Repatriating corporate capital: Rainbow Push: Medtronic merger should include U.S. infrastructure investment incentives

medtronicMinneapolis – Rainbow PUSH Coalition (RPC) members accompanied by the head of Minneapolis Branch NAACP yesterday (Jan. 6) participated in shareholder consideration of the merger of Medtronic and Covidien.

In a meeting Tuesday morning shareholders of Medtronic, a global medical technology company based in Minneapolis, voted to acquire an Irish-based firm, Covidien. Medtronic CEO Omar Ishrak said that the purpose of the merger is to free up capital to invest in medical technology in the United States.  The merger will also have the effect of reducing Medtronic’s U.S. tax burden and will result in relocation of the company’s legal headquarters to Ireland. The vote passed by more than 90 percent.

Medtronic operates in more than 140 countries. The company employs 49,000 people, including 5,800 scientists and engineers, pursuing research and innovation that has led to more than 28,000 patents.

When questioned by RPC executive director, attorney Janice L. Mathis, Ishrak responded that measures already were in place to assure that any U.S. employees who lost jobs as a result of the merger would receive company assistance in finding new work.  Ishrak also indicated that Medtronic expected to create 1,000 new health sector jobs in Minnesota over the next five years as a result of the merger.  

Earlier in the year, Rainbow PUSH president, the Rev. Jesse Jackson, Sr. wrote to Ishrak to request that Medtronic complete RPC’s Corporate Diversity Survey Questionnaire.  The survey covers employment, supplier diversity, board composition, philanthropy and recruitment, among other areas.  RPC is also requesting that Medtronic release its EEO-1 form, required by the U.S. Equal Employment Opportunity Commission.  Similar requests have resulted in public releases by more than 20 Silicon Valley firms, including Intel, Microsoft and Google, said Mathis.

She said Medtronic CFO, Gary Ellis, affirmed that diversity, both inside of Medtronic and in its Irish partner, was a priority across the board and agreed to engage in further talks with RPC to consider its suggestions for bolstering diversity in the new company.

The proposed talks began Tuesday afternoon, according to Fernando Vivanco, Medtronic’s senior director, Global Communications, who said a meeting between Rainbow Push representatives and Medtronic senior leaders resulted in “good communications” that likely would be the first of many around issues raised by Rainbow PUSH.

The Rev. Jerry McAfee, NAACP president and pastor, New Salem Missionary Baptist Church in north Minneapolis attended the Medtronic meeting, along with Mathis.  

“We need 6,200 jobs in Minneapolis for lower income families to close the poverty gap.  Medtronic could contribute to that equation.  We are glad to see Rainbow PUSH in Minneapolis and will continue to work closely with them to achieve a measure of economic stability in underserved communities,” said McAfee.

Montgomery, Ala. businessman, Dr. Alfred Seawright, also accompanied Mathis as part of the Rainbow PUSH delegation.  Seawright is CEO and president of Medical Place, a veteran-owned service-oriented small business that distributes medical, laboratory, respiratory, scientific, and telemedicine equipment and supplies to hospitals nationwide.

“We are here because Rainbow PUSH is reaching out to minority businesses making sure they get a chance to do business with big companies like Medtronic, a company with more than $17 billion in annual revenues. Black America already has a relationship with Medtronic as consumers. When you’re sick or hospitalized, nine times out of 10, you will be utilizing products created and manufactured by Medtronic,” said Seawright. “We can build on that for the benefit of the company and for the benefit of our community in terms of jobs and economic development. We are looking to be considered as strategic partners and vendors for companies like Medtronic that have embraced diversity as part of their business and growth strategy.”

For many months, Jackson, founder of Rainbow PUSH Coalition, has urged U.S. lawmakers and corporate executives to find common ground to bring capital back from overseas markets to the U.S.  Jackson’s proposal specifically ties tax rate reductions as an incentive to investments in U.S. crumbling urban infrastructure. This vote by a major U.S. firm to call Ireland home should be a wake-up call to policy makers to take Jackson’s infrastructure investment proposals seriously, said Mathis.

She said Medtronic’s merger with Irish firm is proof that the U.S. needs plans to repatriate corporate capital. She further went on to say that in exchange for investment in U.S. infrastructure, global firms should receive tax consideration.

McAfee said RPC’s presence at the Medtronic shareholders’ meeting may signal an expanded presence for the organization in Minnesota. Mathis confirmed that while there are RPC members in the market, it may be time to create an active affiliate and local office.

McAfee said he was impressed that Medtronic executives acknowledged the persistent disparities in wealth, health and education despite the state’s stellar reputation as a good place to do business and a good place to live. He said he hopes some of the proposed workforce growth promised by Medtronic could be targeted against the high unemployment in north Minneapolis.

“What if Medtronic would build a plant in north Minneapolis? What if 500 of the new jobs were made available in north Minneapolis,” said McAfee.

McAfee said Rainbow PUSH’s economic and business development skill set and relationship building capacity with Twin Cities based multinational corporations could lead to collaborative innovation and covenants that eliminate the job gap for north Minneapolis.

“What if 30 companies each committed to 200 jobs for north Minneapolis residents? That would eliminate the 6,200 job deficit that is crippling our community right now,” said McAfee.

January 7, 2015
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