-- Correction at bottom --
Minnesota's eighth-largest company is relocating overseas. The New York Times views the move through the lens of federal tax policy and the taxes Medtronic can avoid paying by leaving America, while the company itself cites more benevolent reasons, like access to European markets.
In any event, the news doesn't sound auspicious for our state economy, right? But in response, DFL Gov. Mark Dayton is donning rose-colored glasses.
"During my conversation with [Medtronic's Chairman and CEO, Omar] Ishrak and in further discussions [last weekend] between senior state and Medtronic officials, we were assured that the company intends to keep its operational headquarters here in Minnesota and that no jobs will be lost here due to this transaction," Dayton wrote in a statement. "Company officials also told us that Medtronic intends to create over 1,000 new medical technology-related jobs in Minnesota during the next five years, in corporate management, research and development, engineering, and manufacturing. That is tremendous news for Minnesota and evidences the company's continued commitment to our state."
On the other side of the spectrum, one of the Republicans running to take Dayton's job, Marty Seifert, blasted Dayton and Sen. Al Franken for allegedly waging a war on jobs, and said, "Rather than inventing things in their parent's garage, like the founders of Medtronic did, our young people are now more likely to live in their parent's garage than become innovators."
As you might expect, however, when we contacted their offices for comment last week, Franken and Sen. Amy Klobuchar struck a chord similar to Dayton's, though with a slight tone of dissonance mixed in.
"I recently spoke with Omar Ishrak, the CEO of Medtronic, who told me that this proposed deal could bring as many as a thousand jobs to Minnesota and increase investment in our state, which would be great," Franken wrote in a statement. "That said, deals that result in companies reincorporating abroad often mean that they can shelter profits overseas, costing taxpayers billions of dollars -- which I find troubling. This needs careful scrutiny, and I'll continue to look very closely at the specifics of the deal."
Compare that with the similar sentiments Klobuchar expressed to us:
I have spoken with Medtronic's CEO and my primary focus is making sure our jobs stay in the U.S., especially in Minnesota. Medtronic has told me that they intend to add jobs in the state as a result of this proposed merger and invest in continued growth, research and technology in Minnesota. However, I also believe the proposed merger highlights the serious need for comprehensive tax reform. We need to simplify our tax system to ensure companies are investing their money here at home.That Minnesota's Democratic leaders would hang together isn't surprising. Along the same lines, the endorsed Republican running to take Franken's job, former investment bank CEO Mike McFadden, pinned the blame in a spot similar to Seifert.
(For more, click to page two.)
"Al Franken's addiction to high taxes may be good for his liberal friends in Hollywood and New York City, but it's hurting Minnesota's economy," McFadden wrote in a statement. "It's very troubling that the policies of President Obama and Sen. Franken encourage companies like Medtronic to outsource their headquarters to another country. Over 1,000 Minnesotans have lost their jobs in the medical device industry thanks in part to the Obama-Franken war on jobs, which includes higher taxes on made-in-Minnesota medical devices. Now more than ever, we need to radically reform our tax code to make it simpler and fairer for everyone."
From a local standpoint, it's never great when one of Minnesota's leading companies relocates abroad, but at some point you have to expect for-profit businesses to pay taxes, don't you? The Medtronic news and the political responses to it illustrates one way in which drawing that fine line will become a key element of the economic debate this campaign season.
:::: Correction :::: An earlier version of this post incorrectly attributed Klobuchar's statement to Franken. We apologize for the error.