Playing Ketchup
By Bob Parks (08/09/04)
Last week I wrote a column addressing some issues surrounding the Democrat Convention in Boston. I, like many hundreds of others in the mainstream and web media, found lots to talk about.
However, the last section of that column provoked an unusual response. That section read as follows:
Depends On What “Special” Means
Kerry, taking a page out of the John McCain playbook, called President Bush a tool of “special interests”. Kerry accuses Bush of outsourcing our jobs to other countries. But how would or could a President Kerry deal with leaders of countries where Mrs. Kerry owned factories?
The Heinz Corporation owns 79 plants and 57 of them are located in countries outside of the United States. Remember that when Kerry talks about Bush shipping our jobs overseas.
Heinz’ factories are located in Taiwan, Ireland, France (no surprise), Portugal, Spain, Italy, Greece, Poland, Russia (imagine that…?), Egypt, Israel, The Netherlands, Belgium, Germany, Belgium, Italy, Canada, Venezuela, Costa Rica, South Africa, Zimbabwe, Australia, Singapore, New Zealand, Japan, the People's Republic of China (hmmm…), South Korea, Thailand, India, Indonesia, the Philippines, and Hong Kong.
These food products can be easily made here and shipped there. Quite frankly, I’d much rather my ketchup be made from tomatoes grown in America instead of Zimbabwe.
For any of you who despise Dick Cheney and the numerous times you cite his intervention and preferential treatment on behalf of Halliburton, I’m sure you feel the Kerrys will conduct themselves with the utmost in integrity, right?
History often has a way of repeating itself.
Remember Whitewater…?
Now while I admit to not having a research staff at my disposal, I did do as thorough a research as one man can do and the information I cited was uniform throughout the many sources I examined. So you can imagine my amazement when I received a forwarded email from one of my editors….
Dear Editor,
We would like to correct misrepresentations in Bob Parks' column on August 2.
First, in accordance with its corporate governance policies, H. J. Heinz Company is a publicly traded corporation with a diverse shareholder base of both individuals and institutions comprising Republicans, Democrats and Independents alike. Neither Mrs. Teresa Heinz Kerry nor Senator John Kerry nor any of the Heinz trusts or endowments - either individually or collectively - holds a significant percentage of shares of the H.J. Heinz Company. (Their current holdings are under 4 percent.) No Heinz family member is involved in the management or board of the H. J. Heinz Company. They have no involvement in the Heinz ketchup business or any of the company's other brands or products.
Second, 60% of the sales of the H.J. Heinz Company are outside the United States. The company accommodates those customers by providing facilities closer to those markets and maintains a number of overseas facilities that provide products for consumers in those markets. This allows Heinz to pack the freshest ingredients, tailor its recipes to local tastes and deliver the final products in a timely and efficient manner. In the United States, Heinz makes its flagship ketchup in factories in Fremont, Ohio; Muscatine, Iowa; and Stockton, California.
Sincerely,
Debora S. Foster
Vice President
Corporate Communications
H. J. Heinz Company
600 Grant Street
Pittsburgh, PA 15219
The letter included a phone number as well, but some of you can be quite passionate.
I’d like to believe I am a reasonably intelligent person and after a few days to dwell on this letter, I grew increasingly insulted and angry. Calling my words a “misrepresentation” is essentially calling me either dumb or a liar, especially when Ms. Foster probably only wrote the first line herself and pasted it onto an existing form letter. Suspiciously similar verbiage has been issued to other critics as well.
Like I said in my column, I do believe Teresa Heinz Kerry and her husband, should they be elected president, may face the same conflict of interest issues with the Heinz Corporation as those Dick Cheney is constantly being accused of with Halliburton.
The Kerry campaign website (www.johnkerry.com) says, “Corporate profits are soaring, the government keeps expanding, but the opportunities for our middle-class are shrinking. It's time to bring those opportunities back. John Kerry and John Edwards know that we're stronger when we create good-paying jobs here, not ship them overseas.”
On the campaign trail Kerry recently added, “If a company is torn between creating jobs here or overseas, we now have a tax code that tells you go overseas. And that makes no sense. And if I am president, it will end as soon as possible.”
But our current tax laws allow American firms to delay paying taxes on income earned by their foreign branches until the money comes back to the United States. If the money stays abroad, those companies avoid paying taxes all together. Kerry’s election plan would require businesses to pay tax on their foreign income immediately. However that new system only covers future profits, and is conveniently not retroactive.
Now while published reports say Kerry personally helped author tax legislation designed to punish companies that relocated overseas, he then pushed for a major loophole that would exempt Heinz from the same penalties.
According to Donald Luskin, Chief Investment Officer of Trend Macrolytics, "Kerry's economic proposals seem tuned to serve his wife's economic interests. His proposal last March to end tax breaks for U.S. corporations that do business overseas was designed with a loophole that would allow the H.J. Heinz company keep its overseas tax breaks and get a lower domestic tax rate at the same time."
The loophole will exist for companies located in a foreign country that make a product there but don’t ship that product back to the United States for sale. That company will pay no taxes. I don’t think Heinz or any other corporation that has overseas plants will argue with that code, but I fail to see how that will save domestic jobs, but that’s just me.
But back to our story….
Ms. Foster “wrote” in her letter that the Kerrys own less than four percent stock in Heinz. Now while that’s probably true, to assert that the amount is virtually insignificant and that they have no say in company policy is pure spin coming from a corporate communications pantsuit. As a person who believes in black and white without a whole lot of gray, let’s do some simple math, shall we?
Let’s round that “under 4 percent” to a hard four percent and let’s say the Heinz Corporation is only worth one billion dollars. Unless corporate math is different than that of us mere consumers, the Kerrys’ interest of four percent adds up to around $40 million. And that’s only taking into account that Heinz is worth only one billion dollars, which is a real low-ball figure.
Now if Joe Schmo wrote a letter to the Heinz Corporation, chances are pretty good that if he did get a response, it would most likely be a form letter. But if Joe owned at least $40 million in company stock, I’d be willing to bet Joe would receive a more personalized response in an expedited manner. To assert the “under 4 percent” essentially makes Teresa one of us is what I’d call a “misrepresentation.”
And as for the comments on making the product closer to where the people will buy it, is of course logical and good business. But John Kerry has been accusing President Bush of essentially encouraging the loss of jobs overseas when those very same corporate strategies, in some cases, mirror that of the Heinz Corporation. I was not attacking Heinz per se, but alluding to yet another example of Kerry hypocrisy.
I can understand the Heinz Corporation wanting to distance themselves from the ongoing chatterings of Teresa. But if she’s that much of a loose cannon now, one can only imagine what kind of commotion a First Lady of her crust would make on the world stage. Only an ostrich would believe that she would hide the Heinz Corporation card in her Rolodex for four years, especially since she loves the pretext that the rules don’t apply to her.
I know Ms. Foster is only doing her job and I don’t hold this against her personally. But I don’t mislead, except only in the eyes of those who disagree with me politically.
Unlike some on the left, I’m not going to use this as an opportunity to call for a boycott on Heinz products, because I really could care less. I’m not even going to tell them to “shove it.”
I already buy Hunt’s.
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