Early in his first term and until very recently, the Kasich Administration cited the massive corporate aid package it gave Diebold for its new world HQ as one of its crowning achievement. To hear Governor Kasich tell it, Diebold was practically out the door on its way to North Carolina until his Administration fashioned a massive tax and other corporate aid package that would construct, at no reported costs to the company, a brand new corporate HQ campus. And all the company had to do was promise not to terminate more than 20% of its Ohio workforce, and it wouldn’t have to repay any of the financial incentives Kasich bestowed on it.
But almost as soon as it came out, the Kasich Administration’s story began to fall apart. First, there was considerable evidence that Diebold had no real intention to moving out of Ohio in the first place - it had reportedly told the Strickland Administration as much. Instead, they simply solicited a bid from North Carolina to frighten the new Administration into showering Diebold with tax benefits. [Source: Canton Repository] In fact, the Repository discovered that discussions with North Carolina, whom Kasich specifically identified as a major threat to luring Diebold out of Ohio, was so preliminary that the State of North Carolina didn’t even know that the aid package they were discussing involved Diebold at all. Furthermore, the State of North Carolina heard nothing back about the anonymous project that Diebold was using to negotiate with North Carolina for months. It was almost as if all the company was interest in was getting some bid from another State to present to Ohio or something…
And as we’ve covered extensively, the packages offered by the other States were a fraction of what Ohio was offering. Still, Kasich was willing to cough up $55 million in tax incentives allowing Diebold to construct their brand new, world-class global HQ campus…. and all the company had to do to keep the money was agree not to layoff more than 20% of its Ohio workforce. This, according to Kasich, is called job retention. Faced with a nasty fight over Senate Bill 5, Kasich used his “victory” in keeping Diebold in Ohio as a sign his administration was doing big things for Ohio’s economy.
But as we reported back in April, nearly one year to the date when Kasich announced the deal, Diebold had announced enough layoffs for Ohio jobs that it was already dangerously close to hitting the 20% reduction mark, a mark the Administration said the company had to agree not to hit in 15 years. But the company was adamant that these layoffs in no way indicated that they would not go forward with the massive incentive package and the plan to construct the new global campus (at one point the Administration also boasted about how many construction jobs the Diebold package would create as a response to criticisms that it appeared to be a massive giveaway with little benefit.) In addition, it was the widespread criticism of the Diebold deal that led to the birth of the mythical Kasich return-on-investment analysis he says his Administration used. Not surprisingly, the secret formula revealed that Diebold was a great deal for Ohio taxpayers.
But that’s all in the past. What does that have to do with today?
Yep, the Cleveland Plain Dealer reported that Diebold called Kasich up and said: “No, thanks.” What’s even more bizarre, is the company’s stated rationale.
“As we’ve been analyzing our near- and long-term growth priorities, it has become clear that investing more than $100 million in a headquarters facility is not economically feasible given the other priorities for the business at this time,” Diebold President and Chief Executive Thomas W. Swidarski said in a statement.
Now, we’ve said for over a year that the reporting on this deal indicated that the company itself would incur no costs for this project. So, it’s kind of odd for the company to say that this is somehow a cost-cutting measure for them, since ya know, the building was free to them. Well, I mean, practically free. I mean, there was that one little catch that it would costs the company millions to repay the incentive package if they dropped below 20% of its present Ohio workforce.
Hey, was there anything else Diebold announced today with their cost-cutting measure?
As part of efforts to cut costs, Diebold will also eliminate about 500 jobs in North America and Brazil over the next 30 days, including fewer than 75 positions in Northeast Ohio.
In a little over a year after offering Diebold a jaw dropping “job retention package” that gave everyone across the nation sticker shock, Diebold had to back out of the deal because they simply couldn’t even deliver on the measly promise not to downsize its Ohio workforce by more than 20%.
But rest assured, the Plain Dealer reports, Diebold is still committed to stay in Green, Ohio, it says. Like it said a year ago it was committed to keeping at least 80% of its present number of Ohio workers for the next fifteen years. Or like it said back in April it was still committed to constructing the new HQ it announced it was indefinitely scrapping today, thus surrendering the entire aid package Kasich gave it. (Curiously, although the story notes the company called Kasich personally to inform him, there was no response from the Governor’s office on today’s news.)
Under John Kasich and Mark Kvamme’s brilliant, secretive return-on-investment formula, this Administration has the failed Diebold deal and the “thank god Kasich failed” offer to lure Sears. Sears, by the way, was delisted from the Standard & Poor 500 because, well, the only person buying the stock is the hedge fund managing running Sears now. These are the companies that John Kasich and Mark Kvamme concluded were such sure-fire winners they were worth millions in taxpayer-funded corporate welfare dollars for individual companies.
But now you know why we won’t hear Governor Kasich and his supporters talk about Diebold anymore.