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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.
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.
... company insists it will eventually hit the $10 billion investment target ...
It must have been something you assimilated. . . .
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.
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.
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
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.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
...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.
Never let a lack of data get in the way of a good rant.
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.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
I guess the sun ain't gonna shine any more for him.
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.
Worse, neither politicians, journalists nor many public servants can do arithmetic. That is about $200,000 subsidy per job! There are not many small businesses that could not create jobs for a fraction of that!
Sorry but you don't seem to understand the difference between politicians and whores.
Whores have ethics and morals.
Paul Ryan was all over this deal when it looked good.
If it wasn't falling apart, he would be taking credit.
For example -
Paul Ryan Lauds Foxconn Decision
https://paulryan.house.gov/news/documentsingle.aspx?DocumentID=398716
Paul Ryan Praises Foxconn Deal During Wisconsin Stop
https://www.wpr.org/paul-ryan-praises-foxconn-deal-during-wisconsin-stop
Paul Ryan: Foxconn deal is a game changer
https://www.cnn.com/videos/politics/2017/08/22/paul-ryan-town-hall-wisconsin-foxconn-deal-sot.cnn/video/playlists/paul-ryan-town-hall/
Paul Ryan calls eminent domain takeovers wrong, but won't help homeowners in Foxconn case
https://www.jsonline.com/story/money/business/2018/03/26/paul-ryan-decries-eminent-domain-seizing-private-property-economic-development-not-foxconn-homeowner/454233002/
Congressman Paul Ryan Breaks Ground at Foxconn Development
https://paulryan.house.gov/news/documentsingle.aspx?DocumentID=398808
Even Trump was giving it his stamp of approval.
From Wikipedia -
Foxconn and President Donald Trump announced at the White House on July 26, 2017 that Foxconn will build a US$10 billion flat screen TV manufacturing plant in southeastern Wisconsin. The Foxconn deal, promising 13,000 high paying jobs, is the largest corporate attraction deal in U.S. history, in terms of pure number of jobs. Foxconn is expected to contribute $51.5 billion to Wisconsin's GDP over the next 15 years, which is $3.4 billion dollars annually. However, the deal is being criticized for the $3 billion in tax-payer funded incentives given to Foxconn, though every $1 in state incentives is estimated to generate a return of $18 in additional state GDP.
Foxconn will also be exempt from an environmental impact statement, water quality certification and permits for some activities on or near waterways, but must comply with air, solid waste and hazardous waste standards. Given water concerns, Foxconn is spending $30 million on zero liquid discharge technology, nearly eliminating any industrial waste water discharge. Foxconn is also required to replace wetlands at a higher ratio than other companies; Foxconn must restore 2 acres of wetland for every 1 acre disturbed instead of the ratio of 1.2 to 1 for other companies.
As of October 4, 2017, Foxconn agreed to locate their plant at Mount Pleasant, Wisconsin, and broke ground for the plant June 28, 2018. President Trump was in attendance to promote American manufacturing.
we were the only country with a functioning manufacturing base after WWII and the cold war meant companies were scared that if they invested overseas their assets would get seized by the big bad communists. Nixon showed everyone that was bullshit, the middle east gave us a way to keep our endless war machine going and that meant it was open season on offshoring and outsourcing.
You need manufacturing to have a strong economy because you need lots of workers all working together in the same place with the same interests. In other words, Unions. What made the US middle class grow was Unions fought (and died) to pry money out of the hands of the working class. You can't do that at a WalMart, there's just not enough of a concentration. Also, the ruling class got this Union busting down pat.
The one thing that did _not_ make the US a powerhouse is corporate welfare. We had all that during the Robber Baron era and Gilded Age in spades. There was money, but it all belonged to our aristocracy.
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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.
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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.
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Seriously, what are you on about? The Unions "targeted" the factory owners demanding higher wages for the workers.
The rich didn't move money anywhere. There was no money, we blew it the fuck up. It took the world decades to recover. In the meantime if anything was getting built it was getting built in America. By American workers.
And that last comment? Now you're just trolling. I mean, couldn't you just end your post with "Freedom is Slavery" or something?
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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.
Your'e all thinking it, I just said it for you
My ex proves the opposite.
I assume you where talking about prostitutes.
Don't fight for your country, if your country does not fight for you.
You need manufacturing to have a strong economy because you need lots of workers all working together in the same place with the same interests. In other words, Unions. What made the US middle class grow was Unions fought (and died) to pry money out of the hands of the working class. You can't do that at a WalMart, there's just not enough of a concentration. Also, the ruling class got this Union busting down pat.
You have the story wrong. The US HAS manufacturing. It never left despite what you might hear from the uninformed. The US manufacturing sector is over $3 TRILLION annually which puts us neck and neck with China for the largest manufacturing sector in the world. By itself the US manufacturing sector would be one the fifth largest economy in the world - larger than the UK and just behind Germany.
What has changed since WWII is our cost of labor and the rest of the world rebuilt. US labor today is among the most expensive in the world. As a result US manufacturing HAS to focus on capital intensive products instead of labor intensive ones. It is literally impossible for US companies to compete on labor prices. 70 years ago US labor costs were a lot closer to the global mean AND the rest of the world was recovering from WWII. Now China has a LOT of labor and simple supply and demand means that having a lot of something means it will cost less and so their labor costs less than ours because they have an abundance of it. QED products that are sensitive to manufacturing cost of labor will inevitably migrate to locations with lower labor costs. Products not so sensitive to labor costs will go to places with low capital costs. The US has the lowest cost of capital in the world currently so we get the capital intensive products instead of the labor intensive ones. In plain english we make cars and airplanes and don't make Happy Meal toys and the cheap crap you buy in Walmart.
As for unions, basically unions were TOO successful. They priced themselves out of the market for labor intensive manufacturing in a global market. And for capital intensive manufacturing there isn't as much need for unions because the pay rates are much higher and there is a lot of automation. As a result when politicians promise to bring back manufacturing jobs they are literally promising the impossible. The only way the US will get back labor intensive manufacturing on a large scale is for the cost of US labor to fall back towards the global mean. This means paying US workers MUCH less then they currently demand. Otherwise the only alternative is to automate the work which is what capital intensive manufacturing does. So pick your poison - much lower paying jobs OR automation.
Ironically when people argue against immigration in our country, they are arguing against the only thing that will allow our demographics to compete with China and India. China has 4 people for every 1 in the US and a lot of those people are very smart and hard working. Without immigrants (both skilled and unskilled), the US will eventually lose that fight just from sheer numbers. China has more labor that costs less AND a lot of very smart high end labor too. Doesn't mean the US will become some backwater but without welcoming the best and brightest into our country with open arms we don't have a prayer of keeping up in the long run.
There's all sorts of prep work going on. They're condemning people's homes and land. They're tearing up all the roads and traffic is hell. Oh yeah, my property tax bill jumped up this year.
At about the same time Walker was making his deal, Foxconn was laying off workers in Taiwan at an LCD plant because they were being replaced by robots. Taiwanese people earn far less than US people. Why would they hire expensive US workers when they're replacing cheaper Taiwanese workers with robots?
Walker is running for reelection but doesn't talk about Foxconn. Hmmmm.