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JobsOhio fails to save jobs in Mahoning Valley



Published: Sun, September 29, 2013 @ 12:10 a.m.

jobsohio

By David Skolnick

skolnick@vindy.com

BOARDMAN

The consolidation of Verizon Wireless offices in Ohio is leaving one major casualty: the shutdown of its Boardman call center and the loss of 370 Mahoning Valley employees.

JobsOhio, a privatized nonprofit created by Gov. John Kasich’s administration to head the state’s economic-development efforts, recommended a $4.5 million job creation tax credit to Verizon. That proposal was approved in March by the Ohio Tax Credit Authority, which hasn’t rejected a tax credit recommendation by JobsOhio.

The tax credit keeps Verizon — a wireless voice and data service business — in Ohio, but will result in the company closing its Boardman facility by early next year. Already, 65 jobs have been eliminated there.

Verizon’s Dublin facility, which employs 1,867 workers, will close in the first half of next year, and those employees will move “4 miles down the road” to a building owned by the company — Boardman and Dublin are leased properties — in Hilliard, which currently employs 601, said Lauren Merritt, a company spokeswoman.

None of the Dublin employees will lose their jobs in the consolidation, she said.

Some in the Valley criticize JobsOhio and Republican Kasich’s administration for not doing enough to save Mahoning Valley jobs that will adversely affect the local economy.

“State money was used to keep [Verizon] in Ohio, but we were left on the chopping block as they consolidate,” said Boardman Trustee Thomas Costello, also a Republican. “I’d like the state officials to look at other places than Cleveland, Columbus and Cincinnati. When it comes to the jobs, the only ones lost are Valley jobs. The last thing we need is to ship jobs out of the Valley.”

Costello said he understands state officials want to keep jobs in Ohio, “but it’s very difficult to accept the loss in the Valley because we need every job we can get. It’s disappointing the state took away jobs from the Valley.”

Boardman Trustee Brad Calhoun, a Democrat, said the Verizon shutdown will have a “big impact” on the local economy with “families being disrupted and torn apart.”

But Calhoun defended the state’s decision to keep the jobs in Ohio despite the hardship the Valley will face because of the closing of the Boardman location.

“It’s the right thing to do to keep jobs in the state,” he said. “I’d rather they stay in Ohio than leave the state. I understand the business decision and I understand the state’s decision. The state has to hedge its bets. As a region, sometimes you benefit and sometimes you don’t.”

Verizon employees and those who lost their jobs through the ongoing Boardman closure declined to comment to The Vindicator with some current workers saying they were fearful they would lose their jobs, and some who left said they didn’t want to lose their severance payments or violate a nondisclosure clause with the company by talking.

One former employee, who spent more than five years working at the Boardman office and was granted anonymity because of the concerns, said: “I don’t think it’s right for the state to give a tax break to a company to close in one community and open in another. People’s lives are being totally disrupted. This is going to be devastating to this region.”

JobsOhio has been a lightening rod of controversy in recent months.

The Ohio Ethics Commission found Thursday that nine of the 22 JobsOhio officials, including six of its nine board members, required to file secret financial disclosure statements had potential conflicts of interest. The commission hasn’t determined if the conflicts are actual.

In August, the Dayton Daily News reported those same six board members have “direct financial ties” to companies that received tax credits or other state assistance since Kasich took office, and The Dispatch reported that at least two of those companies received assistance after the private agency formed in 2011.

Laura Jones, JobsOhio spokeswoman, wrote in an email about the Verizon deal to The Vindicator: “This was a national consolidation by the company, which, in addition to Ohio, was considering four other states for the move. When the alternative is losing jobs to another state, we are going to look at all options and do what is feasible to keep those jobs in Ohio.”

Jones refused to respond to repeated requests by the newspaper to further discuss the decision.

But Rob Nichols, Kasich’s spokesman, defended it saying, “We saved jobs for Ohio. When a company looks to move out of the state, we’ll do whatever we can to keep them in Ohio. Verizon was consolidating all over the country and we tried to keep them, and were able to get a net job increase.”

The alternative, Nichols said “is to lose jobs to other states. We fight to keep jobs here. We don’t want to see any job lost, but our job every day is to create a job-friendly climate, and that’s been paying off. We don’t want to see any job ever lost.”

The number of jobs being retained and new positions being created at the Hilliard location next year are somewhat fuzzy.

