Hillary for America

"Johnson Controls" +

0:30 ad run in Duluth, MN from Feb. 23, 2016.

[Music]

Hillary Clinton:  This is Johnson Controls.  When the auto industry was going under, car parts companies like them begged taxpayers for a bailout and they got one. 

But now that Johnson is back on its feet, they're gaming the system and moving profits to Ireland so they can avoid paying taxes here at home.

It's an outrage. 

If I"m president when companies walk out on America they'll pay a price.

Male Announcer:  Hillary Clinton.  She'll make America work for us.

Clinton (voiceover):  I'm Hillary Clinton and I approve this message.

Notes:  The Feb. 23, 2016 press release...

In New Minnesota TV Ad, Hillary Clinton Pledges to Crack Down on Inversions

“When companies walk out on America, they’ll pay a price”

Duluth, MN — Hillary for America is releasing a powerful new ad first airing in Duluth, Minnesota, where Hillary Clinton pledges to end corporate “inversions” while standing in front of Johnson Controls, a company planning to use that tax gimmick to move profits overseas to avoid paying their fair share in the United States.  Hillary Clinton has released a  unique, tough and targeted plan to end these tax-avoidance measures that big corporations like these use to avoid paying their fair share in the United States and instead invest that money here at home.

The new ad, “Johnson Controls”, focuses on a Milwaukee, WI, based auto parts company that recently announced a merger estimated to let the combined companies keep $150 million in taxes by moving abroad to Ireland to shirk its U.S. tax obligations.  In the past decade, nearly 50 companies have chosen to leave the United States for a foreign country on paper, saving billions of dollars in taxes through these so-called “inversions” and related transactions.

“Now that Johnson is back on their feet, they’re gaming the system and moving their profits to Ireland so they can avoid paying taxes here at home,” says Hillary Clinton in the ad. “It’s an outrage.  If I’m president, when companies walk out on America, they’ll pay a price.”

Last year, Hillary Clinton rolled out her plan to end inversions and invest in America instead. She also denounced a recent Pfizer-Allergan deal – in which Pfizer is merging with Allergan, giving up its identity as a U.S. company to help it permanently avoid paying its fair share of taxes on as much as $70-$150 billion. You can read her full plan here https://www.hillaryclinton.com/briefing/factsheets/2015/12/08/ending-inversions-and-investing-in-america/  

The ad will begin airing in the Duluth, Minnesota, market on Tuesday and will air in rotation with other ads in the market.
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Johnson Controls rebutted the criticism in an op-ed run on the Detroit Free Press website on March 8. 

Johnson Controls CEO sets the record straight—says company never took auto bailout funds in new op-ed

In this political season, our recently announced merger with Tyco has become fair game. Unfortunately, it has been portrayed that Johnson Controls accepted money from the Federal government in 2008 as part of the U.S. auto industry bailout.
That is simply not true. Johnson Controls did not request and did not receive aid from the government during the financial crisis. Nor did the company declare bankruptcy. 
In fact, Johnson Controls did not even request an appearance before Congress on this subject. Rather, we were asked by customers and the Senate Banking Committee to testify in 2008 on behalf of automotive suppliers on proposed government support to U.S. automakers, who were struggling due to the financial crisis. 
As a representative of the broad supply chain, our President and Chief Operating Officer at the time, Keith Wandell, encouraged Congress to support the automakers, noting that failure of even one of them would have devastating consequences for the entire industry, including many U.S. suppliers, particularly many small, women, and minority-owned businesses. 
Let me set the record straight for our customers, suppliers, employees as well as interested citizens by referring to what the company actually did, as stated in our 2008 testimony. 
Truth: Johnson Controls was not in financial distress and did not request aid from the government.
The testimony: “We are diversified, profitable and have a strong balance sheet. Unlike many automotive suppliers, we would weather this storm.”
In fact, Johnson Controls testified that it was financially strong enough to step in and had taken action itself to help support the industry. 
The testimony: “Recently, a minority supplier to Johnson Controls, Plastech Engineered Products, failed and went into bankruptcy. This supplier had $800 million of revenue…providing parts to 52 vehicle assembly plants. Had Johnson Controls and the first-tier lending group not acquired Plastech’s assets out of bankruptcy… the supplier would have been liquidated, and forced the shutdown of these 52 assembly plants.”
The company’s participation and testimony in the Senate hearing was focused on the overall auto industry, not on Johnson Controls.
The testimony: “Our main concern is that once cascading supply chain interruptions would begin, many suppliers will fail due to the interdependence of the supply chain. Many of the companies which would be impacted are small, women and minority-owned businesses.”
I encourage you to read the entire transcript, which is available on our company website, johnsoncontrols.com. 
Since the financial downturn, Johnson Controls has played a vital role in the recovery and growth of the U.S. economy, and continued to thrive as a leading global multi-industrial company.
Johnson Controls has been and will remain a major employer in the U.S. with nearly 36,000 employees. Since the low point of the financial crisis, Johnson Controls employment in the U.S. has grown by 8,000 jobs. 
And we continue to invest in the U.S., spending $400 - $600 million per year in capital expenditures. In recent years, the company invested an additional half billion dollars on new IT initiatives in the U.S. Including our equity joint ventures, our U.S. capital investments swell by another $100 - $200 million annually.
We spend approximately $500 million per year in the U.S. on research and development, including work to develop advanced battery technologies for hybrid and electric vehicles. 
This fall, Johnson Controls will spin off its automotive seating business into the independent automotive seating company Adient. The two companies will continue to pay significant U.S. taxes -- in excess of $300 million annually in federal and state income taxes as well as $50 to 100 million in property tax, sales and use tax and excise tax. In addition, the companies will continue to pay hundreds of millions in payroll taxes related to our U.S. employees.
At about the same time, Johnson Controls will merge with Tyco International, the next step in the company’s journey to grow in the U.S. and globally, drive innovation and make buildings smarter, more secure and energy efficient. This merger is not motivated by taxes, as has been suggested, but rather an incredible opportunity to combine two global leaders, which will lead to continued investments and expanded opportunities for our U.S. workforce.
While we will be separate companies, Johnson Controls and Adient remain committed to growing and investing in the U.S. We won’t allow distractions of the campaign season to divert us from the decisions we make every day to invest in channels, markets and products that create growth, serve customers and increase shareholder value. 
Sincerely,
Alex Molinaroli,
Chairman, President and CEO, Johnson Controls