukee (who won anti-piracy rules for HUD Community Development Block Grants by protesting runaway shops in 1994-1995) have won rules that protect us all today.
I hope that the EDA’s nonrelocation policy does indeed apply to this Visalia case and that VWR International will stay in Brisbane, where it has operated profitably for so many decades with its highly skilled workforce.
And if you suspect federal monies are subsidizing job flight, call Good Jobs First.