Wisconsin's $4.1 billion Foxconn boondoggle

[catbyte]

Gov. Scott Walker promised billions to get a Foxconn factory, but now he’s running away from it

By Bruce Murphy Oct 29, 2018, 11:50am EDT

t was a veritable lovefest in Milwaukee in July 2017 when Republican Gov. Scott Walker and Foxconn chairman Terry Gou announced their plan to create a heavily subsidized manufacturing plant in southeastern Wisconsin. Walker gushed that Gou, who founded his Taiwan-based company in 1974, was “one of the most remarkable business leaders in the world.” Gou returned the favor by saying, “I’ve never seen this type of governor or leader yet in this world.” Effusive, yet ambiguous.

The details of the deal were famously written on the back of a napkin when Gou and the Republican governor first met: a $3 billion state subsidy in return for Foxconn’s $10 billion investment in a Generation 10.5 LCD manufacturing plant that would create 13,000 jobs.

snip.........

But what seemed so simple on a napkin has turned out to be far more complicated and messy in real life. As the size of the subsidy has steadily increased to a jaw-dropping $4.1 billion, Foxconn has repeatedly changed what it plans to do, raising doubts about the number of jobs it will create. Instead of the promised Generation 10.5 plant, Foxconn now says it will build a much smaller Gen 6 plant, which would require one-third of the promised investment, although the company insists it will eventually hit the $10 billion investment target. And instead of a factory of workers building panels for 75-inch TVs, Foxconn executives now say the goal is to build “ecosystem” of buzzwords called “AI 8K+5G” with most of the manufacturing done by robots.

Polls now show most Wisconsin voters don’t believe the subsidy will pay off for taxpayers, and Walker didn’t even mention the deal in a November 2017 speech announcing his run for re-election. He now trails in that re-election bid against a less-than-electric Democratic candidate, the bland state superintendent of public instruction Tony Evers.

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https://www.theverge.com/2018/10/29/18027032/foxconn-wisconsin-plant-jobs-deal-subsidy-governor-scott-walker

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Whoopsie! Very interesting article.

[Ellipsis]

1. In truth - it's a fickle market and big pieces of glass like that have shitty yields.

For them to change lanes... I can see.

THE strategy was jobs. With this other market. No jobs per say.

Boondoggle indeed.

[Midnightwalk]

2. Corporate Welfare

4.1B / 13K is 315,000 per job. I realize there probably are construction jobs at first.

Numbers seem to not work especially since tax revenues from those jobs is a fraction of their pay. Did I screw up the arithmetic? Is there kind of a standard cost to government per job to compare against for subsidies like this?

Actually I googled it and found this report

[link:https://www.cnbc.com/2017/07/11/states-pay-as-much-as-2-million-per-job-to-attract-tech-companies.html|]

As horrible as this deal sounds it's better than others. End corporate welfare.

[sarcasmo]

3. Walker was Conned by FoxConn. Pissed off Wisconsin resident.

[dalton99a]

4. There was ample warning - History of Foxconn promises:

https://www.washingtonpost.com/business/economy/how-foxconns-broken-pledges-in-pennsylvania-cast-doubt-on-trumps-jobs-plan/2017/03/03/0189f3de-ee3a-11e6-9973-c5efb7ccfb0d_story.html

How Foxconn’s broken pledges in Pennsylvania cast doubt on Trump’s jobs plan
By Todd C. Frankel
March 3, 2017

... In 2013, Foxconn’s chairman sent a jolt through this state capital when he said his company — best known for making Apple iPhones in China — would invest $30 million and hire 500 workers for a new high-tech factory in central Pennsylvania.

Locals were giddy. Foxconn had a small office here, but this seemed like the start of an entire new industry. Pennsylvania’s governor boasted about the deal. The Brookings Institution think tank hailed Foxconn’s decision as a sign of U.S. manufacturing’s strength.

But the factory was never built. The jobs never came. “It just seemed to fade to black” after the announcement, recalled a local official. It was the start of a mystery, created by a chief executive known to promise projects all over the world that never quite pan out. Yet few people seem to notice. Foxconn and others continue to get credit for deals that never take place. In December, Pennsylvania’s economic development staff was still touting the $30 million factory that never was. ...

In 2014, as the Pennsylvania deal was quietly dying, Gou teased the opening of a LCD display factory in the states. His company talked with officials in Colorado and Arizona. Nothing happened.

That same year, the company signed a letter of intent to invest up to $1 billion in Indonesia. That investment still has not occurred.

Foxconn said it would invest $5 billion over five years in India as part of an ambitious expansion in 2014. The deal would create up to 50,000 jobs, Gou said. But Foxconn’s investment in India has amounted to only a small fraction of what it originally promised.

Similar results were seen in Vietnam, where Foxconn committed to a $5 billion investment in 2007, and in Brazil, where Foxconn spoke of a $10 billion plan in 2011. The company made its first major foray in Vietnam only last year. In Brazil, Foxconn has an iPhone factory, but its investment has fallen far short of expectations.

“There’s a pattern here,” said Moel, the analyst.