- Associated Press - Thursday, November 5, 2015

MADISON, Wis. (AP) - The decision to close Oscar Mayer’s 100-year-old plant in Madison and relocate its corporate headquarters to Chicago was made at the corporate level and “has nothing to do with Wisconsin,” Gov. Scott Walker said Thursday.

The Wisconsin Economic Development Corporation, the state’s job creation agency that Walker created, offered Kraft Heinz “assistance” but the company declined to take it, the governor said. Walker said he has also reached out to the company since the closure announcement to see if the state can do anything now. Walker made his remarks to reporters during an impromptu question-and-answer session on his way into a business growth conference at a Madison convention center.

Walker’s spokeswoman, Laurel Patrick, said the governor was referring to a $194,800 in annual tax credits that the WEDC offered Kraft Foods, which controlled Oscar Mayer, in 2013 as part of an investment in the Madison offices. Kraft refused the credits in 2014, more than a year before the company merged with Heinz this July.

The new company, Kraft Heinz, announced Wednesday that it would shutter the 96-year-old Madison facility within two years. Three-hundred corporate employees will be offered spots at the company’s Chicago headquarters; the remaining 700 or so production workers will lose their jobs.

The move is part of a national downsizing that calls for closing six other plants in the U.S. and Canada.

“In this case, when you look at seven announcements across the country, it has nothing to do with Wisconsin,” Walker said. “It has everything to do with a corporate decision that was made by the merger of those two companies.”

Signs that the Madison plant was in trouble began surfacing shortly after the merger when the new company announced in August it would eliminate 165 jobs. But it’s still unclear whether Wisconsin officials anticipated the closure and what incentives, if any, they offered the company to stay.

Patrick said the governor’s office didn’t learn of the closure until Wednesday. WEDC spokesman Steven Michels said the agency didn’t learn of the closure until Wednesday as well. He insisted the agency didn’t suspect the closure was coming. In an email to The Associated Press before the governor spoke, he said no one ever asked the agency to prepare incentives for the plant. He didn’t respond when asked whether the company ever offered any benefits.

Mayor Paul Soglin, meanwhile, said city officials met with company representatives shortly after the merger and told them they were concerned about the future and would be available to talk about any issues. Soglin said the company never contacted the city. Pressed about whether the city ever reached out to the company after the initial meeting, Soglin would say only that the company never contacted the city and he had no idea that the closure was coming.

That contrasts with the story in Iowa, where Kraft Heinz plans to shift meat production from its Oscar Mayer plant in Davenport to a new facility a few miles away.

Economic development officials in that state said in a news release that they’ve been talking with Kraft Heinz for several months about the change under non-disclosure agreements. They’ve offered the company $1.75 million in tax benefits and a $3 million forgivable loan to demolish the old plant. About 475 of that plant’s 1,200 jobs will be saved, city and state officials say.

It’s unclear whether incentives would have made any difference in Madison.

“Not sure the state could do much of anything to convince Kraft Heinz to change their minds,” said Steven Deller, a University of Wisconsin-Madison professor who specializes in community development. “From a purely corporate perspective I can understand K-H wanting the top administrative offices … located at the K-H Chicago headquarters.”

A Kraft Heinz spokesman didn’t return a message.

State Rep. Chris Taylor, a Madison Democrat, challenged Walker to do something to save the plant, calling the closure “absolutely an abomination.”

Walker told reporters his administration has “requested at least a call to them to see if we can provide some assistance.”

According to the Department of Workforce Development, 9,341 plant workers across the state have lost their jobs this year in mass layoffs between the beginning of the year and mid-October. That compares with 6,186 layoffs all of last year.


Associated Press writer Scott Bauer contributed to this report.


Follow Todd Richmond on Twitter at https://twitter.com/trichmond1

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