The world’s largest manufacturer of small gasoline-powered engines is closing a Milwaukee plant due to poor market conditions and the need to consolidate production. Last year the Milwaukee plant was more productive sending generators after storms knocked out power along the Gulf Coast. About 430 employees will be moved to B & S facilities, including Alabama & Georgia.
According to the B & S corporate website, Auburn is the site of an Engine Power Products Group facility so I am guessing that is where some of the 430 jobs that just left Wisconsin will go. (H’tip to Kyle at North Shore Exponent). Obviously, Alabama & GA are good choices because they are right-to-work states, meaning there is no union interference and less overhead for Briggs & Stratton.
The last paragraph caught my eye:
Outside the United States, Briggs has benefited from low-cost manufacturing plants it opened in the Czech Republic and China. The Czech plants serve Briggs’ European market, including fast-growing Eastern European countries.
Why the Czech Republic? I did a little research and found out that since throwing off communism, the Czech Republic is an attractive place to do business. Heritage ranked them #37 in the 2009 Index of Economic Freedom.The country is the first former member of the Comecon to achieve the status of a developed country (2006), according to the World Bank. Annual GDP averages 6% for the last 3 years. They use a flat tax of 15% for personal income taxes and the top corporate rate is 21% Unemployment is 6.6% and inflation 2.8%. Starting a business takes an average of 15 days, compared to the world average of 38 days.
My Point is we could learn a lot from the Czechs, particularly on taxes. Why else would Briggs move from Milwaukee to the Czech Republic? Because they got a better deal than in union heavy Wisconsin. Proving again that low corporate taxes attract foreign investment. Let’s lower the corporate rate from 35 to 25% like the Czechs and we will see fewer companies leaving the US and moving overseas.