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Wednesday, Aug. 14, 2013

Issue of the Week: The Path Walker Did Not Take

Talgo
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“I don’t think we would pursue any manufacturing in Milwaukee anymore after the way Wisconsin treated us.”

So said Nora Friend of Talgo Inc. in a recent interview with the Business Journal.

Talgo, you’ll remember, is the Spanish manufacturer of train cars that would have been used in the high-speed rail line that’s going to cut across the Midwest, but unfortunately outside of Wisconsin’s borders because Gov. Scott Walker choose to reject the $810 million grant from the federal government to build the high-speed rail system.

There were many benefits to pursuing the high-speed rail project and of doing business with Talgo, a major European manufacturer. The company was set to provide at least 125 well-paid manufacturing jobs at its plant in the former Tower Automotive site in the hard-hit 30th Street corridor. And the $810 million rail line would have been a significant stimulus to the state’s economy as it struggled to rebound from the Great Recession. The project would have created almost 5,000 construction jobs and more than 9,000 permanent jobs and put money in the pockets of struggling Wisconsinites.

But we all know that it was not to be. Even before taking office as governor, Scott Walker rejected the federal funds and likely breached the state’s contract with Talgo. According to the Business Journal’s report, the company now employs a mere five people, has two “mothballed” trains on its hands, will likely leave the city when its lease ends, is owed $10 million from the state under its original contract and is suing the state over that contract.

Talk about a missed opportunity.

The Talgo affair totally contradicts Walker’s “open for business” boast and exposes his fraudulent image as a job creator. Walker is using a classic strategy for a low-wage economy similar to what we have seen in the South and also in developing countries. Rather than stress education and high-skill training to build a highly sophisticated workforce that will create or attract the technologically advanced businesses that pay high wages, Walker took the low road—the road to lower wages and less public investment in infrastructure and fewer amenities that have always made Wisconsin and Milwaukee a great place to live. He cut back on education, cut taxes for the wealthy, weakened health and safety regulations, gutted environmental protections and attacked unions. This opened the “Wisconsin for business” door to the bottom-feeder businesses that exploit labor, provide low wages with few, if any, benefits, despoil the environment and then pack up and leave as soon as they find another “sucker” state that will give them “incentives” to provide their low-wage, often-dangerous jobs.

All one needs to do is to examine the list of Walker’s campaign donors to see the direction he is taking Wisconsin. His job-creation record is not only one of the worst among our neighboring Great Lakes states, but it is one of the worst in the entire country. His dismantling of the Department of Commerce and creation of the Wisconsin Economic Development Corp. (WEDC) has failed at every turn, including breaking laws and disregarding best management practices. Walker pays lip service to strengthening the state’s manufacturing sector, but even before he took office, he rejected Talgo, a major manufacturer willing to commit to Milwaukee and show the rest of Europe that Wisconsin is a great place to do business. Instead Walker’s actions are having a chilling effect on any sophisticated company either here or abroad considering setting up shop in what had been a great state in which to live and do business.

The path Walker has put Wisconsin on is a path to creating a “Mississippi of the North.” This is not the Wisconsin we grew up in, but it will bolster Walker’s presidential ambitions by ingratiating him with the tea party crowd and the right-wing billionaires who will play a major role in the Republican presidential primaries in 2016.