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Foxconn Is Reconsidering Plan For Wisconsin Factory (cnn.com)
An anonymous reader quotes a report from The New York Times: Foxconn, the giant Taiwan-based company that announced plans for a $10 billion display-making factory in Wisconsin, now says it is rethinking the project's focus because of "new realities" in the global marketplace (Warning source may be paywalled; alternative source). The company said Wednesday that it remained committed to creating as many as 13,000 jobs in Wisconsin, and continued to "actively consider opportunities" involving flat-screen technology. But it said it was also "examining ways for Wisconsin's knowledge workers to promote research and development." "The global market environment that existed when the project was first announced has changed," Foxconn said in a statement. "As our plans are driven by those of our customers, this has necessitated the adjustment of plans for all projects, including Wisconsin." But the company said its presence in Wisconsin remained a priority, and said it was "broadening the base of our investment" there. The statement followed a Reuters report quoting Louis Woo, a special assistant to Foxconn's chairman, Terry Gou, as saying that the costs of manufacturing screens for televisions and other consumer products are too high in the United States. "In terms of TV, we have no place in the U.S.," Mr. Woo told Reuters. "We can't compete." Some Wisconsin Republicans blamed the company's change in plans on the election of Gov. Tony Evers, a Democrat, to succeed Mr. Walker, a Republican, in November. In a joint statement, Assembly Speaker Robin Vos and the Senate majority leader, Scott Fitzgerald, said it was "not surprising Foxconn would rethink building a manufacturing plant in Wisconsin under the Evers administration." The lawmakers added: "The company is reacting to the wave of economic uncertainty that the new governor has brought with his administration."
Have you seen the deal that Wisconsin was going to give them at the expense of the taxpayers? No one was going to benefit from that arrangement except for Foxconn. They could have put all that money towards encouraging tech development in their state instead.
This just gave them an excuse to go all out, instead of downsizing their overly ambitious plans, which despite the 3+ billion in tax incentives wasn't going to add more than... 1000? jobs in the near term future, and probably would never add the full 13000 jobs that was promised.
But the election of a Democrat to replace him gives them both an excuse not to lose face and blame it on the incoming administration while being able to abort their failed project that would have otherwise made both Walker/future Republican candidates as well as Foxconn look incompetent or untrustworthy.
The loss of potential jobs is going to hurt Wisconsin in the short term but if the people can support each other in the meanwhile it will work out better for them in the long term when they aren't subsidizing companies to the detriment of their local and state tax revenue, necessary for all the services they might need, including unemployment if those jobs don't work out.
Personally I would like to see the federal government stop giving out state aid and only take the money required to operate the federal government and the armed services themselves, and leave the state level infrastructure and planning to the states. That way when a state fucks themselves up they have only themselves to blame, whether that state is California, New York, Florida or Wisconsin.
How is that news? The "other guy" or the "other party" is always to blame for every unpleasant event. Politicians point fingers out of reflex.
Table-ized A.I.
It wanted $4 billion in tax breaks for only promising 3000 jobs ("up to" 13000 my ass), i.e $1.33 million per job, or $346k per job even if they hired all 13000.
Average wage was expected to be around $50-60k/year.
You do the math. Wisconsin would have been subsidising Chinas Foxconn between 5 years free labor and 24 years free labor.
There was nothing in the contract stopping Foxconn walking away from the factory once the free labor ended. Wisconsin would have been better investing in local companies.
https://www.bloomberg.com/opinion/articles/2018-11-06/wisconsin-s-deal-with-foxconn-is-the-worst-of-corporate-welfare
See title.
Yes, Trump got played like a baby by Foxconn. They roped him like a baby calf and he was more than happy to buy their ridiculous claims. Anyone who was watching this knew that the likelihood of Foxconn building a huge plant in Wisconsin was near zero.
To all you Wisconsin voters who believed Trump's blather and his insane, over-the-top promises, sorry, but you got exactly what you voted for: a giant bag of bullshit.
-
PS- Coal isn't coming back either; it's as dead as disco. Your first fucking clue should have been the Kentucky Coal Museum installing solar panels on its roof. (It's true, look it up.) But that just wasn't obvious enough for you, was it?
