Wednesday, January 4, 2012

Don't Buy Scott Walker's Chest-Pounding over the New Shopko Merger Jobs

There's some good news for folks in Green Bay tonight, as giant area retailer Shopko is creating about 120 new job via a merger. The news is so good that Gov. Walker's team is all over it with a press release:
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.

"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.
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:
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.

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.
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.

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.


Anonymous said...

jffre [url=]louis vuitton bags[/url] erpcsw xpjfs [url=]cheap louis vuitton[/url] dtumii gyxuk [url=]louis vuitton uk[/url] aahsvb elis [url=]louis vuitton bags[/url] fbrnct nmywq [url=]louis vuitton bags[/url] bdjcal bvsov [url=]louis vuitton sale[/url] dpkhvl rnqs

Anonymous said...

lfq [url=]Beats By Dre[/url] nwi bcn [url=]Dr Dre Beats[/url] ynq fzh [url=]Beats By Dre[/url] mrr htp [url=]Cheap Beats By Dre[/url] qww wyb [url=]Cheap Beats By Dre[/url] szo adm [url=]Celine Bag[/url] ade nhj [url=]Celine Bags[/url] stk yuy

Anonymous said...

lev [url=]Hollister Jeans[/url] ein hkl [url=]Hollister Outlet[/url] yil kvz [url=]Hollister Jeans[/url] uih bps [url=]Hollister Jeans[/url] igi uav [url=]Hollister Jeans[/url] ayw zns [url=]Celine Bags[/url] rzr wtc [url=]Celine Bags[/url] xgm tbh

Anonymous said...

nod [url=]Celine Handbags[/url] ntj hnb [url=]Celine Bags[/url] hck bzt [url=]Celine Bags[/url] syr pku [url=]Celine Handbags[/url] hgg mgy [url=]Beats By Dre[/url] gmv zsr

Anonymous said...

Marvelous, what a website it is! This website gives helpful information
to us, keep it up.

My weblog

Anonymous said...

The other day, while I was at work, my cousin stole my apple ipad and tested to see if it can survive a 25 foot drop, just so she can be a youtube sensation.
My apple ipad is now destroyed and she has 83 views.
I know this is entirely off topic but I had to share it with someone!

Have a look at my web blog; tao of badass

Anonymous said...

Hi just wanted to give you a brief heads up and let you know a few
of the images aren't loading properly. I'm not sure why but I think its a linking issue.
I've tried it in two different web browsers and both show the same outcome.

my site ... Nike Free Sko

Anonymous said...

Hi my friend! I wish to say that this article
is awesome, great written and come with approximately all important infos.
I'd like to peer extra posts like this .

Also visit my web site More Info :: ::

Anonymous said...

I enjoy what you guys tend to be up too.
Such clever work and exposure! Keep up the superb
works guys I've incorporated you guys to my own blogroll.

Here is my page: Tory Burch Shoes

Anonymous said...

Thanks for every other informative site. Where else may just I get that kind of info written in such an ideal method?
I've a project that I am just now working on, and I have been on the look out for such info.

My blog; Cheap Jerseys

Anonymous said...

Have you ever thought about creating an e-book or guest authoring on other blogs?
I have a blog based on the same ideas you discuss and would love
to have you share some stories/information. I know my readers would appreciate your work.
If you're even remotely interested, feel free to send me an email.

Also visit my web page - Soldes Air Jordan

Anonymous said...

Thankfulness to my father who informed me about this website, this weblog is truly amazing.

My webpage; Michael Kors Canada

Anonymous said...

I don't know if it's just me or if everybody else experiencing issues with your site.

It seems like some of the written text in your posts are running off the screen.

Can somebody else please provide feedback and let me know
if this is happening to them too? This might be a issue with
my web browser because I've had this happen previously. Appreciate it

Also visit my web page - Sac A Main Louis Vuitton

Anonymous said...

It's truly very complex in this active life to listen news on Television, thus I just use the web for that purpose, and get the most recent news.

Feel free to surf to my webpage ... Air Max

Anonymous said...

Your style is unique in comparison to other people I've read stuff from. Thank you for posting when you have the opportunity, Guess I'll just book mark this blog.

my page :: Michael Kors