Last week, the Missouri-based battery company Energizer announced plans to close its factory in Bennington.
The company said it was shuttering the Vermont plant, which manufactures hearing aid batteries, and moving the operation to a new facility in Portage, Wisconsin, following a $2 billion deal to purchase Rayovac.
The Energizer closing in Bennington will eliminate about 100 jobs. The layoffs are expected to deepen financial strain in the Southwest region of the state, which has seen a sharp decline in employment opportunities since the Great Recession.
Gov. Phil Scott called Energizer’s plans "disappointing" in a statement released last week. And he blamed the company’s move on larger problems with the state’s business climate.
"This decision is an unfortunate example of why those of us in Montpelier need to work together to make Vermont a more affordable place to do business and make sure our policies help businesses thrive rather than creating unique burdens and barriers to growth that make us less competitive with other states," Scott wrote in a statement last week.
The governor’s statement draws a direct connection between the state’s business climate and Energizer’s plans to shutter the factory.
We wondered: Are Vermont’s policymakers to blame for Energizer’s pending departure?
Energizer has said it is closing the Bennington factory — which was downsized in 2015— to consolidate operations in the Wisconsin Rayovac factory, which also produces hearing aid batteries.
The only public statements Energizer has made on the decision indicate it is making the move because it would be more efficient for the company to produce the hearing aid batteries in one factory. The Portage plant employs more than twice as many workers than the Bennington facility (about 225 compared to 90). It’s also slightly larger.
"In order to be successful as a larger company, we are making significant investments to better utilize our existing manufacturing facilities, reduce complexity in our operations, and enhance service to our customers," Marcus Boolish, Energizer’s director of government affairs wrote in a letter to Sen. Dick Sears, D-Bennington, last week.
Nikki Eaves, an Energizer spokesperson, offered a similar explanation to the Bennington Banner, saying that the facility in Wisconsin is equipped to handle the company’s hearing aid production.
"As part of the integration," she said, "we reviewed our combined manufacturing footprint and determined the total demand for specialty batteries can be produced more efficiently in one facility."
The company did not respond to questions from VTDigger about whether the state’s business climate contributed to its decision to leave the state.
But Rebecca Kelley, a spokesperson for Scott, said that it was "self-evident" that Energizer is moving out of state because Vermont’s business environment isn’t competitive.
She said that if it was "advantageous" for Energizer to ramp up its production in Vermont, the company would have kept operations here.
Kelley pointed to the fact that Vermont has among the highest power costs in the nation and some of the highest corporate and property taxes, according to the Tax Foundation’s latest business tax climate index. In 2018, Forbes ranked Vermont 47th in its U.S. "Best for Business" rankings and said that the cost of doing business in the state is 12% higher than the national average.
"Businesses are going to do what’s in the best interest of the business," Kelley said. "If their decision is to leave the state for another state, that indicates it is more advantageous and more competitive in that other state."
Kelly did not, however, provide any additional evidence that Vermont’s business climate contributed to Energizer’s factory consolidation.
Sears, the senator from Bennington, said it would be hard to evaluate whether the governor’s statement is true, unless the company provided more information about its decision.
"I think it’s unclear what the reasons are for them not investing in Vermont," he said. "You can generalize and say it’s anti-business and Wisconsin’s more business-friendly. I don’t know if that’s true or not."
The senator said he couldn’t recall the company lobbying legislators on business issues in the Statehouse, except on one occasion. About a decade ago, when Vermont banned mercury in batteries, the company asked lawmakers for a period of time to phase-out use of the chemical instead of an immediate ban. Sears said he worked to get that language written into the bill.
Kelley said the governor’s office was seeking more information from Energizer about its reasons for leaving Vermont.
Sen. Brian Campion, D-Bennington, said Scott should have that conversation with Energizer before he "speculates" on its motivations.
"I think it’s important to hear directly from Energizer on what kind of things would have or even could keep them here," Campion said, noting that the company doesn’t plan to fully shutter its doors in Bennington until 2021.
"Are there things that could be done between now and then that could keep Energizer here?"
The governor is correct that by most measures, when compared to other states, Vermont ranks low on business friendliness. But his claim is specifically about Energizer’s reason for leaving.
According to Scott’s statement, the fact that Energizer is moving away, in and of itself, reveals the company wasn’t satisfied with Vermont’s business environment.
His office can provide no evidence to support his claim. The only reason Energizer has cited for its move is that consolidation of operations in its Wisconsin facility — recently purchased from Rayovac — will streamline production.
We rate this claim false.