A Local Flavor of Crony Capitalism

Multi-city Generac, a large industrial concern, wants government money — federal, state, local — for a bus line to bring workers from the Janesville-Beloit area to its plant in Whitewater. The bus line’s really good for no one but Generac’s employees. The times for the proposed line are tailored not to community needs, but to Generac‘s shift-schedule.

It’s just crony capitalism, where the big get bigger at public expense.

Only a few months ago, in a grand announcement that Gov. Walker and Assembly Rep. Evan Wynn attended, Generac declared that it was hiring hundreds of new workers for its Whitewater plant. This was touted as the private initiative of a thriving manufacturer.

Now, one learns that it’s not really a private initiative: Generac’s grabbing $83,005 in public money to bus workers from other cities to its plant in Whitewater.

What’s Generac?

It’s a multi-billion-dollar company with factories in multiple locations. That’s literally true, as publicly-available data from the Wall Street Journal’s MarketWatch reveal:

Market capitalization: $1,600,000,000 (1.6 billion)
Average shares traded on the NYSE: 266,00 daily
Sales revenue 2011: $791,000,000
Revenue per employee: $356,264

Within the last three months, MarketWatch lists 17 insider (executive) stock purchases at Generac, totaling 134,697 shares, and in the last six months two sales totaling 19,591 shares.

Despite these vast sums, Generac wants public money from the City of Whitewater, UW-Whitewater, the State of Wisconsin, and the United States of America.

That’s what passes for initiative: They’ve hit up all the usual public entities they could find.

If Generac can’t pay its full weight — despite a record of huge private growth — who can?

No one.

One newspaper’s account of the ten-month cost of this service is false and misleading.

The total cost is $128,310. The actual public cost to support Generac is $68,005 in state and federal money, and $15,000 in funding from the City of Whitewater and UW-Whitewater. That’s a total of $83,005.

It’s simply not true that Generac’s portion of $26,058 is a majority of the cost — it’s not even a match for the public portion of the cost. Reporting the ‘local sponsorship cost’ (Generac, Whitewater, UW-Whitewater) conceals the true burden on taxpayers to support Generac.

Publishing big companies’ and local officials’ talking points isn’t reporting — it’s stenography.

Why can’t Generac pay even $7,500 more – the City of Whitewater’s share — for its own needs?

It can, but why should a business pay when it can take from others?

When Generac, Gov. Walker, and Rep. Wynn announced this deal, why didn’t they say they’d need public funds to make it work?

I’ve read announcement after announcenmet of this project, including the press release from Gov. Walker’s spokeman Cullen Werwie, and they never mention that only months after this supposedly private accomplishment, someone would hit up every part of the government one could to subsidize Generac.

What makes Generac’s needs more important than those of other businesses?

They’re not more imporant, but Generac’s more influential. It could easily pay Whitewater’s portion, but by committing Whitewater now, they’ll have a thin-entering wedge to get more from the city later.

What happens next year?

Let’s assume these workers are still working at the Whitewater Generac plant next year. If Generac can’t get money from the state and federal governments, it’ll be sure to ask for more from Whitewater.

If it does, it’ll have incredible leverage. What will Common Council say to this business then? They’ll have nothing to say, because if they object to Generac’s demands, Generac will say that Council’s putting jobs at risk.

(That’s not true — it’s Generac that’s putting jobs at risk by not providing for its workers or not hiring locally. Still, it’s what Generac will say, and it will work.)

In response to a claim like this, Council will be forced to cave, and give a thriving buisness whatever it asks, despite that business’s ability to pay its own way.

If you had $7,500 to give for a Whitewater need, would you put Generac at the top of your list?

The question’s rhetorical. No one (possibly excepting an executive at Generac) would put this at the top of his or her list.

What does it say about the actual state of Whitewater’s economy that Generac can’t find workers here?

It’s certainly not because we don’t have prospective employees here. We do — we’re not (as a sharp reader recently reminded me) anywhere close to full employment.

I don’t believe Generac deserves a penny of Whitewater’s public money, and I’m skeptical of their claims, generally. But if Generac should be right, and there aren’t enough people here worth hiring, it’s a big problem for the city.

Giving wealthy Generac money isn’t a garden-variety mistake — it’s a gross embarrassment to every official who supported this idea.