Trump’s tax cuts kill over 5,000 jobs

[shwnrob]

Multi-billion dollar US corporation uses Trump’s tax scam to kill over 5,000 jobs
By Tommy Christopher |
JANUARY 23, 2018
As expected, the GOP's tax scam is turning out to be nothing but bad news for American workers.

(AP Photo/Alex Brandon)
Many companies have loudly trumpeted one-time bonuses following passage of the Trump tax scam while quietly announcing massive layoffs. But one company now admits it will use the windfall to fund the gutting of over 5,000 jobs.
On Tuesday, personal care product corporation Kimberly-Clark — the maker of Kleenex, Huggies, and many other popular brands — announced that it will be closing or selling 10 facilities and shedding about 12 percent of its workforce as part of a so-called “Global Restructuring Program.”
The company told reporters on a quarterly earnings conference call that the Trump tax cuts would help fund the layoffs and closings.
Chief Financial Officer Maria Henry explained the effects of “tax reform” at the top of the call, first bragging that the tax savings would be the equivalent of a 6 percent increase in earnings.
“We also anticipate ongoing annual cash flow benefits from tax reform,” Henry continued, “that provides us flexibility to allocate significant capital to shareholders,” which is how many companies said they would use their tax windfall, rather than to create jobs.
Henry went on to say that those tax benefits would also fund “our restructuring program over the next few years.”

[Originalist]

Multi-billion dollar US corporation uses Trump’s tax scam to kill over 5,000 jobs
By Tommy Christopher |
JANUARY 23, 2018
As expected, the GOP's tax scam is turning out to be nothing but bad news for American workers.

(AP Photo/Alex Brandon)
Many companies have loudly trumpeted one-time bonuses following passage of the Trump tax scam while quietly announcing massive layoffs. But one company now admits it will use the windfall to fund the gutting of over 5,000 jobs.
On Tuesday, personal care product corporation Kimberly-Clark — the maker of Kleenex, Huggies, and many other popular brands — announced that it will be closing or selling 10 facilities and shedding about 12 percent of its workforce as part of a so-called “Global Restructuring Program.”
The company told reporters on a quarterly earnings conference call that the Trump tax cuts would help fund the layoffs and closings.
Chief Financial Officer Maria Henry explained the effects of “tax reform” at the top of the call, first bragging that the tax savings would be the equivalent of a 6 percent increase in earnings.
“We also anticipate ongoing annual cash flow benefits from tax reform,” Henry continued, “that provides us flexibility to allocate significant capital to shareholders,” which is how many companies said they would use their tax windfall, rather than to create jobs.
Henry went on to say that those tax benefits would also fund “our restructuring program over the next few years.”


Big deal. Why keep workers you can do without?

[Jito463]

As expected, the GOP's tax scam is turning out to be nothing but bad news for American workers.

How does one company's actions make the tax cut a scam?

[Aquila]

Big deal. Why keep workers you can do without?

I don't think that's the issue. Every company has to occasionally shave the fat. But here's the issue:

The company told reporters on a quarterly earnings conference call that the Trump tax cuts would help fund the layoffs and closings.
Chief Financial Officer Maria Henry explained the effects of “tax reform” at the top of the call, first bragging that the tax savings would be the equivalent of a 6 percent increase in earnings.


The problem is, as I see it, is giving these companies tax payer dollars to boost their profit margins enough so that they don't need the workers. Without the tax cuts, they couldn't afford to lay that many people off. What they will do is meet their earning projections using the tax cut, lay off workers to boost profits even more, and then in the next year or two, they'll begin hiring again... at lower wages here and abroad.

We just let our tax money empower companies to just drop employees that they would have otherwise needed to meet their projected earnings goals. These individuals will now need unemployment and financial assistance until they can find jobs that can support their families. And if this is a trend in the economy, finding decent comparable jobs will be difficult. Most will take a pay cut. And a number of individuals will have had years of seniority lost. In the end, tax payer dollars helped companies meet projected financial goals, thereby allowing companies to lay off workers. Those workers will need assistance with our tax payer dollars. And the median income of those laid off will have dropped significantly, only adding to the lower wages that Americans are struggling with.

