Rexnord workers caught in Trump vs. union war of words

In John Feltner’s opinion, maybe it’s not the best idea for a union to get caught up in a nasty war of words with the next president of the United States.

Feltner, a machinist at a Rexnord Corp. factory in Indianapolis, is also a vice president with Steelworkers Local 1999, which represents workers at Rexnord as well as at a nearby Carrier Corp. plant. Both plants have announced plans to move jobs from Indianapolis to Mexico.

On Wednesday, Local 1999 President Chuck Jones criticized president-elect Donald Trump for taking credit for preventing about 1,350 jobs at the Carrier facility from leaving; the number of jobs retained actually was closer to 750.

“He got up there and lied his a-- off,” Jones told the Washington Post.

Trump fired back on Twitter, saying that Jones had done a “terrible job” representing workers and that the union should “spend more time working.” Earlier, Trump had criticized Rexnord for its plan, saying the company was “rather viciously firing all of its 300 workers.”

The harsh exchanges probably did little good for the workers at Rexnord — a Milwaukee-based company that makes industrial bearings, gears and other products — who still held out hope that Trump could help persuade it to keep its Indy plant open, Feltner said.

"People were asking, ‘What the hell is Jones doing?’ It stirred up a lot of emotion in the plant,” Feltner said.

“This is my opinion on it, and my opinion only,” he said. “But these are our jobs, and when you have local (union) leadership and the president-elect playing politics, who is going to lose? We are. We need to step away from politics and focus on the task at hand, which is keeping the spotlight on Carrier and Rexnord jobs and every American job. That’s our concern.”

Rexnord declined to comment. Feltner said supervisors from the company’s Mexico plant have been touring the Indianapolis plant, and the company wants its workers to train their replacements in return for severance packages.

“If that’s not a slap in the face, I don’t know what is,” Feltner said, adding that the plant is expected to close in 2017.

“Right now, the jobs are slated to move to Mexico. What we are in negotiations for is to try and finalize severance packages. Those talks are going very slow,” he said.

Feltner said he was told the move to Mexico would save Rexnord $15 million a year.

The company, which has about 7,700 employees, had $67.5 million in profit on $1.9 billion in sales in fiscal 2016. The average wage at the Indianapolis plant is about $25 per hour.

Now, the spat between Trump and Jones has left Local 1999 members, many of them Trump supporters, in an awkward place.

“Do we have mixed feelings? Yeah, we are ecstatic for the people whose jobs (at Carrier) are being saved, but we are angry about the jobs that are leaving. Those are people we represent, too," Feltner said.

In the deal that Trump and Indiana Gov. Mike Pence helped negotiate with Carrier, the Indiana Economic Development Corp. offered the company up to $5 million in conditional tax credits, $1 million in training grants and $1 million in tax credits for continued investments in the Indianapolis plant.

A 'zero sum' game

The practice of offering tax credits and other perks as incentives for companies to add or retain jobs in a state is widespread, including in Wisconsin.

Critics, though, say it puts government in the position of picking winners and losers in the private sector.

“Tax credits are the government putting their finger on the scale,” said Jenni Dye, research director for One Wisconsin Now, a liberal public policy group in Madison.

It’s also a “zero sum” game, according to Dye, with states and countries stealing jobs from each other in lieu of creating new jobs.

“That’s why we’ve got to have leadership on a higher level, than just state leadership, coming together. If everyone jointly decides that we are not going to play this game anymore, we will get back to a more level playing field,” Dye said.

The Wisconsin Economic Development Corp., created by Gov. Scott Walker and lawmakers in 2011 to replace the former state Department of Commerce, has had to repeatedly tighten its financial controls in response to audits and news stories detailing problems with its awards and administration.

“Tax credits don’t always result in what we want to see, which is job creation … because there are so many loopholes,” Dye said.

The agency is committed to only provide tax credits and other benefits to companies when it’s in the best interest of taxpayers, said WEDC Chief Executive Officer Mark Hogan.

Companies have to relinquish the credits, and pay the state back, if they don’t live up to their obligations, according to Hogan.

“That’s an important role we play when it comes to the return on the investment for the taxpayers,” he said.

'A soldier's duty'

Indiana's deal with Carrier brought back memories for Fond du Lac County Executive Allen Buechel, who in 2009 helped broker a much larger financial assistance package for Mercury Marine Inc.

At the time, Wisconsin and Oklahoma were engaged in a bidding war for the outboard engine-maker’s factories and more than 1,500 jobs.

Then-Gov. Jim Doyle’s administration offered Mercury $70 million in tax credits, and Fond du Lac County offered a $50 million loan funded by a 0.5% sales tax that expires at the end of 2021.

Mercury has since nearly doubled its employment in Fond du Lac to about 3,000 people, according to Buechel. The company is completing its sixth expansion and has spent $730 million on the factory and other facilities.

“I hate to use the word ‘phenomenal,’ but that’s what I am going to use,” Buechel said.

The deal was hurtful for some, though. Mercury closed its plant in Stillwater, Okla., eliminating several hundred jobs. Also, the union workforce at the Fond du Lac plant had to make tough concessions to save their jobs, including a wage freeze and a 30% pay cut for workers called back from layoffs.

“All of that was pretty traumatic and caused a lot of hard feelings," Buechel said. "To this day, there are still some people who are in 100% opposition to what we did … but I looked at it as a soldier’s duty, and sometimes a soldier’s duty is dirty work.”