Still, don't worry- I hear the new Space Force rockets will be powered by "beautiful clean coal".
Just cruising through this digital world at 33 1/3 rpm...
Apple doesn't use Foxconn displays. They use a mix of displays from Samsung (for OLEDs) and LG (LCDs, and possibly OLEDs in the future if LG can fix production problems). In any case: they don't use Foxconn displays. What they use Foxconn for is assembling the iPhone, the individual components are mostly sourced from other companies.
And, in fact, that's the problem. Manufacturing LCD displays in Wisconsin makes no sense whatsoever. This is the main problem American manufacturers have: most of the raw materials to make these things are being refined in Asia, and most of the final assembly is also in Asia, so manufacturing a component in the US means you have to ship raw materials to the US from Asia and then ship the component back to Asia for it to be put in whatever it's going to end up in. Needless to say, that's far more expensive then just shipping parts around Asia.
See title.
Yes, Trump got played like a baby by Foxconn. They roped him like a baby calf and he was more than happy to buy their ridiculous claims.
Despite the article saying specifically that it was the election of a Democrat that changed their mind?
You sure about that? Only mention of it being politically related (and not economically) was this part:
Some Wisconsin Republicans blamed the company's change in plans on the election of Gov. Tony Evers, a Democrat
Wait....One side is blaming the other for all the problems?! WOW! I'm shocked! Shocked! ....Well, not that shocked.
in the first place.
This was always just them extracting money from Wisconsin tax payers (and all of the United States, since like a lot of Red states Wisconsin takes in more than it pays out in fed taxes) in exchange for bribes.
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he got exactly what he wanted out of the deal: a political prop to use for winning the 2016 election. A fair trade for a bunch of tax dollars collected mostly from working class Americans.
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The contract failed an audit, it didn't require the employee work in Wisconsin to count as a worker at Wisconsin, it only needed them to be paid out of that office. Foxconn would have transferred their US employees payroll to Wisconsin to take advantage of the tax break.
https://dailyreporter.com/2018/12/20/audit-faults-plans-to-credit-foxconn-for-work-outside-state/
"Wisconsin’s economic-development agency needs to modify procedures to ensure tax credits aren’t awarded for Foxconn Technology Group employees who don’t do work in the state, which would violate state law and the state’s contract with the company, an audit released Wednesday said....The Wisconsin Economic Development Corporation incorrectly wrote guidelines that would allow Foxconn employees who are not doing work in the state, but who are paid in Wisconsin, to be included in the tally, the audit said."
And for the workers, well they were planning to bring in Chinese workers:
https://www.wsj.com/articles/foxconn-considers-bringing-chinese-personnel-to-wisconsin-as-u-s-labor-market-tightens-1541505600
"Foxconn Technology Group is considering bringing in personnel from China to help staff a large facility under construction in southern Wisconsin as it struggles to find engineers and other workers in one of the tightest labor markets in the U.S."
It didn't pass the sniff test. It looked like one giant tax game for Foxconn.
Under the new Republican corporate tax deal, it's cheaper to earn the money abroad, and repatriate that money at the 8% repatriation tax rate into the US rather than earn it in the US (at 21% corporation tax), so Foxconns tax deal isn't as sweet as it would have been.
... and it's well known here that Foxconn was never really going to bring 13,000 jobs to Wisconsin, because of what they did in Pennsylvania. The whole thing was a stunt to help get Gov Walker and Trump get reelected. It failed, Walker lost in November. Now we'll see what happens to President Shutdown.
I am aware of this.
I'm not suggesting the plant was for producing items for apple. My suggestion is that they are forecasting a significant reduction in revenue as a result of less orders from Apple. This reduction in revenue in one part of the business now means that capital investments will be reviewed across the whole business. If you have less money coming in you are going to be less bullish about expanding.
Tax breaks are a reduction in expenses. It is not income received.
While it may result in a higher net profit for the company at the end it doesn't offset the reduction in free capital that investing in plant requires.
See title.
Yes, Trump got played like a baby by Foxconn. They roped him like a baby calf and he was more than happy to buy their ridiculous claims.
Despite the article saying specifically that it was the election of a Democrat that changed their mind?
