MADISON—Governor Scott Walker today announced that Shopko will commence a corporate expansion project with assistance from the Wisconsin Economic Development Corporation (WEDC) that will result in the creation of more than 120 new positions at its corporate headquarters in Green Bay.That's lovely. $2 million can pay salary and benefits to between 15-20 low to mid-level executives for about a year. But, really, how did those jobs end up here? Here's a more plausible explanation:
"My number one priority is helping Wisconsin businesses create jobs," Governor Walker said. "I am pleased we were able to work with Shopko to support their expansion and ensure it will take place in Wisconsin."
“We appreciate the WEDC working with us to support our growth and bring new, good paying jobs to Wisconsin,” commented Paul Jones, President and CEO of Shopko.
Founded in 1963 and headquartered in Green Bay, Wisconsin, Shopko is a $2 billion retailer that operates 149 stores in 13 states throughout the Midwest, Mountain and Pacific Northwest regions. The company announced today a merger that will result in a significant investment in Wisconsin and creation of new positions at its corporate headquarters in Green Bay. The creation of more than 120 new jobs will be assisted with an award of up to $2 million in Economic Development Tax Credits administered by the WEDC.
Over the past two years, Shopko has purchased seven stores from Pamida and successfully transitioned them to the Shopko Hometown format. These locations have delivered an improved customer experience and have seen a significant increase in store traffic, sales and profitability, the release stated.Pamida has been owned by Shopko since 1999, and for the last six years they have both been owned by the same private equity firm who finally decided to reduce redundancies, increase shareholder value and all that jazz. Actually, Sun Cap looks like they started the merger process, or at least investigating the viability of a merger, two years ago, before Walker was in office or WEDC even existed.
Once Pamida’s chain-wide conversions are complete, the company plans to accelerate the addition of new Shopko Hometown stores in the second half of 2012 and into 2013, Burns said.
Both companies are owned by affiliates of Sun Capital Partners, Inc. a private investment firm focused on leverage buyouts, equity, debt, and other investments in market-leading companies.
Why this merger is getting tax credits might be an interesting issue to discuss. Shopko has twice the revenues of Pamida and it's almost always the case that the smaller guy has to pack his bags and move to the bigger kid's backyard during a merger. I'm not sure how floating $2 million Shopko's way does anything to create jobs that weren't already coming here. $2 million is 0.1% of Shopko's annual revenue, so it's really nothing to them; in fact, it's such a negligible pittance that Shopko didn't even mention WEDC's involvement in their press release on the merger. The $2 million Walker gave Shopko is little more than a gift basket from the neighborhood association's welcome wagon.
Without knowing much more about the deal itself or WEDC's involvement, I can only comment on what it looks like from the outside and, frankly, it looks pretty weak. The tax credits appear to be something WEDC floated Shopko's way solely for the sake of being able to claim that they are involved in job growth here in Wisconsin even though the state probably did absolutely nothing to bring those jobs here. That's one expensive press release.
If that's the case, then Walker et al. are incompetent at either 1.) messaging that they missed a golden opportunity to tell everyone that the economy is looking up and that jobs are coming back to Wisconsin without state government involvement (something I'm routinely told conservatives are quite fond of); or 2.) job creation that they can't count on private businesses to extol the Administration's leadership and/or policies without having to pay them.
Taking credit for something he had nothing to do with is quickly becoming a Scott Walker calling card. Lately we've had his heroic "expansion" of Family Care and now his fiat creation of jobs in Green Bay -- Walker truly seems adept at nothing than his own self-promotion.
It's a good thing that good jobs are coming to Green Bay and, yes, those jobs should be counted toward Walker's promise of 250,000 new jobs in the state by the end of his term; but Walker shouldn't pound his chest too much because he likely didn't do much -- if anything -- to bring them here.
MORE: Jake reminds us all of the eerily similar Spectrum Brands incident from not too long ago.