Company says right-to-work not reason for expansion

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The lone company being held out as an example of how Indiana's right-to-work law is bringing more business to the state says the new labor law had nothing to do with its decision to expand its Indiana operations.

MBC Group President Eric Holloway said Thursday that he always planned to expand his Brookville operations and that a state press release issued two weeks ago mistakenly quoted him as saying right-to-work legislation factored into his decision.

"We are not a union shop. The effect that this was going to have was not going to affect our decision one way or another," said Holloway, whose company estimates that its planned $4.1 expansion will create up to 101 new jobs.

The economic impact of politically-charged right-to-work laws, which make it illegal to force workers to pay union dues, is difficult to gauge because of competing claims by their conservative backers and liberal opponents, and the shifting nature of the economy. Indiana, which last month became the 23rd state to ban unions from collecting mandatory fees, is no exception.

The fight over the legislation drew thousands of union protesters to the Statehouse in January and led House Democrats to boycott periodically in an effort to block the measure. Throughout the debate, supporters said they had companies ready to move to Indiana if the law passed work but refused to name those companies, citing private negotiations.

Republican Gov. Mitch Daniels said this week that the new law is the reason 28 companies are considering moving to Indiana and the reason three companies have already committed to doing so. He said he wouldn't name any of the companies "until we have their permission to," making his claims impossible to verify. The only company he has named thus far is MBC.

"It is beyond dispute that right-to-work is an enhancement to Indiana's business environment," said Katelyn Hancock, the spokeswoman for the Indiana Economic Development Corporation. Daniels' spokeswoman, Jane Jankowski, did not respond to multiple requests for comment Thursday.

Hancock said Holloway told the state he supported the new right-to-work law, and he told the Associated Press he personally supports the new measure. But he also said Thursday he had long planned to expand in Indiana because he is a native Hoosier and already has the infrastructure in place to expand.

It was in an IEDC news release last month that Holloway was quoted as saying, "With its low tax environment, robust infrastructure, superb logistic support network and right-to-work status, Indiana was a no-brainer location for us."

Holloway, whose company makes hard plastic packages for electronics such as cellphones and chargers, said he signed off on the statement but probably would have changed it had he noticed the "right-to-work" language.

"When the governor speaks, he speaks off the cuff, and he may have said that the reason why we were adding employees was because of right-to-work," Holloway said, whose business is eligible for up to $725,000 in tax credits if it follows through with its promised jobs.

There could be another explanation.

Gary Chaison, a professor of industrial relations at Clark University who has studied right-to-work's economic impact, said those who back the laws, such as Daniels, may feel pressure to show that the fight to pass them was worth it.

"I think there's tremendous pressure to show results," Chaison said. "I don't think the payoff is going to be there and it's going to be very difficult to prove."

The Indiana AFL-CIO used the news Thursday to rally union members to vote against right-to-work supporters in November's elections.

"While it's not shocking, it's disappointing that our officials would stoop to this level in order to deceive the public which they are supposed to represent. It's equally disgusting that the administration is clearly pressuring businesses that are applicants for or recipients of state economic development incentives into furthering this deception," the AFL-CIO wrote in a Thursday email to supporters.


  • Message for Paul
    Try this option Paul. If you invest $5.00 in the stock market, everyday you work, the funds are compounded month over month, and year over year, and the stock market has returned approximately 12% on average over the last forty years, with many years providing returns much higher. Stop by your local stock broker's office and have them run the numbers for you. Ask you friends who invested 4% or more of their salary in a 401K, and talk about the growth they experienced over a forty-year period. Every dollar invested in the stock market since the crash of 2008 has returned a huge profit to those who saved and invested. My point was quite simple start saving money, a little at a time, and you will be very surprised what happens to those funds over a forty year period. The days of $30 per hour jobs on an assembly line are gone. Those who save and invest will do well, those who do not will live a much different life than their fathers before them.
    This was another false newsflash from King Mitch showing Hoosiers how great HE is
    • The power of interest
      Paul, there was definitely a time where the $100/month turning into $1M was (optimistic but) believable. Your claim on the DJIA ignores dividends, which can be the primary source of returns for mature industrial companies (AT&T being an excellent example). For the record, one would require an 11.5% annual return rate to make the goal. Your comment about it only being worth $200k would require a 6% CAGR. Actual historical total stock market returns vary based on when the study was done, but generally they fall into the 9.5 - 10.0% range.
    • the magic stock market?
      Terry, $100 month invested in the stock market for 40 years will equal $1,000,000? That's $48,000 of total investment turned into $1,000,000? I'm a little skeptical about that math.

      Forty years ago today, the DJIA closed at 936.71. Today, it opened at 13252.76. That's a cumulative increase of 1,315%. So, if you had the $48,000 to start with 40 years ago, invested it equally in the DJIA stocks (and didn't even have to pay any fees), you'd have $631,113.57. Then, when you consider that you would've only started with $100 and been continually investing, you would have ended up with much, much less, maybe $200,000. So, what's the lesson here? You need to try to save a lot more than five dollars a day.
    • Dream
      An illegals dream !
    • It is all about Jobs
      I continue to believe that the jury is out on this law that promises jobs growth. As for Union Dues and retirement, I believe that every worker who puts five dollars into the stock market, every day he/she works, will create a retirement nest egg worth over one million dollars over a forty year period. That equates to $100 per month, and was calculated based on the rate of return for the stock market over the last forty years. I believe that was the same premise sold to union workers some forty or fifty years ago. When the union voted down the Stamping Plant because the wages were going to be $15 per hour, plus benefits, I started to wonder how many companies would really think about Indiana as a manufacturing base.
    • Right-to Work Expansion
      Just remember.
      Those who wanted this passed got what they ask for.
      To Bust the Union's
      so you dont want to pay union due's ok don't.
      those who wish to withdraw ok do so.
      But rember your retirement is paid buy the union due's it collects.
      My Retirement is not paid by Chrysler it come's from the union and the Due's of every employee.
      so it you want to throw your life away and work till your 70 for goverment S.S. go ahead withdraw and dont join it's your choice.
      But Dont cry when you are having hard times making end's meat and wishing i would have wished i had joined ...
      Too all those who are withdrawing just think you just screwed your fellow worker from getting his or her's retirement..

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