LITTLE ROCK – The Arkansas Democrat-Gazette recently reported that LM Wind Power is laying off more than 230 workers.
In the Obama economy, this isn’t startling news. Perhaps it wouldn’t even be news, except for the fact that LM Wind Power is a pet project of the Beebe administration – and, consequently, of the taxpayers. This may explain why Gov. Mike Beebe is so passionate about defending LM Wind Power’s goodies.
In June, Beebe advocated for the renewal of federal wind power subsidies at a wind power conference in Atlanta. “Anyone standing in the way of this industry, frankly, they’re un-American,” he said.
Following the LM Wind Power announcement, perhaps it is time to reassess whether it’s possible to be patriotic even while opposing taxpayer subsidies to one of Beebe’s favored industries.
The “world’s leading supplier of rotor blades for wind turbines” opened shop in Little Rock after receiving a whole bag of goodies from the taxpayers in 2008. The Arkansas Democrat-Gazette reported:
“The company received $6.9 million from the Governor’s Quick Action Closing Fund, and $8.04 million from the Economic Infrastructure Fund, for infrastructure costs. LM (Wind Power) also received a corporate income tax exemption for 25 years, sales-tax refunds on building materials, taxable machinery and other equipment associated with the expansion project, and a 5 percent rebate on new payroll for 10 years, starting in July 2007.”
That’s $14.94 million in upfront cash – not including a smorgasbord of tax breaks, refunds and rebates. So while Democrats and liberal bloggers in Arkansas are busy bemoaning “corporate greed” and “tax cuts for the wealthy,” their champion, Beebe, is handing out taxpayer money to his favorite corporations. Where’s the outrage?
A spokesman for the company, Adam Ruple, blames the company’s poor performance on the “decrease in demand, attributed to the nonrenewal thus far of the federal production tax credit.”
In other words, government hasn’t artificially created enough demand for alternative energy – so it should keep trying, because the company really needs the money.
According to another statement from the company, however, demand for “wind power installation” is expected to decrease by 70 percent from 2012 to 2013 – and that’s assuming the federal tax credit is extended.
A spokesman for the Arkansas Economic Development Commission told ADG that the company’s poor performance will not affect the amount of goodies they receive from taxpayers. “They’ve got until 2014 to create jobs,” Joe Holmes said. So here we have a taxpayer-funded spokesman who is paid not to notice that the company is headed in exactly the wrong direction.
The company “promised” to create 1,000 to 1,100 jobs, when it opened in 2007, according to ADG, and AEDC said in a news release in 2007 that the company “will employ more than 1,000 people in the next five years.”
Before the layoffs, LM Wind Power only employed 300 full-time workers and 140 temporary workers. They are laying off all of those 140 temporary workers, plus 94 of the 300 permanent employees, leaving them with approximately 206 workers.
As LM Wind Power broke ground in 2007, Beebe said, “When a strong partnership like this one can form across an ocean and bring 1,000 high-quality jobs to Central Arkansas, it gives us a glimpse of our potential for the future.” Apparently, our future is millions of wasted taxpayer dollars and 206 jobs.
This is the latest example of the failures of cronyism. We see it at the federal level all the time: Obama doling out hundreds of millions of taxpayer dollars to the solar energy company Solyndra, which subsequently went belly-up. These incidents happen at the state level as well, but don’t always get the scrutiny they deserve.
Quite simply, this is the government picking winners and losers. State and local governments are gambling, trying to interfere in the market and create demand for products that they like – and their friends are invested in – and they’re using your money to do it.
On Oct. 28, 2008, as LM Wind Power opened its doors for business, Beebe said, “Today we celebrate the result of this successful partnership.” Governor, who’s celebrating now?
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