Huntington Ingalls Industries, the largest military shipbuilder in the U.S., which has a large presence in the Hampton Roads area, has given bonuses to 40,000 workers in shipyards across America and boosted “generational” capital investment by 20 percent, all due to the federal tax overhaul launched in December of last year. The industry giant just one of hundreds upon hundreds more examples of companies that are giving back to their employees following the signing of the Tax Cuts And Jobs Act by President Donald Trump.
“When tax reform came around, we knew we wanted to reinvest in our business,” explained Bill Ermatinger, executive vice president and chief human resources officer at Huntington Ingalls, via a press release from the National Association of Manufacturers. “We put it on a whiteboard to see who our stakeholders were, and we came up with four: employees, customer (sic), communities and shareholder (sic).”
The first measure on the agenda was to reward their tens of thousands of employees with immediate cash bonuses.
“Every single employee received $500,” Ermatinger said. “That’s a lot of money. We got hugely positive feedback from our employees.”
In an ode to Reaganomics, the executive vice president said, “One of our hourly employees at our Pascagoula, Mississippi, shipyard said, ‘I’ve been hearing about ‘trickle-down economics’ for years. And finally, something trickled down!'”
The move by Huntington Ingalls is precisely what should happen when massive tax overhauls are initiated, allowing businesses – big and small – keep more of the money they earn.
The shipbuilder also made a significant incremental contribution to their pension fund, to the tune of $200 million, to ensure that every employees’ future is taken care of.
Huntington Ingalls is forwarding what they call a “generational capital infusement” in their facilities. Ermatinger explained, “We invest $100 million in workforce development and $40 million in educational reimbursement each year so we can invest in our employees.”
Before December of last year, when the corporate tax brackets were still sitting at a lofty 35 percent, the company planned to increase capital spending by $1.5 billion by 2020, according to the news release. However, they have increased that to $1.8 billion, meaning more jobs will be created.
Moreover, it also aids the American taxpayers, because the savings will be passed down the economic totem pole to one of Huntington Ingalls’ biggest clients: the U.S. Navy, which has ordered hundreds of new ships to be built following Trump’s promise to rebuild the nation’s sea-faring military presence.
Though, not all the new investment will go straight to employees or building up company infrastructure. Huntington Ingalls also plans to dramatically increase the amount of money they spend in their communities, creating a corporate “double bottom line.” Due to tax reform, they have tripled their corporate giving.
“We decided we needed to make an investment in the communities we live in,” said Ermatinger. “Even for the people who don’t work for us.”
“Whether it be United Way, the Boys and Girls Club, the food bank, the Red Cross—you name it…If Huntington Ingalls is in the community, they saw a benefit,” he added.
As the national unemployment rate falls to its lowest level in half a century, Washington is already working on a second round of tax cuts. Most notably, the middle class tax cuts may become permanent, rather than having a sunset date in 2024. The news also comes as the Atlanta Federal Reserve predicts five percent GDP growth in the third financial quarter.
These measures will ensure that Huntington Ingalls and countless other businesses across the U.S. remain strong and continue to give back to their employees.
“I’m always asked,” Ermatinger said: “‘Are you going to make these kind of huge investments every year?’ And my answer is, ‘we don’t know what the future holds, but we already have made these commitments that far exceed HII’s tax-reform benefits beyond one year.’”
Unequivocally, Ermatinger added, “I can assure you: without tax reform, most of these things would not have been possible.”