Foxconn and Wisconsin reach new deal to do something different at Donald Trump's favourite (flop of a) factory

Wisconsin governor Tony Evers and Foxconn board member Dr Jay Lee have announced a new agreement to revive and remodel the notorious high-tech plant that attracted billions in incentives but appears not to have delivered promised economic benefits. The plant was announced in 2017, amid much fanfare that Foxconn would spend $ …

[Pascal Monett]

"In January 2019, Foxconn said making TVs in the US was unprofitable"

And that's not something that any study might have brought to light before starting building ?

No, this whole thing was one giant brown envelope for someone. No one in charge ever expected it to work, but it was a good excuse to shuffle some moolah here and there and make friends happy in the high circles.

[ThatOne]

Re: "In January 2019, Foxconn said making TVs in the US was unprofitable"

> No one in charge ever expected it to work

Why, it worked just fine: Money changed hands as planned, following the classic plot where taxpayers' money ends up in the pockets of some big company, who in turn gives back some of that love to those politicians who made this possible...

[Dave314159ggggdffsdds]

Re: "In January 2019, Foxconn said making TVs in the US was unprofitable"

Except a) that never happened and b) it's an antisemitic conspiracy theory with the word 'Jew' taken out.

What actually happened was that Foxconn got some bargaining points with Trump, who promised them benefits they knew they'd never earn.

It was a sham, not a scam.

[ThatOne]

Re: "In January 2019, Foxconn said making TVs in the US was unprofitable"

> it's an antisemitic conspiracy theory with the word 'Jew' taken out

So, according to you, calling politicians corrupt is "an antisemitic conspiracy theory with the word 'Jew' taken out"? Sorry, but you're either terminally naive, or had vested interests in this. BTW kudos for the "think about the children"-like use of antisemitism.

Unfortunately for your argument, this specific scam is quite common worldwide: Similar big projects, where a government spends millions of taxpayers' money to help build a factory which has an ice cube's chance in hell to ever work (don't even mention yield a profit), appear regularly all over the planet. I've personally seen two, in two different (1st world) countries. I know politicians are stupid, but in this case it's no isolated occurrence, there seems to be a pattern here.

[John H Woods]

Re: "In January 2019, Foxconn said making TVs in the US was unprofitable"

It seems he thinks corruption is essentially Jewish, so it's odd that he's worried about other people being antisemitic!

[Anonymous Coward]

Re: "In January 2019, Foxconn said making TVs in the US was unprofitable"

Yet somehow making electric cars is going to be?

[Michael Wojcik]

Re: "In January 2019, Foxconn said making TVs in the US was unprofitable"

Look, every business blessed by the golden hand of the Donald has been wildly successful. They just need to tweak things a bit.

Personally, I'm rather chuffed about the Foxconn plant, since it led to Walker's downfall. That dude needed to go.

[Dabooka]

Unprofitable despite those incentives?

Either someone somewhere has scooted off with wheel barrows full of money or practices in the far east tech manufacturing sector are even worse than I feared.

Or both. It's probably both isn't it?

[sanmigueelbeer]

Foxconn representative said the company might shift to manufacturing electric vehicles at the plant instead of displays

And pigs might fly -- I'm just sayin'.

[willyslick]

It was just a PR exercise for Trump - like everything else he didn't do while he was president (except tax break for the rich). Like the wall - he built a net 50 miles of new wall (on a 2,000 mile border) and the mexicans did not pay for it. Why should this factory be different that anything else from the Orange-u-tang??

[DS999]

True it was a PR exercise for Trump, but Foxconn had been talking to Wisconsin long before Trump shuffled along and claimed credit.

Foxconn was probably talking to a lot of governors fishing for the biggest subsidies they could find, and making promises they knew they wouldn't keep about the size of the plant. If the subsidies are large enough it will make sense for them at some smaller size.

Foxconn has to keep moving the goalposts to keep the subsidies from being pulled entirely, but I don't see how they can ever claim many of them unless they can prove they've actually brought jobs to the area. Nevermind that with the proposed location on the Illinois border it wouldn't even exclusively benefit Wisconsin so the subsidies would come out higher per state taxpayer than claimed.

[Michael Wojcik]

tax break for the rich

Be fair. It was also a tax break for the moderately well-off.

[Hardrada]

Context

"[Democratic Party] governor who once said $3bn subsidy plan was a con now thinks it 'works for taxpayers'"

Unsurprising to anyone who paid attention to the text of the original agreement, in which the state of Wisconsin assumed very little risk.

Foxconn agreed to use their own money to build infrastructure and facilities on low-value land in exchange for reduced tax on things like building materials. They also agreed to train and hire employees in a weak sector of the state's economy in exchange for a reduced tax rate on that portion their payroll.

The state government would have lost nothing if the project failed, and only offered to forgo part of the revenue windfall if it succeeded.

[VirtualizationGuy]

Re: Context

The problem is not really with the State of Wisconsin's liability. It is at the local level. Many people lost homes and land, and local government is already committed to spending nearly $1billion in infrastructure. Only 40% of that money is able to be charged back to to state level (and only when revenue is below expected taxes from Foxconn). http://www.milwaukeeindependent.com/syndicated/wisconsin-taxpayers-hook-infrastructure-costs-foxconn-reneges-obligations-racine/

[Hardrada]

Re: Context

"local government is already committed to spending nearly $1billion in infrastructure"

You may want to re-read your source:

"At the local and regional levels, Mount Pleasant and Racine County created a tax-increment financing district in 2017 to pay for a $764 million investment to support the Foxconn project."

...i.e. they created a reduced-tax district around the construction site. Foxconn would have received tax waivers (not payments), and the waivers would have been equal to 10% of what they spent on construction in the district.

"The problem is not really with the State of Wisconsin's liability. It is at the local level. Many people lost homes and land"

Do you know how many? I don't see any record of a single home or property being taken under eminent domain. Out of 132 parcels, 125 were sold at 140% of their market valuation. Six others were sold at a negotiated price, and a third went to mediation.

[Hardrada]

Re: Context

another went to mediation

[Brad Ackerman]

Would you believe 3000 people? 300? One guy in a Portakabin making minimum wage?

Sherlock because Max Smart wasn't an option.

[onemark03]

billions in incentives [and no] economic benefits

Tell the company to build the factory itself, hire the people and start operating commercially (manufacturing and selling the products etc.) and then see what sort of tax-breaks are viable.

That would eliminate the would-be scammers from the genuine operators.

[Robert Carnegie]

I had an idea recently what to do with the empty building but I've forgotten it. Something about coronavirus maybe? Or... I don't know. Anybody?