Saturday, May 25, 2024

Baldwin Introduces Bill to Crack Down on Mergers that Result in Higher Prices and Fewer American Jobs


Baldwin Introduces Bill to Crack Down on Mergers that Result in Higher Prices and Fewer American Jobs

Legislation comes after unscrutinized Energizer merger led to higher battery prices for Americans and 600 layoffs in Portage and Fennimore

WASHINGTON, D.C. – Today, U.S. Senator Tammy Baldwin (D-WI) introduced new legislation to protect Americans from layoffs and price hikes resulting from corporate mergers that significantly reduce competition, close American facilities, and outsource jobs. The Stopping Threats to Our Prices from (STOP) Bad Mergers Act comes after the Federal Trade Commission (FTC) approved the 2018 purchase of Wisconsin-based Rayovac by Energizer, which resulted in severely reduced competition in the battery marketplace, higher prices for consumers, and hundreds of layoffs for Wisconsin workers.

“Too often when big companies consolidate, hardworking Americans pay the price. The Federal Trade Commission is supposed to protect Americans from mergers that reduce competition and lay off workers, but as we’ve seen in Wisconsin, that is not always the case,” said Senator Baldwin. “I’m introducing legislation that will crack down on companies buying up their competition, sending jobs overseas, and jacking up prices because Wisconsin workers and families deserve better. Our bill ensures that the people who provide the company value, the workers, have a seat at the table when companies are considering these mergers.”

In 2018, Energizer purchased Wisconsin-based battery company Rayovac. President Trump’s FTC approved the merger with unusual speed, even though the deal was expected to give Energizer 40 percent of the U.S. battery market, 60 percent of the world hearing aid battery market, and 85 percent of the total battery market. The resulting battery duopoly in the U.S. led to significant price increases for consumers.

At the time of the merger, Rayovac operated two battery manufacturing facilities in the state: one in Portage and one in Fennimore. These facilities provided over 600 Wisconsin workers good union wages for decades because both manufacturing plants were represented by the International Brotherhood of Teamsters. But in 2023, Energizer announced it would be closing the two former Rayovac facilities in Wisconsin and moving the work to foreign countries, or to a non-union facility in North Carolina.

Senator Baldwin criticized the Trump-era decision and raised concerns about the planned closures in a hearing with Teamsters’ President Sean O’Brien shortly after the announcement. Last year, she demanded answers from the FTC on why they allowed the merger to go through with such little scrutiny and called on the commission to investigate and conduct a retrospective analysis.

Specifically, the STOP Bad Mergers Act:

  • Requires the FTC to continuously monitor previous mergers to determine if they have reduced competition, increased prices, cut wages, eliminated jobs, closed facilities, or outsourced to foreign countries. If the FTC determines a merger now violates antitrust laws, it retains the authority to take action to remedy the situation, including by requiring divestitures and breakups;
  • Enhances worker input of merger review, ensuring that labor organizations receive notification of merger filings and creates opportunities for labor organizations to submit documents in favor or opposed to a proposed filing;
  • Requires more information be provided to the FTC and Department of Justice to ensure they can properly evaluate the full effects of the merger on workers; and,
  • Requires Government Accountability Office studies on consolidation in the manufacturing sector and the effect of worker bargaining power in labor markets.

"The Teamsters will fight any merger that threatens jobs or weakens working conditions," said Teamsters General President Sean M. O'Brien. "Workers need to be a top priority in all government reviews of harmful corporate mega-mergers. The STOP Bad Mergers Act will make sure this happens and that greedy corporations are held accountable. Thanks to Sen. Baldwin's leadership, this legislation will put the needs of working people front and center."

"Senator Baldwin has always been a champion on behalf of the hardworking men and women of Wisconsin. Now, by authoring and introducing the STOP Bad Mergers Act, she has set the standard for leadership even higher,” said Larry Wedan, Secretary-Treasurer and Principal Officer of Teamsters Local 695. “For decades, Wisconsin communities have been devastated by harmful mega-mergers, as multinational corporations have gobbled up so many of the homegrown companies that once provided good-paying union jobs across our state, without much scrutiny from enforcers or regulators. Thanks to the STOP Bad Mergers Act, unions like ours and the working people we represent will be more empowered to challenge these kinds of reckless actions and engage with antitrust enforcers to stop bad deals in their tracks."

“When corporate mergers result in plant closures, offshoring of jobs, and sweeping layoffs, the impacts to working people are disastrous. Labor impacts are too often a blind spot in the review of corporate mergers, leaving workers to fend for themselves,” said Lee Hepner, Legal Counsel at the American Economic Liberties Project. “Senator Baldwin’s bill gives working people a seat at the table, and will help address mergers that harm workers, even if such harms become clear after a merger has been approved."

“The Open Markets Institute applauds Senator Baldwin for seeking to protect workers from corporate mergers. Her STOP Bad Mergers Act would help identify mergers and acquisitions that have harmed labor and empower working people and their unions to participate in the merger review process and to share their industry and market knowledge with the Department of Justice and Federal Trade Commission,” said Sandeep Vaheesan, Legal Director at Open Markets Institute.

A one-pager on this legislation is available here. Full text of this legislation is available here.