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Sears Announces Layoffs In Illinois After The State Gave It Millions In Subsidies

By Pat Garofalo on February 21, 2012 at 9:30 am

"Sears Announces Layoffs In Illinois After The State Gave It Millions In Subsidies"

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Just a few months ago, Illinois gave retail giant Sears $275 million to keep its corporate headquarters in the state, after Sears threatened to move elsewhere (including, potentially, Ohio). To show its appreciation for receiving millions in taxpayer funds, as Greg Leroy pointed out at the Clawback blog, Sears announced last week that it will layoff 100 workers at those headquarters:

Despite a huge subsidy package enacted by the state of Illinois in December, Sears Holdings Corp. has already announced layoffs at its headquarters in the Chicago suburb of Hoffman Estates. Last week, the retailer announced that 100 HQ staff will be laid off…That December deal, valued at up to $275 million, came after Sears threatened to relocate in headquarters to another state. Its predecessor company, Sears, Roebuck & Co., played the same “job blackmail” game in 1989. The $168 million, 23-year deal it won then was soon to expire when Sears Holdings announced it might again be footloose.

The deal that Illinois signed with Sears actually gives the company the option to lay off another 1,750 workers in the state without penalty, meaning that Illinois paid millions of dollars to potentially see close to 2,000 jobs disappear. “The only surprise is that people are surprised by this,” said state Rep. Jack Franks (D). “The governor knew that this was going to happen, and he pretended he didn’t.”

Shortly after inking its deal with Illinois, Sears also announced plans to close 120 stores nationwide. As Prof. Kenneth Thomas noted, “the jobs crisis apparently has made some states afraid to assert themselves in investment incentive negotiations.”

And Sears is far from the only company to engage in such practices. As ThinkProgress reported in January, mega-manufacturer Boeing closed a plant in Wichita, Kansas after receiving a slew of tax breaks and significant help from Kansas lawmakers which enabled it to land a $35 billion Defense Department contract. “This company has benefited from property tax incentives, sales tax exemptions, infrastructure investments and other tax breaks at every level of government. These incentives were provided in an effort to retain and create thousands of Kansas jobs,” said Wichita Rep. Jim Ward (D), responding to Boeing’s move. “We will be less trusting in the future of corporate promises.” Perhaps Illinois should also be more hesitant to throw money at companies in the hopes of preserving jobs.

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