Regarding the Trump thing, you're complaining about something that doesn't go our way in the middle of the situation. The right time to pass judgement is when it's all over, when the dust has settled, and when we can evaluate whether minor setbacks in the middle were worth the overall outcome.
Similar with the N. Korea peace negotiations. These things take time, there will be some back and forth, and possibly nothing will come of it... but now is not the time to make judgement. Let the situation play out, and *then* figure out whether we are better off. At the very least, the president talked us out of a nuclear war.
State governments giving away billions in tax benefits is arguably a bad idea. How long would it take for 13,000 additional labor-jobs to be worth the loss of $3 billion in tax credits? Even if you account for add-on benefits to the economy, it would take decades... and depending on inflation and other details, the deal might possibly never be revenue neutral.
We really don't know at this point whether this is good or bad for the US, and the tendency to blame Trump for every little thing that irks you in the country is tedious as hell.
Grow up, set your hatred aside, and post something insightful for a change.
No, the article did not say it was because a Democrat got elected. It said the REPUBLICANS said that was why.
"Republicans who control Wisconsin’s Legislature suggested that the arrival of Gov. Tony Evers, the Democrat who ousted Mr. Walker, was partly to blame."
Except that a decrease in apple sales = less money at foxconn = less money available to invest = reconsidering capital investments, irrespective of whether they are dependent on apple or not.
When this deal was originally discussed on /., there were many ignorant people pushing this incorrect narrative then. I see that you did not learn the truth at that time.
The deal calls for payments (not just tax reductions) from the state to Foxconn. They are called tax credits -- but if the company's tax is negative because of the credits, money will flow from the state to the company.
This is similar to tax credits for solar power installations -- if your taxes go negative, you get a check from the government (unlike credits for electric vehicles, which cannot result in you getting a check from the government).
They only issue now is how much of the credits are dependent on performance by Foxconn.
The real "Libtards" are the Libertarians!
Similar with the N. Korea peace negotiations. These things take time, there will be some back and forth, and possibly nothing will come of it... but now is not the time to make judgement. Let the situation play out, and *then* figure out whether we are better off. At the very least, the president talked us out of a nuclear war.
HAHA, as if Trump talked you out of a nuclear war.
NK would never launch a nuclear weapon unless it was first attacked by the South and/or the US.
If they made the first strike the nuke card would be played and NK would be turned to ash by retaliatory attacks.
It's like the BS that Trump is pushing that NK is going to give up its nukes, why the hell would they? If they did then they will have lost their only bargaining chip and the rest of the world would just go back to ignoring NK.
NK doesn't want to attack anyone with their nukes, they just want to ensure the longevity of the regime, and nukes give them that power.
Trump was played yet again.
"If it is a refundable tax credit then whoever negotiated that deal from the government side is almost criminally negligent"
Or they were anticipating kickbacks from foxconn, in which case they're even more of a criminal. There's enough money involved that this becomes highly plausible.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
"It's better to pay more to stay in China. It's just more cost effective and the workers are smarter, more creative, more motivated and more skilled."
More motivated? Sure. Got to protect that social credit score so they don't decide to harvest your internal organs and sell them to the highest bidder. Smarter? Maybe. More creative? Horse shit. The "nail that pops up gets hammered down" mentality discourages creativity. We have it here too, but they have more of it. Besides slavery, and raping South America, and deliberately delaying entry into WWII so everyone else could get the shit bombed out of them, and oh yeah nuking Japan, what made America great was cottage industry. This persisted even up into the early days of the computer age, what with garage-spawned businesses like HP, or that fruit company. China's primary claims to fame in tech are building things other people designed on contact, and making shitty knockoffs of things other people designed without consulting them so as to understand the design decisions.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
"We need both parties brought to heel, and perhaps a few more contenders in the mix"
Nope. Third party candidates have zero chance to get elected, and they just confuse the issue. Political parties were never mentioned in the Constitution because they were seen as a plague, but just giving up on regulating them was a total failure which should immediately and conclusively put paid to the rumors of the founders' genius. At this point the only way we'll get a credible third party is if there's sufficient schism within one of the major parties that it splits in two, but thanks to partisan dumbshits in voting booths, that would all but guarantee a win for the other side. Sadly, the only party that might actually split would be the Democrats. The Republicans have demonstrated time and again that they are united in screwing over the nation, and the Democrats have ultimately proven that they are disconnected and thus ineffectual. The Republicans hang together, and the rest of us twist in the wind.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
The GOP in Wisconsin did everything they could to undermine democracy and the will of the voters. However it was abundantly clear before the election that Walker's deal with Foxconn was all but dead regardless of how the election were to go; now that we see that reality coming to bear they are quick to lay blame at the feet of the opposition that has had no opportunity yet to do anything about it.
