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Management Side
Union approves new agreement; Kimberly-Clark signals it's ready to talk to state of Wisconsin

FOX CROSSING, Wisconsin (From news reports) - Kimberly-Clark Corp.'s Cold Spring facility could be saved from closing if a new United Steelworkers agreement ratified by union members Monday night sways the company and is paired with state tax incentives.

"It's a new collective bargaining agreement that would provide Kimberly-Clark with concessions that would allow the facility to remain open," said Dave Breckheimer, president of USW local 2-482.

"But nothing happens unless the state comes through with the incentive package," Breckheimer said. "That's the next step towards this becoming a reality. Those tax incentives have to be available."

K-C's Cold Spring and Neenah Nonwovens facilities are both currently slated for closure, eliminating about 610 jobs, under the company's global restructuring program announced in January.

Kimberly-Clark said in an email Tuesday morning that it was now open to negotiations on state incentives with the Wisconsin Economic Development Corp.

"With the ratified agreement, the company will advise the State of Wisconsin that it is now in a position to commit to using the incentives if the proposed legislation is passed and an agreement with WEDC is reached," said K-C spokeswoman Brook Smith.

"These incentives, together with the new agreement, allow the company to better meet some of the challenging objectives of our global restructuring program. We will not comment further on the bargain, tentative agreement or a final decision regarding the Neenah Cold Spring facility until it is appropriate to do so."

That means the ball is now in the state's court.

In February, the Assembly passed a subsidy package, Bill 963, modeled after the deal Foxconn received in Racine County -- if K-C would keep the two Fox Cities plants open.

But the bill stalled in the Senate in March because legislators said at the time they didn't know if K-C would even take the deal.

The proposed legislation would include refundable tax credits of 17 percent on eligible wages for 15 years, a bump up from current statutes that include 7 percent and 12 years, respectively. It also gives refundable tax credits of 15 percent (up from 10 percent currently) on capital expenditures incurred over a five-year period. It gives a five-year sales tax exemption on those same capital expenditures.

The package would give K-C tax credits of between $100 million and $115 million over a 15-year period, according to WEDC.

In April, State Sen. Roger Roth (R-Appleton), a co-author of the bill, said he would push legislators to come back for an "extraordinary session" to vote on the incentive package if K-C signaled that it was interested.

In a statement Tuesday, Roth said, "I will be working with Majority Leader Fitzgerald and members to help get the Senate in a position to come back in and pass this important legislation."

Roth said that he doesn't know when that will happen.

"If it were up to me, I'd bring this up as soon as possible. I have no idea what members' schedules are like. The majority leader is going to have to talk to individual members and find out what the timeframe will be," he said.

"The important first step was the union and the company making an agreement. We're the next logical piece in the puzzle to make this a reality," Roth said.

If the senate passes the bill, it goes to Gov. Scott Walker for approval.

Walker and WEDC issued statements Tuesday morning praising the agreement.

"The agreement reached between Kimberly-Clark and the United Steelworkers is outstanding news, and we look forward to working with Senate leaders and the company to keep hundreds of good-paying, family-supporting jobs in the Fox Valley," Walker said in a release.

WEDC secretary and CEO Mark R. Hogan wrote, "WEDC is pleased Kimberly-Clark has reached an agreement with the United Steelworkers that would ensure the company's Cold Spring facility remains in operation. WEDC has had productive conversations with the company since February regarding how the legislation to provide Kimberly-Clark with state incentives would work with WEDC's programs. We look forward to working with the company, Gov. Walker and state legislators to find a path forward to secure Kimberly-Clark's presence in Wisconsin for decades to come."

USW president Breckheimer wouldn't say which concessions employees made in the new Cold Spring collective bargaining agreement negotiated over months with the company and approved Monday night.

But he did confirm that concessions were not as severe as previously stated.

In a prior story, Cold Spring employee Karmen Jones said K-C "was asking workers to make concessions that would cut their average labor costs by more than $20,000 per person."

Breckheimer said he was hopeful that the new agreement will encourage the company to keep the plant, which makes Depend and other hygiene products.

"I'm optimistic that it will," he said. "My hesitation is on how long it will stay open. Cold Spring celebrated its 25th anniversary in September. It would be nice to see them celebrate another 25 years."

K-C is the Fox Cities' third-largest employer, with about 3,200 workers in the region.

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