When Capital One expanded its call center in Sioux Falls in 2012, all of South Dakota’s leading lights came to cheer:
Recall that the people in this picture hyperventilated once upon a time that President Barack Obama would kill jobs like these with the Credit Card Reform Act. Desperate to live up to their own fabricated fears, that Governor’s Office of Economic Development handed Capital One a $200,000 workforce training grant… which is funny, because at the time, both Governor Dennis Daugaard and Capital One CEO Richard Fairbanks said Sioux Falls landed those new jobs because of South Dakota’s already excellent workforce:
The South Dakota Governor’s Office of Economic Development helped recruit Capital One to Sioux Falls, and offered the company a $200,000 grant to assist with the cost of training new employees in Sioux Falls. “It’s great news to hear that Capital One is bringing hundreds of solid-paying jobs with good benefits to our state,” said Gov. Daugaard. “It’s clear that our workforce and regulatory environment are helping strengthen our financial services industry. This is the kind of company we like to see in South Dakota, and I’m pleased to welcome Capital One to our state.”
“The strength and resilience of Capital One’s business model has served us well through the recession. As we invest in our business, we appreciate the importance of growing and investing wisely in our communities and in our people,” said Richard D. Fairbank, Chairman and CEO of Capital One. “I have worked with my long-time friend Chairman Tim Johnson for many years and we are excited to come to South Dakota. We know that there is an experienced and talented workforce to tap into here, and we are very pleased to be able to bring new, high quality jobs to the state. We appreciate the partnership and support we have received from Governor Daugaard and the South Dakota congressional delegation” [emphasis mine; Governor’s Office of Economic Development, “Capital One Commits to Maintaining Sioux Falls Jobs and Adds 400 New Jobs” 2011.11.15].
Did that headline say “Commit”? Less than four years after South Dakota committed to that corporate handout (and remind me: just how much training does one need to answer the phone?), Capital One is shutting down its Sioux Falls call center, giving 750 employees 90 days to find a new job. Capital One is blaming its departure on our lacking workforce:
The company told state officials that it can’t retain or attract enough employees now because once the recession ended, the worker shortage in South Dakota began.
“But as we recovered, the workforce demands, not only for Capital One, but for a lot of employers across the state became more challenging, and apparently for Capital One they decided it was more difficult than they could bear,” Costello said [Angela Kennecke, “Capital One Blames Worker Shortage for Closure,” KELOLand.com, 2015.07.23].
Steve Sibson properly identifies Capital One’s skipping town as a predictable failure of crony capitalism:
Don’t expect a thank you note from Capital One stockholders. They will just take the money and run.
Only “smart communities” would take money away from taxpayers and give to big corporate special interests in order to create jobs that are not needed. I wonder how much the GOED offered Capital One to not make the decision to leave South Dakota? I wonder if the Governor will now spend less of our taxes on subsidizing recruiting costs for private business interests, since we have 750 less jobs to fill? Perhaps someone should tell the Blue Ribbon task force that we can pay teachers more by paying corporations less by stop subsidizing their expansions via TIFs and other so-called economic development grants, by stop subsidizing their recruitment costs, and by stop subsidizing their training costs [Steve Sibson, “Capital One Leaving Sioux Falls Is the Latest Failure of Crony Capitalism,” Sibby Online, 2015.07.24].
But don’t expect crony capitalist GOED chief Pat Costello to learn from this mistake:
“Hindsight is always 20/20, but if I was back in 2012 and had the opportunity to incentivize 700 new jobs for $200,000 for the state, I’d do that again,” Pat Costello said [Kennecke, 2015.07.23].
We get fleeced, and Costello says he’d back his fuzzy bottom up to the shears all over again. Come and get it, Corporate America!