It's no surprise that the conservative voice here on drudgedot couldn't pass on including the GOP opinion on the matter.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
I live in Wisconsin, and I voted to elect Governor Evers (and against Trump). The Foxconn deal was a huge mistake. As others have noted, the state investment doesn't justify the jobs created. Unfortunately, it's probably too late to renege on it, even though the governor is probably tempted to (the legislature is still Republican-controlled, but apparently he could do it by pulling environmental permits). There have already been massive infrastructure investments and the use of eminent domain to obtain properties. I-94 between Milwaukee and Chicago is essentially being completely rebuilt right now (it's a pain, too, because we deal with much heavier traffic whenever I go to Chicago or to visit my family in Ohio.
On a more human note, my brother-in-law just got hired by them as an engineer (and yes, he's from Wisconsin, not Taiwan or the PRC) He is spending the next several months (at least until May, and this started around Jan. 1) working in Taiwan. They've hired a ton of professional staff. I'm in a graduate program at a Milwaukee university in computer science and they have been recruiting there. I don't know about manufacturing workers, but if this deal blows up, there's going to be a lot of people who are ALREADY working there who are going to get the shaft.
This deal may have a silver lining, however, because many people would like to see Milwaukee connected to Chicago to have SE Wisconsin essentially become part of Chicagoland. The economic benefits of that could be big. Increased rail service linking the two cities could be a byproduct of this project, which would potentially allow more Milwaukee residents to work in Chicago (and vice versa). We were going to get that with the last democratic governor but Walker pulled out of the deal because trains are for communists. If other companies came to the same region (which is a great location, because you are about 1 hour from OHare and a huge intermodal facility) it could end up being a positive. I'm not optimistic about that because I distrust everyone who was involved in the original deal.
Some Wisconsin Republicans blamed the company's change in plans on the election of Gov. Tony Evers, a Democrat, to succeed Mr. Walker, a Republican, in November. In a joint statement, Assembly Speaker Robin Vos and the Senate majority leader, Scott Fitzgerald, said it was "not surprising Foxconn would rethink building a manufacturing plant in Wisconsin under the Evers administration." The lawmakers added: "The company is reacting to the wave of economic uncertainty that the new governor has brought with his administration."
Translation A: There is going to be actual oversight for this sweetheart deal for Foxconn (unlike before) and Foxconn management is worried about that
Translation B: Certain republicans that negotiated this bad deal are worried about the bribes they took becoming public knowledge
Translation C: Circumstances that have nothing to do with the current Wisconsin governor are being used as a political point scoring opportunity
Pick the translation that works for you. Probably some truth in all of them.
Where's the value for Foxconn to use American workers?
There are numerous benefits. In no particular order:
1) Products made in the US for sale in the US do not have to worry about exchange rate fluctuations or import tariffs
2) Reduced freight costs and production lead times to the US market
3) Production flexibility - gives Foxconn the ability to produce products in the most sensible market for a given product
4) US worker productivity is among the highest in the world (it's how we compete)
5) US manufacturing workers are among the best in the world (the US has a $3 Trillion/year manufacturing sector)
6) Automation will necessarily be used extensively to offset labor costs
7) It gets Foxconn and companies that use them (Apple, etc) political points and the ability to lobby state and federal governments
8) For products with relatively low labor content US workers make tremendous sense, especially for products that are sold in the US.
Your question would apply equally to Honda or BMW or Siemens or any other large manufacturing concern. They make a products in the US because it makes economic sense to do so. Not every product of course but some will benefit.
They're expensive. Wisconsin is a union state too.
