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Connecticut keeps 40-person manufacturing company from moving

March 5, 2015
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Mark Chapman
Gov. Dannel P. Malloy gets of tour of Leipold from its general manager Michael Kraemer. (Christine Stuart photo)
Gov. Dannel P. Malloy gets of tour of Leipold from its general manager Michael Kraemer. (Christine Stuart photo)

HARTFORD, Conn. – A visit to its German headquarters by a state official and a $3 million low-interest loan helped convince a manufacturing company that employs 40 people to stay and expand in Windsor.

“The Department of Economic and Community Development has gone above and beyond expectations,” Michael Kraemer, the general manager of Leipold, a precision manufacturer, said Wednesday.

Kraemer said the company was approached by the “Carolinas about a year ago” but a visit to its headquarters in Germany by DECD Deputy Commissioner Ronald Angelo Jr. and a $3 million loan, which will be partially forgiven if the company creates 10, 20, 30 or 40 jobs, convinced company officials to stay.

See the complete story at CT News Junkie.

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7 responses to “Connecticut keeps 40-person manufacturing company from moving”

  1. John Hamlin

    Maybe if taxes and business regulation were reasonable in CT, and if CT were a right to work state, we wouldn’t have to choose winners and bribe businesses to stay here. Maybe the answer is to make the state attractive for private economic activity and business friendly.

  2. Oldtimer

    “right to work state” ? Can’t help wondering how many really understand what that means. Generally, it means the State pretty much lets employers write labor laws and labor is significantly lower paid, with little or no benefits. Sounds like a good deal for employers, but an awful lot of people end up on welfare when they can’t work any longer. Is that such a good thing ?

  3. Bill Dunne

    Keep in mind that when politicians bribe companies to stay, they do it with other people’s money. (Yours.) Those are tax dollars, by the way, that could be used for better purposes but aren’t. Or they are dollars that could have been left in the hands of the taxpayer.

  4. Bill Dunne

    For state employee Ron Angelo, life is good. He got a free trip to Germany, plus who knows what pleasant side excursions. (Free to him, that is.)

  5. Ken Werner

    Bill,

    You assume, as many people do, that those tax dollars “could be used for better purposes but aren’t.” But do the numbers really support that assumption? The $3 million is not a gift, it’s a loan, which will be partly forgiven if (as I read the story), 10 or more new jobs are created on top of the 40 jobs that the loan keeps in Connecticut.

    So what are 50 jobs worth to Connecticut? Leipold a precision manufacturer so let’s assume that the average salary is $60 thousand. That’s an annual payroll of $3 million on which taxes are paid. Some of the people who would have lost those jobs would have required public assistance, which the tax payers would pay for. And that $3 million circulates, creating more taxable revenue from the local businesses at which it is spent. And that doesn’t count the money that Leipold spends on business goods and services, which also has a multiplier effect.

    That $3 million loan is beginning to look like a very good use of money. In this instance, at least, The Department of Economic and Community Development is should: investing our tax dollars to further economic development in the state, benefitting all of us.

  6. John Hamlin

    Right to work means no one can be forced to join a union or to pay dues to a union — unions use their dues to support their leaders and to make political contributions to Democrats, who then support unions, which then contribute to the politicians who vote to force employees to pay dues – a corrupt bargain. If unions are so great, why is it that they are dying a fat death in the U.S. And that the state’s with the most robust economic growth are right to work states? There’s no trickle over impact of union wages to other workers.

  7. Bill Dunne

    Ken,

    Thank you for your thoughtful comment, but I think you are overlooking a few things. You ask, What are 50 jobs worth to Connecticut? A better question would be, What are 50 thousand jobs worth to Connecticut? Fifty thousand jobs are worth more than 50, wouldn’t you say? But that, more or less, is the kind of magnitude difference in job creation between a high-tax state like Connecticut and a low-tax state like either of the Carolinas.

    The problem with your argument, as I see it, is that it takes an extremely narrow focus. It focuses on a miniscule number of existing jobs out of the total Connecticut labor force. It ignores the much greater number of jobs that don’t exist because of the oppressive climate of taxes, over-regulation, and political favoritism that deters businesses and entrepreneurs from coming here.

    It focuses also on a mere handful of individuals (i.e., the governor and small number of his subordinates) who seem to think the way to bolster private-sector employment levels in Connecticut is by hand-picking a few companies upon which to shower other people’s money. True, in this particular case it is a “loan,” but it is structured in such a way that it will never be fully repaid. You call that “investment” but that’s a misnomer. It is behind-the-scenes deal making.

    Which brings us to a simple matter of equity. Why should a couple dozen companies be favored with special (sweetheart?) loans and tax favors and not the tens of thousands of other businesses trying to thrive in Connecticut? Dozens of other states have consistently shown that the way to stimulate strong job growth is a business-friendly climate that favors all employers, not a chosen few.

    And don’t forget the sleaze factor. These decisions to bestow taxpayer money on a very few are being made, as I say, by a tiny group of politicians and their appointees. The possibilities inherent in any system like that should be troubling.

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