Moving the Jobs, Juking the Stats
In December 2011, a VWR facility in Erie County announced 41 layoffs and the closure of their warehouse after their tax breaks, dating back to 1971, expired. From 2007-2011 alone, the corporation realized $110,000 in tax breaks. The final tax break deal began in 1994 when VWR promised to create dozens of new jobs—instead, they ended the deal with 104 fewer jobs and a shuttered warehouse.
Another VWR facility in Monroe County had also taken advantage of Industrial Development Agency tax breaks in 2001 and most recently through a Jobs Plus subsidy awarded in 2008. As the company added part-time jobs in the more newly-subsidized facility, they laid off their full-time warehouse workers in the facility where the tax breaks expired, effectively eroding job quality and consolidating and pirating jobs, instead of creating new jobs in the state.
VWR has collected $360,000 in tax breaks since 2007 from the County of Monroe Industrial Development Agency (COMIDA). In its 2008 application, the corporation agreed to expand its facility and add 24 full-time jobs. But after the public hearing and before inking the deal, the company revised its job creation numbers to 7, claiming the subsidy would only cover the warehouse portion of its facility. In its annual reports, VWR downsizes its goal even more, claiming it needs to create only 4 jobs to keep the subsidy.
COMIDA has not been too concerned about the job loss in Erie County, or about VWR juking the stats to meet its job creation goals in Monroe County. In fact, the Authorities Budget Office (ABO) has cited COMIDA for lax monitoring and reporting in this case, including significantly underreporting VWR’s tax exemptions in 2010 and 2011. And even though job piracy is prohibited in the law governing IDA subsidies, giant loopholes make the rule almost meaningless. VWR has certainly used this to its advantage, engaging in publicly-subsidized job piracy across the country. In California, the corporation has been using subsidies to shift jobs from its union warehouse to a non-union warehouse. In Pennsylvania, VWR is using subsidies to buy furniture and fixtures for a new headquarters location within the state, all while downsizing the workforce. Like Bain Capital and other private equity firms that specialize in job shifting, job cutting, and disregard for workers’ rights, VWR strikes out when it comes to doing what’s right for our communities.
VWR International is an international distributor of scientific and laboratory supplies and chemicals, with headquarters in Radnor, Pennsylvania and 13 distribution centers in the US. Its two divisions, Ward’s Natural Science Establishment and Science Kit, LLC, have been in New York State since 1862 and 1957 respectively. VWR was purchased in 2007 by the private equity firm, Madison Dearborn Partners, and has since engaged in a pattern of taxpayer-subsidized job piracy across the country. VWR had $3.6 billion in sales in 2010. The corporation recently announced that John Ballbach, Chairman, President, and CEO, stepped down, and Madison Dearborn Executive Partner Harry J. Kraemer will step in as Chairman. Rumor has it that Ballbach received a $5 million golden parachute for his time at VWR.
Industrial Development Agencies: Summary of Data, Office of the New York State Comptroller, at http://www.osc.state.ny.us/localgov/datanstat/findata/index_choice.htm
Comida Assisted Projects: Ranked by amount of COMIDA assistance for projects approved during 2008, Rochester Business Journal, March 27, 2009, at http://www.rbj.net/article.asp?aID=179270
COMIDA Investigation of Complaint, Final Report, New York State Authorities Budget Office, April 2012, at http://www.abo.ny.gov/reports/compliancereviews/COMIDAInvestigationOfComplaintFinalReport.pdf
VWR International LLC : VWR Announces Leadership Changes, As CEO John Ballbach Departs, 4-Traders, July 26, 2012, at http://www.4-traders.com/news/VWR-International-LLC-VWR-Announces-Leadership-Changes-As-CEO-John-Ballbach-Departs--14433996/
Cities Poaching Jobs from Each Other with Taxpayer Subsidy, by David Louie, ABC Channel 7, May 9, 2011, at http://abclocal.go.com/kgo/story?section=news/business&id=8121437
City Newspaper: Ward’s gets dubious honor
August 22, 2012. Ward’s Natural Science has earned a dubious distinction: it’s one of the inaugural inductees into the Corporate Tax Dodgers Hall of Shame. The Hall of Shame, which is a satirical website, was created by the Getting Our Money’s Worth Coalition, which is made up of labor and progressive activist groups from across the state. The website is meant to draw attention to companies that receive tax breaks but either fail to create jobs or create low-paying jobs, says a coalition press release.
PRESS RELEASE: VWR INTERNATIONAL GAINS STATEWIDE ATTENTION FOR JUKING THE STATS ON JOB CREATION
Rochester, NY—Dozens of workers, community members, faith leaders, labor leaders, and activists will host a special event in Rochester on Tuesday, when they induct VWR International into the statewide Corporate Tax Dodgers Hall of Shame. Advocates are launching a new Hall of Shame award and website next week to draw attention to the corporations throughout Monroe County and New York State that receive tax breaks but fail to create jobs, or create only poverty-wage jobs in return. Continue reading