Economy & Jobs
Listen to 5 Minutes w/ Justin Nickels: Economy & Jobs (mp3)
Alderman Nickels & Others Tour a Local Plant
When elected, one of my top priorities will be economic development and job retention. During tough economic times, we must keep and grow the jobs we do have, and position ourselves to attract new industry as the economy improves. To do this, I will work aggressively to achieve Foreign Trade Zone (FTZ) status for our community, eliminating many of the costs that industry faces in the global market.
If we can maintain and grow jobs, we will maintain and grow our tax base, which will lead to lower taxes and lower debt. I will implement an aggressive public communications policy to keep the citizens as informed as humanly possible on the progress of this and all other initiatives.
What exactly is a Foreign Trade Zone (FTZ)?
The Foreign Trade Zone (FTZ) program was created by the U.S. government to facilitate international trade and increase the global competitiveness of U.S.-based companies. The program, which has existed since the 1930s, continues to thrive and change to better meet the needs of American companies in the global economy.
An FTZ is an area within the United States, in or near a U.S. Customs port of entry, where foreign and domestic merchandise is considered to be outside the country, or, at least, outside of U.S. Customs territory. Certain types of merchandise can be imported into a Zone without going through formal Customs entry procedures or paying import duties. Customs duties and excise taxes are due only at the time of transfer from the FTZ for U.S. consumption. If the merchandise never enters the U.S. commerce, then no duties or taxes are paid on those items.
[Source: National Assoc. of Foreign Trade Zones]
How will local companies benefit from an FTZ?
- To take advantage of the Foreign Trade Zone benefits a company has to be liable for customs duty payments to the federal government.
- An FTZ provides duty elimination for products that are sold to customers outside the boundaries of the United States, including Canada and Mexico.
- An FTZ provides duty elimination on items of waste, scrap, and loss during the manufacturing process.
- An FTZ provides duty deferment for products sold to customers in the U.S. for the period of time that those items are in the factory.
- An FTZ provides duty elimination on capital equipment brought into your factory for production use.
Who will benefit from an FTZ?
There are many companies within the City of Manitowoc with potential to benefit from Foreign Trade Zone status, including:
- Manitowoc Company
- Orion Energies
- Burger Boat
- Koening & Vits
- Broadwind Energies (Tower Tech)
- Federal Mogul
- Lakeside Foods
- Dramm Corporation
- Schuette Manfacturing
- Northern Labs
- GKN Sinter Metals, Inc.
- Wisconsin Aluminum Foundry (WAF)
- KI
- Kaysun Corporation
- ECK Industries
How will the FTZ be implemented?
The first step will be to conduct a study on the feasibility of the program for our community. This process takes about year and costs approximately $30,000 – a drop in the bucket compared to the millions in debt we have taken out for business infrastructure in Tax Increment Financing (TIF), with no guarantee the business will survive long enough to pay the debt back in full.
Upon receiving FTZ status, I will put together a public/private partnership to oversee the operations of the FTZ. Through this partnership, I will also work to ensure that salaries and benefits of the small amount of staff needed to oversee the FTZ comes from private funds, not tax dollars.
The successful implementation of this plan will result in local businesses being able to remain competitive, while providing good wages and benefits, and as the national and global economies improve, our local economy will be ahead of the curve. Because the FTZ program allows for future sub-zones to be created, I will aggressively pursue businesses looking to relocate and expand with heavy emphasis on this incentive instead of taxpayer funded business infrastructure.