New Guy, Same Agenda

Kurt Bauer grew up in Beloit and vividly remembers the first time he set foot inside the Ingersoll Milling Machine factory in Rockford, Ill., where his father was an engineer.

“I remember being awed by the activity,” he says. “I thought it was cool because I had to wear a hard hat, eye and ear protection.

“There was a huge crane on rails along the ceiling that traveled the length of what seemed like a massive factory. It carried heavy pieces of machinery. There was the sound of machines operating. The floors were painted battleship gray and were spotlessly clean, as were the windows. My father, who was an electronic engineer, told me that the plant owner insisted on clean windows.

“The smell was distinctive; a combination of oil, electrical ozone and drilled metal. Most of the plants and factories I tour today have the exact same smell,” he says.

“I remember how my dad swelled with pride when he showed me the machine he had helped design. He would enthusiastically explain every part of the machine, which was far beyond my comprehension and interest at that age.

“But the sense of accomplishment and achievement was clear. I sense that same pride when I tour plants today,” he adds.

Bauer wasn’t aware of it at the time — he was, after all, only in grade school — but that visit to the factory was a turning point in his life.

Today, Bauer is president and CEO of Wisconsin Manufacturers & Commerce, the state’s largest business advocacy organization. Just 44 years old and only the fourth president in WMC’s 100-year history, Bauer is determined to ensure that manufacturing remains a vital part of the Wisconsin economy.

That may be a difficult task: Since 1990, the state once known for making everything from submarines to musical instruments has shed more than 87,000 manufacturing jobs. At times, as state Sen. Leah Vukmir (R-Wauwatosa) noted last year, there are more government jobs in Wisconsin than factory jobs.

Bauer is undaunted. “There are three ways to create wealth: Manufacturing, mining and agriculture,” he says flatly. “We need manufacturing for the economic health of Milwaukee and the rest the state.”

Should this be Wisconsin? Milwaukee, historically known as “the nation’s machine shop,” still has the second-highest concentration of manufacturing jobs in the United States, according to the website NewGeorgraphy.com. (Houston is first.) WMC’s job, Bauer says, is to persuade state government to adopt policies to keep manufacturing in Wisconsin healthy.

That makes job one keeping Gov. Scott Walker in the Statehouse and Republicans in control of the Legislature. Under Walker, Bauer says, “We accomplished eight years’ worth of our legislative agenda in one year.”

Next on the horizon: Working to achieve even more regulatory reform, lawsuit reform and tax reform for WMC’s 3,500 member companies.

Noting that despite last year’s reductions in corporate taxes, Wisconsin’s business taxes are still higher than those in Illinois, Bauer says, “We’re hoping to zero-out corporate taxes altogether.”

Those are fightin’ words to Democrats and to many public employees, who depend on tax money for their own salaries. They argue that companies aren’t taxed enough.
To Bauer, that belief shows ignorance of how capitalism and the free-enterprise system work.

“The protesters accuse us of destroying the middle class, but we’re all about the middle class,” he says. “We’re all about keeping and increasing the number of good-paying manufacturing jobs that support the middle class.

“Yes, there have been abuses in capitalism,” Bauer adds. “But tell me what other economic system has produced the opportunities that capitalism has.

“We have two coalitions in Wisconsin today: People who are pro-business versus government employees and environmentalists,” he says.

“We have differing visions of what creates opportunity,” Bauer says.

Take the proposed iron ore mine near Hurley in northern Wisconsin, for instance.
“We want that mine. Ashland and Iron counties want that mine. The opposition is from environmentalists in Madison, not people trying to live up north and support themselves. They want jobs. Shame on the people down here telling the people up there how to live!”

He does not deny that the mine will alter the landscape. “After remediation, the landscape will be different — but not necessarily worse.”

If the mine can operate in a safe and environmentally sound manner — and Bauer believes it can — it could revitalize the state’s mining industry.

“We’ve got copper, zinc, even gold,” he adds. “And mining jobs pay a lot better than tourism jobs.”