The Ohio Development Services Agency says the tax credit retains 1,906 jobs and creates 500 additional jobs. That information likely came from Verizon.

A March 25 press release from Kasich’s office touting the deal with Verizon to move to Hilliard also mentions the 500 new jobs that would generate $20.8 million in additional annual payroll and retain $94.5 million in existing payroll. While the statement uses the word “consolidation,” it doesn’t mention the closing of the Boardman office.

Nichols said the 500 number is a net increase, taking into account the jobs lost in Boardman.

Verizon has 1,867 employees in Dublin who will join the 601 in Hilliard when the consolidation to the latter community is finished next year, Merritt said.

(About three weeks ago she provided numbers to this newspaper that matched the 1,906 the state listed. Upon further research, she recently revised the numbers.]

Merritt said 500 jobs would be added in Hilliard in the next three years, but says she didn’t believe that was a net number that included the jobs being cut in Boardman.

“We don’t anticipate we’ll see a real drop in total employees in Ohio,” she said.

Verizon’s Boardman office, which employs 381, will close by about March 2014.

The company eliminated 65 continuity marketing positions Aug. 31 at the Boardman call center, located behind its retail store at 475 Boardman-Canfield Road, near the Honda Store and Giant Eagle.

Those 65 were given the option of moving to Dublin and eventually to Hilliard or taking a severance package from the company, Merritt said.

She didn’t know how many made the move and how many left the company.

The 11 people who work at the retail store on Boardman-Canfield Road, which closes Monday, will move to Verizon’s nearby store at 650 Boardman-Poland Road on Tuesday, Merritt said.

Of the remaining workers, 285 of them are part of the company’s customer financial service division. Those jobs will be gone around March 2014. Those workers don’t have the option to keep their jobs and relocate to Hilliard, Merritt said.

They can bid for jobs that will become available in Hillard, she said. But those 285 customer financial service jobs are being transferred to Tennessee, North Carolina and South Carolina, she said.

The company is offering relocation packages of up to $10,000 after taxes for those who choose to transfer. Those who don’t will be given severance packages.

The remaining 20 workers at the Boardman location handle various jobs and will be there until early 2014, Merritt said. She didn’t know what will happen to those workers.

“We’re trying to consolidate our operations and make better use of our real estate,” Merritt said. “None of these decisions are made lightly. Consolidation under one roof at a building we own will save the company money. We’re taking advantage of our existing resources and the easy transition from Dublin. We value our most important asset — our employees — and we’ve worked with them since the day we announced this. We’re taking care of employees, but recognizing what’s good for business and what’s best for our customers.”

Cuyahoga County Executive Ed FitzGerald, who is running for governor as a Democrat next year, has been a frequent critic of JobsOhio, objecting to what he calls a lack of accountability and transparency.

“This whole [Boardman issue] highlights a lot of the problems with JobsOhio,” FitzGerald said. “They’re so secretive we don’t know if [JobsOhio] tried to save jobs in the Valley. It’s impossible to know that, and that’s a fundamental problem with JobsOhio.”

As a private entity, Jobs-Ohio isn’t subject to the state’s open meetings and records laws.

“We don’t know what they’re doing,” FitzGerald said. “It gives the appearance of pitting one part of the state against another. These kinds of economic decisions are controversial under any circumstances, but to have it done in secrecy is even worse. It seems like the state government is helping to subsidize losing jobs [in the Valley]. It understandably infuriates people.”

Chris Schrimpf, Ohio Republican Party spokesman, said JobsOhio has “transformed the way the state does economic development, and Ohio’s econ-omy is coming back.”

JobsOhio, he said, is “the most transparent private company in Ohio,” and that its “ethical standards are tougher than the ones for the entity it replaced.”


Comments

1Brudog99(16 comments)posted 10 months ago

Same old story. Government created tax incentives are nice, but don't cut it in the big picture for businesses. Other than offering to cut taxes for businesses that come (or stay) here, these government created "cheer leaders" can't do much to convince a business to come (or stay) in this area. The golden issues is labor costs. Employers simply can go elsewhere for cheaper labor and save way more than the tax incentive, not to mention that other states are also willing to give incentives. it all boils down to the fact that other states are more willing to sell out it citizen/employees that Ohio, but to the cost of loosing jobs left and right.

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