Company says right-to-work not reason for expansion

March 15, 2012

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.


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