Bauer shrugs off criticism that, compared to business organizations in other states, WMC is too political.

“This is Wisconsin!” he says with a grin. “Everything IS political.”

That includes Bauer’s background. He majored in political science and history at the University of Wisconsin-Madison, and right out of college went to work for businessman  (and current U.S. Senate candidate) Mark Neumann, a Republican who was trying to unseat longtime U.S. Rep. Les Aspin. By 2002, Bauer had become vice president of government relations for the Wisconsin Bankers Association.  Harry Argue, longtime president of the bankers group, says Bauer may be “the smartest guy I ever met.”

Bauer left Wisconsin to move to Phoenix, Ariz., to head up the Arizona Bankers Association. He met his wife, Anne — coincidentally, also a Wisconsin native — in Arizona, and says they never expected to return to Wisconsin.

But in 2004, the Wisconsin Bankers Association lured him back with an offer to become its president. Last year, he was hired to head up the WMC, replacing Jim Haney, who retired.

He hadn’t even started work yet when left-wing and public employee protesters began picketing his home, much to Anne’s displeasure.

Ironically, she is a public employee, a special education teacher.

“We’ve had some interesting conversations” since Gov. Walker proposed forcing public employees to pay a portion of their health insurance and retirement costs, he admits with a wry smile. “Fortunately, she understands what a mess the state budget was in and why Act 10 was necessary. She was actually more upset by the protesters in front of our house than by the pay cut.”

He’s also used Anne as a sounding board for some of his ideas about educating the next generation of Wisconsin workers.

He believes public schools wrongly disparage manufacturing jobs. “Almost all K-12 schools in Wisconsin are college prep, but 70 percent of jobs don’t require a college degree,” he says. Students who are turned off by what they are forced to learn in school don’t develop the skills they need to succeed in the workforce, he says.

And without skilled workers, the state’s manufacturing industry will have a hard time holding its ground, he adds.

Bauer is bemused by the attitudes that manufacturers encounter at many of the state’s colleges and universities.

For example, in 2008, UW-Madison’s outgoing chancellor, John Wiley, said, “WMC routinely opposes most measures favored by labor unions and most measures aimed at improving the lot of entry-level and low-income workers who are essential to our economy. But this opposition is not a business or an economic position; it is a political position based on an era and an economy that no longer exist.”

Says Bauer: “Obviously, I wasn’t at WMC then. I also don’t know Wiley. I find his comment about manufacturing being passé [as the old economy] odd and familiar all at once. Despite the facts proving otherwise, Wiley’s view seems to be widely held by many in Madison.

“Manufacturing is part of our past, present and must be part of our future. It is our largest business sector and continues to be the bedrock of middle class jobs, many of them unionized. We sometimes refer to it as Wisconsin’s ‘super sector’ because it is so foundational to local economies. Manufacturing doesn’t just create jobs in factories. It also creates them in multiple other industries, like banking, health care, education, retail and government,” he says.

“It is shortsighted and ill-informed to dismiss it as a dead or dying industry.

“Contrary to what Wiley said, we have to make things in America. I am not a fan of the term ‘knowledge economy.’ I don’t know how that works. Who buys the knowledge and for what purpose?” he asks.

“To me, a better definition is an economy where cutting-edge research and innovation result in new products being manufactured in the U.S. by highly educated engineers and well-trained workers. That is a powerful formula for economic growth and jobs.

“In many ways, it is already here. Manufacturing in the U.S. is already ‘advanced,’ which means it requires a highly trained workforce. Simple manufacturing and assembling, which requires fewer skills, has largely already moved to places where labor is cheap,” Bauer says.

“That’s why addressing the skilled worker shortage and skills gap is so critical to protecting Wisconsin’s manufacturing base,” he says. “If Wisconsin can’t produce or attract highly trained workers to support advanced manufacturing, those employers will be force to go somewhere else.”

Sunny Schubert is a Monona freelance writer and a former editorial writer for the Wisconsin State Journal.

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