Thursday, February 02, 2006

KY News Details Tax Deal for Move to ET

A reader here found the information about the tax breaks and free land for the Colgate plant relocating to Morristown in a Kentucky newspaper article. After 80 years in Indiana, they're sending 60% of their manufacturing to Mexico and 40% to Morristown. Here's the entire article from the Louisville Courier-Journal:

Tennessee town lands Colgate factory
Incentives play role; Clarksville the loser

By Alex Davis
The Courier-Journal

The Colgate-Palmolive Co. announced yesterday that it will build a toothpaste factory in Morristown, Tenn., as part of a cost-cutting strategy that includes closing a similar plant in Clarksville, Ind.

The 475 employees at the Clark County facility learned in October the plant would stop production by Jan. 1, 2008, ending more than 80 years of Colgate manufacturing in Southern Indiana.

Yesterday's announcement provided new details about Colgate's plans for toothpaste production. Officials in Morristown, for example, said the new plant there would employ 220 people — less than half the number in Clarksville.

They also said they have agreed to give Colgate 40 acres for the factory at no cost, along with money for infrastructure, a seven-year property-tax abatement and other incentives.

Tennessee also is a right-to-work state, which means employees there aren't required to join a union or pay dues. Indiana Gov. Mitch Daniels said last month that Colgate decided to leave Indiana because company officials "want to be in a right-to-work state."

Daniels stopped short of endorsing right-to-work legislation in Indiana, but his remarks about Colgate were later cited by Kentucky Gov. Ernie Fletcher as an example of what can happen to a state that requires union membership at unionized facilities. Fletcher is pushing for a right-to-work law, which drew a rotunda-packing union rally at the state Capitol Tuesday night.

Brett Hall, a spokesman for Fletcher's office, said Colgate's decision to move to a right-to-work state reaffirms the governor's reasoning for a similar law in Kentucky.

Rick Davis of New Albany, Ind., a 30-year veteran of the Clarksville plant, called the decision to move to Tennessee "sickening." Davis said he earns about $22 an hour, the average wage for a union employee. He said the move to Morristown was based on "corporate greed" and the company's desire to "get rid of unions."

In a statement yesterday, Colgate said the move was based on the cost of land, the cost of preparing a site and unspecified operating costs.

Allison Klimerman, a spokeswoman in the company's New York City headquarters, did not respond to a question about whether union laws played a role in the process.

The first layoffs at the Clarksville plant are scheduled for April. Larry Edwards, president of United Food and Commercial Workers Local 15, said about 20 people will be let go then.

Workers who lose their jobs will be offered a range of benefits based on age and years of service. The longest serving will be eligible for full retirement, Edwards said. Others will receive partial retirement or a cash buyout option worth $10,000 for each year of service. Edwards said the youngest workers will get two weeks of severance pay for every year worked. Edwards said an aggressive effort will be made to unionize the Morristown plant.

He also repeated challenges to the accuracy of Daniels' claims about right-to-work legislation.

Edwards said the company told him the union had met all the requirements for a new factory. He said the real reason Indiana was not chosen for the facility was because its package of tax incentives and land fell about $5 million short compared to locations in other states.

Most industrial sites in eastern Tennessee are not unionized. Thom Robinson, president of the Morristown Area Chamber of Commerce, said he didn't have details about wages at the new facility. He said Colgate agreed to meet and surpass a local request that workers earn at least $9.50 an hour.

Morristown Mayor Gary Johnson said he also didn't talk about right-to-work issues with Colgate. He said the city's location, its incentive package and its track record of luring industrial jobs played a role in the company's decision.

Edwards also said about 60 percent of Colgate's toothpaste production in Clarksville is moving to Mexico, and he said some shaving-cream production is also being outsourced. He said the remaining 40 percent of toothpaste production is being shifted to Morristown.


  1. Anonymous9:56 PM

    Doesn't Jack Fishman own the Tribune and sit as head of the Morristown Industrial Board?

    So where is the news about the entire package of incentives given to Colgate?

    The silence in deafening.

  2. You are correct on all counts.

    Thank goodness one news service, though out of state, was able to not only get the information but to also publish it.