There is no such thing as a "union state". There are companies that have unions in Wisconsin but there are plenty more that do not. Just because a company sets up shop in Wisconsin does not mean a union will be able to organize that company.
Which means that Foxconn will have union labor issues just building the factory and keeping it running will just be a nightmare.
I'm sure there will be unions interested in organizing the plant just like every other large manufacturing concern. Unions mostly have been losing these organizing efforts in recent years so I doubt Foxconn is overly worried. There are things that worry Foxconn about such a big project but unions are pretty far down the list these days.
As for skills, Wisconsin the state has no fiscal responsibility, it has not fiscal stability, it has an almost 3rd world infrastructure.
Feeling hyperbolic today are we? Pretty much none of that is true. The rest of your post is just similar provocative nonsense.
Unless we somehow managed to change our voting system to use Ranked Choice Voting. It worked in Maine a few months ago. Granted, I'm more likely to see pigs fly, unless the Dems get really scared about another 3rd party candidate screwing things up for 2020.
I believe the real fear of NK is that these nuclear developments will be exported either purposefully or "accidentally" to radical groups.
Not that NK will launch a first strike itself, but will provide the means for other groups to initiate global carnage.
First off, GP is right. This wasn't Tom Walker driving up a truck with a pallet of $4 billion dollars to give to Foxconn the day they broke ground like every story on earth says it is. It was tax breaks for a supposed huge plant that if it existed as planned, would have equaled $4 billion dollars in tax revenue over 15 years. Also keep in mind that this was basically farmland. and it was generating little to no Tax Revenue as it was.
Second, They had to meet certain hiring criteria each year in order to qualify for the subsides in a year by year basis. They already didn't make the 2018 criteria, so they lost some of the money already. Since they are most likely not going to hit the planned targets, The tax breaks are basically null and void.
The most it cost Wisconsin so far is the initial tax breaks, infrastructure upgrades and the land that they leased to Foxconn, which is nowhere near $1 Billion right now let alone $4 Billion. If Foxconn bails, the infrastructure and land is sill owned by the state and can be used to entice other companies to build there.
I believe the real fear of NK is that these nuclear developments will be exported either purposefully or "accidentally" to radical groups.
Not that NK will launch a first strike itself, but will provide the means for other groups to initiate global carnage.
I doubt that very much, why would they? What would they gain exactly? The risk of being found out would severely outweigh any "benefits" from doing so. If they were found out then NK would be turned into ash.
Pakistan is more at risk of doing something like that as it has deep ties to radical groups who would love to let off a bomb in India or the US.
Foxconn Is Reconsidering Plan For Wisconsin Factory
Not to fall on a "No True Scotsman" fallacy, but c'mon, anyone with half a brain knew this deal was crap. Only gullible yokels would fall for this mendacious nincompoopery (who keep voting against their own interests in favor for oilsnake peddlers who sell them this shit.) OMG ME BUBBAH GUNNA GIT MAH JAWB, WINNING LUK HER UP! (But you know who actually had actual economic plans for Flyover Country? HR-fucking-C, but whatever, reap what you sow.)
LOW. VALUE. ADDED. MANUFACTURING. AIN'T. GONNA. FUCKING. COME. BACK. EVER.
A sucker is made every minute. I can sympathize with an illiterate peasant in a 3rd world country not having the means to discern the fallacious nature of such promises.
But people in the richest nation the world had ever seen, with public education available for free all the way to HS, and in the 21st century, with access to the damned Internet. Nah, you fall for this shit, you are systemically on par with the Dodos in "Ice Age."
As a German friend of mine once said about why he moved to the US. In Europe there is a left, a far left, and an even further left.
NK would never launch a nuclear weapon
We can't assume people in general - and especially self-aggrandizing authoritarians with delusions (or a facade) of supernatural providence - will behave rationally all the time. Nukes just have too much of a potential downside.
Millions long for immortality who do not know what to do with themselves on a rainy Sunday afternoon. -- Susan Ertz
When this deal was originally discussed on /., there were many ignorant people pushing this incorrect narrative then. I see that you did not learn the truth at that time.
If I gross 100K dollars, and pay 30 percent of that in taxes, I have how much.