It's a very bad deal in the long term.

[jfrog]

I don't think that's the issue. Every company has to occasionally shave the fat. But here's the issue:



The problem is, as I see it, is giving these companies tax payer dollars to boost their profit margins enough so that they don't need the workers. Without the tax cuts, they couldn't afford to lay that many people off. What they will do is meet their earning projections using the tax cut, lay off workers to boost profits even more, and then in the next year or two, they'll begin hiring again... at lower wages here and abroad.

We just let our tax money empower companies to just drop employees that they would have otherwise needed to meet their projected earnings goals. These individuals will now need unemployment and financial assistance until they can find jobs that can support their families. And if this is a trend in the economy, finding decent comparable jobs will be difficult. Most will take a pay cut. And a number of individuals will have had years of seniority lost. In the end, tax payer dollars helped companies meet projected financial goals, thereby allowing companies to lay off workers. Those workers will need assistance with our tax payer dollars. And the median income of those laid off will have dropped significantly, only adding to the lower wages that Americans are struggling with.

It's a very bad deal in the long term.

You think they were going to keep those employees even without the tax cut? If you think that I have a bridge in Brooklyn to sale you...

[Aquila]

You think they were going to keep those employees even without the tax cut? If you think that I have a bridge in Brooklyn to sale you...

The tax cut helped them to meet their projected financial goals... without the need of the employees and their production. Without the tax cut, they would have needed those employees, and the production they bring, to meet goal. So, yes, of course they would have kept those employees. If they terminated all these employees without a tax cut to fall back on, they'd not meet projected financial goals and as a result be in the red.

[jfrog]

The tax cut helped them to meet their projected financial goals... without the need of the employees and their production. Without the tax cut, they would have needed those employees, and the production they bring, to meet goal. So, yes, of course they would have kept those employees. If they terminated all these employees without a tax cut to fall back on, they'd not meet projected financial goals and as a result be in the red.

Right. Let's fire a bunch of our employees who are producing money for us just because we get a tax cut. Something's not adding up in your reality.

[Aquila]

Right. Let's fire a bunch of our employees who are producing money for us just because we get a tax cut. Something's not adding up in your reality.

No. It's more like, "Hey, we're getting a massive tax cut. We can meet and even exceed goal with this tax cut alone. Why do we need these employees? Let's cut them loose and restructure, moving more operations overseas where we can find cheaper labor. As a result, we don't have to pay for wages and benefits for all these employees, boosting profit margins even higher. And should we need to rehire next year, we can rehire at lower wages throughout the company, including in overseas markets where the labor is cheaper. Saving money, yet again, in the long term."

And the only ones left standing out in the cold are... the American workers.

If conservative "trickle down economics" worked, the tax cut would be used to increase the wages and benefits of their current employees, would it not?

[jfrog]

No. It's more like, "Hey, we're getting a massive tax cut. We can meet and even exceed goal with this tax cut alone. Why do we need these employees? Let's cut them loose and restructure, moving more operations overseas where we can find cheaper labor. As a result, we don't have to pay for wages and benefits for all these employees, boosting profit margins even higher. And should we need to rehire next year, we can rehire at lower wages throughout the company, including in overseas markets where the labor is cheaper. Saving money, yet again, in the long term."

And the only ones left standing out in the cold are... the American workers.

If conservative "trickle down economics" worked, the tax cut would be used to increase the wages and benefits of their current employees, would it not?

You think they weren't going to cut them loose and restructure and move more operations overseas with or without the tax cut?

You mean to tell me you think a tax cut is the reason they are going to move jobs overseas?

[Aquila]

You think they weren't going to cut them loose and restructure and move more operations overseas with or without the tax cut?

You mean to tell me you think a tax cut is the reason they are going to move jobs overseas?

If they had cut these employees without the tax cut, it would have slowed production... and the move to relocate operations would have cut into their profit margin. The tax cut gave them the money needed to meet, and even exceed, projections... without the need of the workers in question. And so, they can cut these workers and thin the labor pool. If they need to rehire, they already got ride of those with seniority. Now they can hire in at entry level wages if necessary. This will save considerable money in the long term. And it is the tax cut that made it possible.

