VULTURE CAPITAL: Low-flying Kestrel firm that Walker lured with big bucks is late again on its WEDC loan payment | WisCommunity

VULTURE CAPITAL: Low-flying Kestrel firm that Walker lured with big bucks is late again on its WEDC loan payment

We warned you about this back in January 2012. It was an economic-development deal engineered by the Walker administration that sounded too good to be true. And that's still the case.

Back then, Gov. Scott Walker zoomed up to Superior with an entourage to breathlessly tout news that the state had succeeded in attracting high-tech start-up Kestrel Aircraft Co. to the area. The firm said it planned to build a small, executive plane made of carbon fiber, and it promised 600 new jobs. The Wisconsin Economic Development Corp., Walker's own creation, presented a fat financial incentive package to lure the firm in, but you've got to wonder who lured whom. Because here it is, two and a half years later, and what of Kestrel? Not very high-flying.

From the Capital Times:

Superior-based Kestrel Aircraft Company — a firm touted by Gov. Scott Walker as an example of his business recruitment efforts — hasn’t made any payment on its $4 million in loans since October. It is supposed to pay $6,600 monthly and is now over $26,000 in arrears.

But it's worse than that, beause the entire financial package the state pledged to attract Kestrel was $112 million. Republicans like Walker who love to criticize President Obama for spending a lot of economic recovery dollars to create new jobs in, for example, the solar-power industry or for high-speed rail, themselves remain quite willing to spend up to $187,000 per each new Kestrel job that remains imaginary.

Walker's attitude toward federal funding is entirely situational. His decision in 2011 to kill the $810 million federal grant to build a high-speed passenger rail line linking the state's two largest cities to Chicago and the Twin Cities was predicated on his claim that federal dollars were being wasted on a project that wouldn't create enough jobs, that the train wasn't needed and that the federal government was running deficits. Besides, Wisconsin was "broke" and couldn't afford nice things. That was then; but so was this Kestrel deal, and Walker seemingly had no trouble reconciling his contrary opinions on using federal money to take job-creation risks.

Never mind that the rail line would have created hundreds of jobs, too, while costing Wisconsin taxpayers less and serving hundreds of thousands of interstate passengers across southern Wisconsin. Nothing wrong about taking economic development risks in principle, but by contrast Kestrel plans to build a pricey plane that a relatively small group of well-heeled customers might buy -- you know, customers like governors who need to fly around in comfort to fund-raising events and ribbon-cuttings. That is, if the firm can ever get off the ground.

Right now, Kestrel is having trouble merely meeting payroll, and remains embroiled in a legal battle with local communities in Maine which are upset that the firm jilted them for the financially cozier offer from Team Walker.

Ironically, 100 of those 600 pledged Kestrel jobs would actually be located not in Superior but Maine, the supposed "loser" in this competition. Maine under Paul LePage, another reactionary Republican governor, offered similarly huge sums to lure Kestrel to his state. Of further irony, many of the dollars being pledged by both Walker and LePage were controlled by their states but actually came courtesy of the federal treasury. It apparently is okay to rely on federal money when it's your pet project, but not when it's a project of a Democratic opponent. Such funding is "certain" when you propose to use it, "uncertain" when your opponent does.

So far, Kestrel has only been been one big frak-up for Walker, whose WEDC itself is still mired in financial mismanagement and false starts.

Speaking of which: Walker was in Pleasant Prairie this week to breathlessly announce a major expansion by office-supply firm Uline Corp. Not once in the all the posturing by Walker and other Republicans present at a media event was anyone reminded that the original deal bringing Uline and 1,000 jobs to the state was arranged in 2008 by the Doyle administration and Mary Burke, then the state's commerce secretary and now Walker's likely Democratic opponent in the fall election.

Pesky, pesky details. Just move on -- but only by fancy light plane, not via high-speed rail.

Published

June 4, 2014 - 4:15pm

Author

randomness