If I gross 100K dollars, and pay nothing, I have how much?
If I gross 100K dollars, and am paid money because reasons, I have 100K dollars plus what that payment to me is.
The funny money folks always make up schemes and cute designations. It's how money can be hidden.
Anyhow, "Although the state measures to attract Foxconn are labeled tax incentives, they largely would be paid in cash since the effective Wisconsin state tax rate is 0.4% on manufacturers."
and
"The incentives include up to $1.5 billion in state income tax credits for job creation and up to $1.35 billion in state income tax credits for capital investment. Foxconn is eligible for additional local incentives.
"The company is eligible for refundable tax credits equal to 17% of wages paidinstead of the typical 7% and 15% of capital costs instead of 10%." sauce: http://fortune.com/2017/07/31/...
So while you can strut around like I have no idea what I'm talking about, we have payments that are called tax incentives, and up to 3 billion of these tax incentives or what us great unwashed call.... ahem...payments. Who can tell for certain? All the interim steps and misleading names are just accounting tricks.
There is something I call Realekonimik, similar to realpolitik. One might call it "cash in pocket after all of the bullshit." Realekonomik calls these massive incentives to be taxpayer subsidies to a non-US company. It's like paying a woman to date you. She makes money, and you end up poorer and looking like a fool. And as soon as you stop paying her, she'll dump you and find some other willing dope.
This is a bum deal, pretty plain.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
"No one knew that 'muricans don't work as long hours or as cheaply as Chinese workers... so sad!"
"no one knew that very few TVs or computer monitors are made in America"
"no one knew it could get so damned cold in Wisconsin in the winter"
"no one knew that Foxconn laid off 10k workers in an LCD plant in Taiwan at about the same time they were announcing the deal in Wisconsin to employ 13k people building LCDs."
Walker got fox-conned, and the taxpayers got screwed. In the last election, in which Walker was running for reelection, Foxconn was rarely mentioned in campaign speeches. I wonder what he knew...
I wonder if my property tax (I live 2 miles from the Foxconn facility) will go back down to prefoxconn levels...
Doubtful. If the weapon traced back to North Korea, then it would be treated as a first strike by North Korea. And it's not feasible to export a nuclear weapon without someone else detecting it.
Kim wants nukes to keep himself alive. Exporting nukes does not accomplish this goal. Nor does shutting down his nuclear weapons facilities.
$230k in potential subsidies per worker, new tariffs on Chinese imports and a company that needs plenty of R&D.
With this announcement Foxconn states they want to go from a plan to employ 1000 blue collar workers to a plan to utilize the plant for R&D. Much higher paid and higher education employees. This would let Foxconn make the most of the subsidy, avoid the tariff issues, and make a big push to a higher class of worker in Wisconsin.
Yes, you could argue that anything Foxconn says should be treated with a heavy grain of salt at this point but consider for a moment that maybe Foxconn doesn't want to either rob the state of Wisconsin or engage in a bad business decision. This would be the direction they'd have to start going down. It really would be a win all around.
Now to part B, making sure it is actually natural born Americans staffing the place. Preferably Wisconsonians. Although Wisconsin's mostly white demographic will make you cringe Ami so I know you'll oppose that and force a racist demand they import people to avoid an uneven diversity profile.
That's a chicken an egg problem. If you build it, they will come.
It is too expensive to source locally, that is the reason for the subsidy. It isn't as if there aren't plenty of raw resources in the US that could be refined. Those industries have just diminished and stagnated. The idea here was to increase pressure to develop them again. The end result being the same supply chain but in the US instead of Asia.
This is why she lost. She told a bunch of 40 something blue collar guys to go back to college for advanced degrees. The amount of cluelessness on display there is astonishing.
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Considering that most German elections are won by center-right parties, that implies some scary stuff about you and your friends.
No my argument is that if Apple is doing terrible right now in phones and that severely affects Foxconn in parts of their business that has nothing to do with Apple (displays), maybe Foxconn is terribly managed.
Apple is one of their largest customers. It would not be surprising if a major reduction in Apple's business led to a substantial reduction in Foxconn's.
I personally think it's only one reason of several, but it does seem reasonable that it's contributory.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"