The mega-merger announced last week between Johnson Controls Inc. and Tyco has gotten the attention of presidential candidate Hillary Clinton.
Speaking at a town hall event in New Hampshire that was televised on CNN, former Secretary of State Clinton said, “I think we need to go after a company like Johnson Controls that is trying to avoid paying taxes after all of us bailed it out by pretending to sell itself in a so-called inversion in Europe. It's a perversion. It should be stopped.”
The $20 billion tax inversion merger is taking heat from the political arena because, according to the New York Times, the deal will reportedly enable JCI to avoid paying $150 million in annual taxes by relocating its headquarters to Cork, Ireland, vs. its current base in Milwaukee, Wis.
Former and now disgraced CEO of Tyco Dennis Kozlowski told CE Pro from his jail cell back in 2011 that buying ADT was “by far the best deal we ever did” as head of Tyco because at the time, it enabled Tyco to move its headquarters to Bermuda, which is where ADT was headquartered. Since then, Tyco has moved its headquarters to Switzerland and then Ireland.
“We got all the advantages of being a Bermuda company without having to move the company there. We were simply acquired by a Bermudan company and so we also missed the political fallout [that would have come from moving a company offshore],” said Kozlowski, who is now out of prison.
Clinton’s Democratic presidential rival Sen. Bernie Sanders of Vermont has also blasted the JCI move. He issued a statement Jan. 25 calling it “a disaster for American taxpayers.”
Said Sanders: “These corporate inversions must stop. My message to these corporate deserters is simple: You can’t be an American company only when you want corporate welfare from American taxpayers or you want lucrative contracts from the federal government. If you want the advantages of being an American company, then you can’t run away from America to avoid paying taxes.”
Sanders has a bill aimed at preventing American companies from reducing their U.S. tax burden by shifting their tax headquarters overseas.
Clinton also has released a plan with the same goal.
If you enjoyed this article and want to receive more valuable industry content like this, click here to sign up for our digital newsletters!
