UPDATE: WEDC revokes tax credits for company that outsourced job - WKOW 27: Madison, WI Breaking News, Weather and Sports

UPDATE: WEDC revokes tax credits for company that outsourced jobs

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MADISON (WKOW) -- A Waukesha company with ties to Gov. Scott Walker (R-Wisconsin) had its tax credits revoked by the Wisconsin Economic Development Corporation (WEDC), after laying off 97 employees and outsourcing their work to foreign countries.

WEDC staff submitted its first-ever "Tax Credit Revocation Report" at the agency's Board of Directors meeting on Tuesday, listing HUSCO International and four other companies that are losing some or all of the tax credits previously earned for creating and retaining jobs or making new investments in their businesses.

Along with HUSCO, the other four companies listed on the report are: Teel Plastics, Renewegy-7 Investors, EMTEQ, and Novation Companies.

WEDC's decision to revoke the tax credits for HUSCO International is of particular significance due to Gov. Walker's close ties to the company.

Michael Grebe - who was appointed to the UW Board of Regents by Gov. Walker in 2015 and whose father of the same name served as the chair for Walker's presidential campaign and all three of his gubernatorial runs - is the executive vice-president and general counsel for HUSCO.

The company has also hosted events with Gov. Walker during his time in office, including a campaign stop just days before the 2012 recall election.

In June, the company announced it was laying off nearly 100 workers from its Waukesha facility. 27 News learned recently the work was outsourced to a foreign country, according to U.S. Department of Labor records. Trade Adjustment Assistance benefits were awarded to those employees on November 4th.

In its ruling to award those benefits, the Department of Labor stated those jobs were lost in part "because the workers' firm has shifted to a foreign country a portion of the production of articles like or directly competitive with the articles produced by the subject workers which contributed importantly to worker group separations at HUSCO/Off-Highway."

Grebe told 27 News Thursday evening some of the jobs eliminated at the Waukesha plant were sent to the company's facility in the UK, with the rest going to India.

But WEDC had already revoked the job creation and retention tax credits for HUSCO in September, according to the revocation report submitted to the Board. It shows the company has paid back $126,185 to the agency.

"My expectation is if the state gives assistance it should be for companies who are creating or protecting jobs here in the State of Wisconsin," Gov. Walker told 27 News Thursday. "In no way should it be used to move jobs elsewhere."

But WEDC's actions mark a departure from years of inaction by the agency on the issue.

In July 2014, 27 News was the first media outlet to report on companies receiving financial awards from the agency despite outsourcing jobs - and keeping them - despite those stories and pressure from Democratic lawmakers who sit on the WEDC Board.

Senator Julie Lassa (D-Stevens Point) is happy the agency is taking the issue seriously as she prepares to step down from the Board after losing her reelection bid in November.

"Taxpayers have a right to expect that when the state is investing money into companies in order to create job creation and retention that they keep good jobs here," said Sen. Lassa.

Gov. Walker said you can expect more actions like this from WEDC in the future.

"It should never be the case where they're taking jobs from Wisconsin via assistance from the state and we would expect to be robust in going after that," said Gov. Walker.

Roughly $195,000 in tax credits have been clawed back to date by WEDC from the five companies listed on the first revocation report.

A WEDC spokesperson told 27 News revocation reports will be provided to the Board on a quarterly basis going forward.

 

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