It's really a no brainer.

[Aquila]

Now, for all those who believe in "trickle down economics"... why didn't this tax cut go to increase wages and benefits for current workers???

[jfrog]

If they had cut these employees without the tax cut, it would have slowed production... and the move to relocate operations would have cut into their profit margin. The tax cut gave them the money needed to meet, and even exceed, projections... without the need of the workers in question. And so, they can cut these workers and thin the labor pool. If they need to rehire, they already got ride of those with seniority. Now they can hire in at entry level wages if necessary. This will save considerable money in the long term. And it is the tax cut that made it possible.

It's really a no brainer.

Cutting employees slows production unless you replace the jobs at a different factory. Tax cut or no tax cut this part is always the same. In other words this is a red herring.

Relocating takes up front money. There's the first point worth considering.

The tax cut gave a lot of up front money. There's the second point worth considering

Cutting jobs and relocating overseas or cutting and rehiring at entry level positions is always cheaper. That's true whether or not there is a tax cut. So red herring again?

So then, you believe they would not have relocated jobs or laid off and rehired if they didn't get a tax cut even though you acknowledge it's cheaper and better for long term profits if they do relocate or layoff and hire?

What interests would they have that would have prevent d them from doing so?

[Aquila]

Cutting employees slows production unless you replace the jobs at a different factory. Tax cut or no tax cut this part is always the same. In other words this is a red herring.

Relocating takes up front money. There's the first point worth considering.

The tax cut gave a lot of up front money. There's the second point worth considering

Cutting jobs and relocating overseas or cutting and rehiring at entry level positions is always cheaper. That's true whether or not there is a tax cut. So red herring again?

So then, you believe they would not have relocated jobs or laid off and rehired if they didn't get a tax cut even though you acknowledge it's cheaper and better for long term profits if they do relocate or layoff and hire?

What interests would they have that would have prevent d them from doing so?

So, you mean to tell me the tax cut had nothing to do with it? lol Sure, go ahead and believe that. :thumbsup

[jfrog]

So, you mean to tell me the tax cut had nothing to do with it? lol Sure, go ahead and believe that. :thumbsup

Until you can answer those questions its you that's in denial.

[Aquila]

Until you can answer those questions its you that's in denial.

Well... I thought I did answer those questions. If you don't believe me when I say that the tax cuts helped this company cut jobs and offset the costs projected for restructuring, maybe you'll believe... the company itself.

The company told reporters on a quarterly earnings conference call that the Trump tax cuts would help fund the layoffs and closings.
Chief Financial Officer Maria Henry explained the effects of “tax reform” at the top of the call, first bragging that the tax savings would be the equivalent of a 6 percent increase in earnings.
“We also anticipate ongoing annual cash flow benefits from tax reform,” Henry continued, “that provides us flexibility to allocate significant capital to shareholders,” which is how many companies said they would use their tax windfall, rather than to create jobs.
Henry went on to say that those tax benefits would also fund “our restructuring program over the next few years.”


Also,

Chief Financial Officer Maria Henry said the company’s gains from the tax overhaul would help offset the cost of the restructuring plan. The company had an effective tax rate of 28.6 percent in 2017, and the rate would drop to between 23 and 26 percent in 2018 as a result of congressional action, boosting year-over-year earnings growth by 6 percentage points, she told analysts during a conference call to discuss recent financial results.
https://www.washingtonpost.com/news/business/wp/2018/01/23/kimberly-clark-maker-of-kleenex-and-huggies-says-tax-bill-helps-fund-plan-that-includes-more-than-5000-layoffs/?utm_term=.6602a66c010b

The issue is, without this tax cut, they wouldn't feel as ambitious financially to make such a move right now. In essence, they aren't making this move because of actual profit that will offset the move... they are making this move because the government has essentially subsidized their restructuring. As a result, American jobs will be lost and production will be moved overseas for the sake of cheaper labor. It's the same old thing we've seen time and time again.

Isn't this massive tax cut supposed to "trickle down" to the American worker in the production of more jobs, hire wages, and better benefits? I mean, isn't that the theory behind all this? Why doesn't it ever really work on a significant scale?