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My Turn: Don't bite the hand that feeds us

Posted: August 10, 2014 - 12:07am

Alaskans have a very important vote on Aug. 19. Businesses small and large will be affected. Jobs and the Alaskan economy will be at stake.

There has been much discussion about the referendum to repeal Senate Bill 21. We want to share the positive effects SB21 is having on our business, one based here in Alaska.

Cummins Northwest has been in Alaska for 50 years, doing nearly $20 million in annual business. Our 50 employees in Alaska are committed to making the communities in our state stronger. Cummins Northwest wants to remain in Alaska. We want to help employ more Alaskans with high quality, good-paying jobs.

This referendum is really about whether Alaska wants to continue supporting and attracting many other businesses like ours that put people to work and contribute to the economic and social vibrancy of our state.

Since SB21 went into effect this year, our 2014 units, parts and service sales are up 22 percent. The same is true for our many industrial and automotive partners. We see great value in Senate Bill 21. The impact of a more favorable, competitive and predictable tax structure has resulted in the immediate announcement of investment of North Slope oil producers, oil field suppliers and contractors.

Cummins Northwest supports more than 250 customers, half of which directly support the oil and gas industry and the other half supports indirect markets. We’ve been hearing a great deal of concern from our customers on Ballot Measure 1. The potential repeal of SB21 has our business partners stymied and orders have been placed on hold due to the unpredictability.

Opponents say that Senate Bill 21 was a handout to the oil and gas business. We see the opposite. Cummins Northwest views the passage of SB21 as a helping hand to all Alaskans.

Repealing SB21 is biting the hand that feeds us all – each and every one of us. The potential of repeal has given pause to Cummins and those who have made plans for expansion and long-term growth.

Prior to SB21, oil production was at its lowest since 1977 and the oil field support companies were leaving Alaska to fuel other states’ economies. A “no” vote on Ballot Measure 1 is a vote for the future of Alaska. SB21 is working. The oil production decline has stopped. Keep SB21 in place and allow it to work as designed.

For Alaska, we must view SB21 for what it is – a catalyst for investment and the lifeblood of our state and our business. We are fortunate to live in a state with tremendous natural beauty and truly great, hard-working people. Let’s work toward making Alaska even better by voting “no” on Ballot Measure 1 on Aug. 19.

• Tim Kelly is general manager in Alaska for Cummins Northwest.

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Art Petersen
Art Petersen 08/10/14 - 11:39 am
Wait a minute!

According to the Alaska Department of Labor, from 1999 through 2012, the oil and gas workforce steadily increased (numbers for 2013 are not yet available). This steady increase had nothing to do with SB21. So was not Cummins Northwest nourished then by the hand that feeds it? ... Deception, deception, and more deception. The hand that is SB21 is in the pocket of every Alaskan and every Alaska community, stealing their constitutionally mandated revenue. But it's not the hand of the oil industry that deserves biting. It's the hand of SB21 that needs to be nipped and driven off so that ACES can be adjusted equitably. Voting Yes on Ballot Measure 1 moves toward that equity and a long-term benefit for all sides.

Karl Ashenbrenner
Karl Ashenbrenner 08/10/14 - 10:04 am
Well Art

apparently facts do not matter...perception is all that matters to the pro sb21 crowd.

Haily George
Haily George 08/10/14 - 11:47 am
Cummins Northwest LLC is

Cummins Northwest LLC is Cummins Inc. This is a huge multinational corporation. They serve their shareholders first, not Alaskans. And I bet they end up paying very little in taxes.
Alaskans need this revenue. Hell lots of Alaskans don't even have health care.
Alaska is not a cash cow for multinational corporations!

Alaskans need to realize that these oil companies want a foothold in Alaska, they are not about to go anywhere. Also, this resource belongs to Alaskans and these multinational corporations need to start paying their fair share in taxes. These companies are NOT hurting.

We need a NEW governor for Alaskans. Kick out this oil lobbyist from California.

Cummins Inc. (NYSE: CMI) today reported results for the fourth quarter and full year 2013.

Fourth quarter revenue of $4.6 billion increased 7 percent from the same quarter in 2012. The increase year-over-year was driven by higher revenues in North America, China and Brazil partially offset by weaker sales in Mexico, India and Australia.

"The potential of repeal has given pause to Cummins and those who have made plans for expansion and long-term growth"

Taking pause is a good thing! Unsustainable growth and depleting a resource isn't.

Wayne Coogan
Wayne Coogan 08/10/14 - 12:30 pm
Economics is the pursuit of truth.

It appears that Cummins NW, like most dealers, is nothing more than an independent franchisee for a large-cap manufacturer. If Cummins NW does not sell machinery in Alaska then another Cummins dealer will sell it in North Dakota or Texas. The manufacturer doesn't care so much which of its dealers makes a sale but rather what percent of total market share it takes from competing manufacturers. Total volume of machinery sold is related to total volume of oil produced, which, in turn, is related to total oil consumed; none of which depend on Alaska participating in the market. The fact is, Alaska must now deal with the reality that other states are now out-selling it in the petroleum sector. A fundamental fact of economics is that, like gold, oil only has value after it is extracted from the ground. Owning oil in the ground does not enrich Alaska. Only selling in the competitive market does that.

James Coleman
James Coleman 08/10/14 - 03:46 pm
Thanks Wayne

Thanks Wayne for the enlightenment. Too many folks on these posts have never been in the cutthroat business world. They have a very Marxist view of the industrial world. Look at the world right now, utter turmoil, yet oil prices remain stable. Alaska needs to stay in the game, you cannot let a product sit and gather dust on the shelf. If you do, you're out of business.

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