Hoffa Calls on U.S. Dept. of Commerce to Rescind Job-Killing Grant

Sep 12, 2011, 17:14 ET from International Brotherhood of Teamsters

WASHINGTON, Sept. 12, 2011 /PRNewswire-USNewswire/ -- Teamsters General President Jim Hoffa called on Dr. Rebecca Blank, Acting Secretary of the U.S. Department of Commerce to rescind a $2 million grant to Visalia, Calif., that is being used to destroy good jobs in the State of California rather than create them, in a letter last week.

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"American taxpayers should not foot the bill for rich private equity firms like Chicago-based Madison Dearborn Partners to move jobs from one California labor market to another, devastating the families of longtime workers and decimating the local community that has supported the business for more than 50 years," said Hoffa.

VWR International, a global laboratory supply company, plans to close its Brisbane, Calif., Regional Distribution Center in 2012 and relocate the work over 200 miles away to Visalia, Calif. VWR has even gone so far as to deny its long-time Brisbane employees the right to follow their jobs.

The Department of Commerce Economic Development Administration (EDA) made a $2 million grant to Visalia in April 2011. The grant includes a promise of creating 237 jobs.

Though the City of Visalia's internal documents and statements to the media include VWR as a beneficiary of the grant, the application to the U.S. Department of Commerce does not. 

By conspicuously failing to include the controversial VWR project as a beneficiary of the grant, the city has deceived American taxpayers and may be failing to obtain assurances of compliance with civil rights and other legal requirements obtained from the other listed beneficiaries, Hoffa's letter noted.

U.S. Congresswoman Jackie Speier and California State Treasurer Bill Lockyer co-chaired the "Federal-State Inquiry into Job Losses and Misdirected Tax Policy" on May 9, 2011, and heard testimony from labor market experts and Brisbane officials (Report: Highway Robbery—The road from Brisbane to Visalia: How VWR International is using taxpayer funds to destroy jobs, the environment, and communities, is available). The University of California Berkeley Center for Labor Research and Education concluded that the closing will result in the loss of 331 jobs, including 183 direct jobs, 42 indirect jobs, 41 induced jobs and 65 jobs in the adjoining county.

According to the Brisbane City Manager, the closure will devastate the local economy as the company accounts for 18.5 percent of the city's general fund and 50 percent of the city's sales tax revenue. VWR's tax revenue alone is equivalent to 67 percent of Brisbane's annual police budget or 88 percent of its fire department budget, according to the city manager.

"VWR and its private equity owners refuse to meet with city officials or the union to discuss viable alternatives that will keep operations local. The company won't even allow current employees to follow their work," said Rome Aloise, President of Teamsters Joint Council 7 and Principal Officer of Secretary-Treasurer of Teamsters Local 853. Local 853 has represented VWR workers for more than 50 years.

"Madison Dearborn's decision to walk out on Brisbane and the long-term workers who built this company is a slap in the face," Aloise said. "But to know that taxpayer money is being used to help the company do it is unforgivable."

"We do not believe that Congress intended for EDA funds to be used in this manner," Hoffa said. "If we are serious about creating jobs in this country, we need to stop financing job piracy and hold employers accountable."

The letter and research report are available upon request.

Founded in 1903, the Teamsters Union represents more than 1.4 million hardworking men and women in the United States, Canada and Puerto Rico. Visit www.teamster.org for more information.

SOURCE International Brotherhood of Teamsters