Tyson Foods recently announced it is shifting production from its Ponca City processed meat plant to three plants outside the state. Production will be moved to plants in Buffalo, N.Y., Cherokee, Iowa, and Houston. A total of 580 local workers will be cut because of the closure.
The announcement comes on top of Conoco Phillips announcing in February it will relocate 750 non-refinery positions out of Ponca City within two years. That’s a major hit for a city with a population of just more than 25,000.
At first glance, it makes absolutely no sense for Tyson and Conoco Phillips to move jobs out of Oklahoma. Our state is more centrally located than any of the three locations Tyson is moving to. Oklahoma has a better climate and pays less hourly wages than all three locations. So what predicated these moves? It must be something not mentioned in the “official” press release.
One impediment businesses face in Oklahoma is the state’s antiquated workers’ compensation system. Oklahoma still uses the court system to settle worker comp disputes, which creates high premiums for employers and reduced payments to injured workers. Reforming workers’ comp would be a win-win for both the injured worker and the employer, but this issue has been debated and discussed for years with no change. It appears Oklahoma is firmly committed to the trial lawyer lobby instead of industry, jobs and prosperity.
Another impediment to business is Oklahoma’s tort system, but the Legislature is working to change that. House Bill 1603, authored by Rep. Dan Sullivan, R-Tulsa, passed the state House in early March by a margin of 61-39. It now goes to the Senate for consideration. It is expected to pass the upper chamber, but it remains unclear if Gov. Henry will sign the bill. The bill would affect how suits are treated in cases from personal injury to malpractice. The bill also would cap non-economic damages (generally for pain and suffering) at $300,000. It would limit punitive damages at $2 million if intentional or gross negligence were found.
The bill would also cap attorney fees in class-action lawsuits using the “Lodestar” formula with a multiplier maximum of three. Lodestar is the amount gained by multiplying the hours spent by a lawyer by the hourly billing rate to calculate an award of attorney’s fees. In tort, just like workers’ comp, trial attorneys siphon off a large percentage of the awards.
Sullivan’s bill is basically the same bill Henry vetoed two years ago, and from all indications he will likely veto it again.
Real leadership requires one to be willing to tackle hard issues. True leadership is influence exuding from character. If you don’t have any influence over people, they will not follow you. Leaders have to learn how to develop their influence and use that influence for the common good. Thus far in his two terms, Henry has done little to exhibit he has the type of leadership that will address workers comp and tort.
Former Secretary of State Colin Powell said, “Capital is a coward; money flees uncertainty and corruption.”
Unfortunately, Oklahoma has both, and until we address workers’ comp and tort reform, our economic future will have the chicken crossing the road.
Fair is chairman of the 4th District of the Oklahoma Republican Party. His blog is stevefair.blogspot.com.