Wisconsin's $4.1 Billion Foxconn Boondoggle (theverge.com)

"A story from The Verge reports on Foxconn's substantially scaled-back plans for the heavily subsidized Wisconsin "Gigafactory," writes Slashdot reader kimanaw. Here's an excerpt from the report: The details of the deal were famously written on the back of a napkin when [Foxconn chairman Terry 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. [...] 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.

Shortly after the Wisconsin deal was signed, Walker was touting the Foxconn deal in campaign-style speeches across the state. But by October 2017, just a month after the legislature passed the Foxconn deal, a poll showed only 38 percent of the people in southeastern Wisconsin, where the plant would be located, thought the plant would be a net positive for the state. This was followed by March 2018 poll, which showed that 66 percent of people in the state believed their local businesses wouldn't benefit from the Foxconn deal, and only 25 percent thought it would be beneficial. This was dreadful news for Walker, who suddenly stopped talking about Foxconn. He didn't even mention the deal in a November 2017 speech announcing his run for re-election. It was also bad news for Foxconn, as every Democrat running for governor proceeded to condemn the deal. Both Walker and Foxconn now needed to sell this deal to the voters.

Comments

Uh huh ...

[fahrbot-bot]

... company insists it will eventually hit the $10 billion investment target ...

... and Duke Nukem Forever was eventually released too... Just sayin'.

They went off the rails

[Waffle Iron]

They completely lost sight of what made the USA an economic powerhouse in the first place: In the past, corporate welfare was always doled out to American companies.

Re:They went off the rails

[Anonymous Coward]

True but now this type of welfare is less about creating jobs than bleeding the budget so the perpetrators can say:
"Oh we have no money for your liberal spending programs and there's a deficit now so we need to Cut Cut Cut".
It's all part of the wealth transfer operation against the middle class perpetrated by the republicans.

Re:They went off the rails

[Anonymous Coward]

Every time. Every. Fucking. Time.

This happens in other countries as well, and it's infuriating how the taxpayers get the shaft on shit like this, from roadworks projects, to stadiums, to pie-in-the-sky promises of new buildings and factories that "just can't seem to get built" without massive amounts of taxpayer money which then gets used to line the pockets of the private interests and with almost no benefit to the people who actually paid for the thing to get built.

These fucking thieves and their puppet politician bagmen need to be held accountable for their crimes.

Some deals work, many don't

[crow]

There are two issues with subsidies like this. One is that most companies will look for loopholes and try to take advantage of the deal, doing only the bare minimum to get everything they can. The other is that the government usually doesn't structure the deal such that the payouts are tied to meeting promises.

I'm under the impression that Nevada's deal with Tesla is a case where both issues were handled correctly, because Tesla really wanted to do everything they promised, so they had no reason to try to wiggle out, and because the deal was well-structured and tied to jobs.

I expect in most cases the people writing the deal for the government just don't have enough experience to put all the right teeth in them. I know from my experience in my town's government, we have sometimes failed to correctly specify details in agreements that have come back to bite us.

Repeat after Me

[CohibaVancouver]

and the Republican governor first met: a $3 billion state subsidy in return

If you're a Republican, be sure to chant the mantra:

Corporate welfare: GOOD

Individual welfare: BAD

Bottom

[fluffernutter]

These bug tech companies only GO to a place that is willing to give up so much that it eats up any benefit for the citizen. That particular race to the bottom is already pretty much at the bottom.

Re: Paul Ryan

[reanjr]

The Foxconn deal was a deal with the state of Wisconsin. Ryan is a member of the United States Congress. Though he represents the people of Wisconsin, he does not have a say in how the state operates.

Wisconsin's population is about 5.7 million....

[Radical Moderate]

...22% of those are under 18, so that leaves about 4.5 million. Figure at least half a million of those are too old or disabled to pay taxes, so that's about 4 million taxpayers. A $4.1 billion subsidy means Walker took over $1000 from each taxpayer and handed it to Foxconn. No wonder he doesn't want to talk about it.

Re:Wisconsin

[Ol Olsoc]

Foxconn is nothing in comparison to the $100B boondoggle known as the high speed bullet train in California.

So are you saying that the FoxCon 4 billion is a really good thing that you support?

You whataboutism types don't realize that what you think is condemning the Liberal stuff that you hate is actually saying that it is good because you support the other side of your whatabout statements.

Awaiting your APK emulation.

Re:Apparently nothing was learned...

[dk20]

Plus if you do it amazon style with their "HQ2" proposal you can turn things around. Instead of you (amazon) shopping around, the states and cities will come to you with the varoius forms of coporate welfare.. you just get to select who wil give you the most.

If states really want to compete for jobs like this, we need federal laws to prevent one state from undermining its own people to "win" a "major HQ" which almost always employ far fewer people vs. the primise and the "investment" will also be a lot less.

Re: Paul Ryan

[Anonymous Coward]

he may not have 'signed the check' from the state but the damn thing is in his fucking district. you know damn well shithead ryan was involved, and enough so that he collected enough 'favors' to retire from the house.

This deal was never going to work

[rsilvergun]

and everyone knew it. There were klaxons going off day one. It was painfully obvious that Wisconsin was chosen because their gov't is bought off and hopelessly corrupt. It as a $4 billion dollar give away on a few hundred million in jobs. The other cities saw that and said "Hell No". Under Scott Walker though companies can get away with damn near anything.

There's one point you're missing here

[rsilvergun]

the GP's argument is that the money wasn't owed since taxes aren't really "owed" in the sense that you paid for something. Taxes are, to a lot of people, the gov't saying "mine!" to your money.

This is of course bullshit. Foxconn wants roads, and educated workforce, hospitals to treat injuries so that workforce can work, police and fire, water, even food is basically managed by our gov't (folks have no idea how deeply embedded in our food supply the gov't is, we don't leave that up to the markets and haven't since the 30s).

Better to say it this way: Foxconn wants to belong to the nicest and most exclusive club in the world: Civilization. And they don't want to pay their dues. They want you and me to pay them. Fuck Foxconn. I pay, so can they.

Re: Paul Ryan

[vlad30]

Hmm when you deal with foreign companies you should slap some of the same rules they apply in their countries try owning 100% of a company in many countries. Personally why not look to an American company and give them a subsidy after all isn't it being paid for by the American taxpayer for their benefit.

Re:$3 Billion for 13,000 Jobs?

[Actually, I do RTFA]

since theoretically the $100B in other spending is going into local businesses

Where did you get that Foxvcon's 10Billion investment is spent in Wisconsin? What if they but 100 MM in land and ship 9.9Billion in parts from China?

Re: Paul Ryan

[houghi]

Whores have ethics and morals.

My ex proves the opposite.
I assume you where talking about prostitutes.