The Con Lives

Foxconn is still a Con

In August, 2017, I wrote a column here cautioning against the then proposed deal with Foxconn that would exchange tax incentives costing Wisconsin taxpayers for decades for a promise to build a brand spanking new facility to make high-end liquid crystal displays. I noted concerns beyond the fiscal, including damage to the environment, Foxconn’s less that stellar track record for keeping promises and others.

As we all now know, the deal was rushed through with little more than a “thank you ma’am” by the GOP controlled legislature and signed with much fanfare by now former Governor Scott Walker.

Foxconn proceeded with substantial help by state and local governments using the power of eminent domain to displace home owners whose presence impeded progress and ground was broken by Walker and Trump. The deal seemed to be full speed ahead until after the election of Governor Evers and other Democrats to all of Wisconsin’s administrative offices and Trump’s tweeted trade war with China heated up dramatically.

Apparently out of the blue Foxconn, decided to scale back or even eliminate the new manufacturing facility after the first of the year. After some blowback, Foxconn switched again. The next claim was that it would build a new research and development facility instead. The previous promise of 13,000 jobs somehow got lost in the shuffle. President Trump called Foxconn’s chairman and then tweeted that he had saved the day and the deal and the manufacturing plant he helped break ground for was back on track. Even though Trump was engaged in a tariff war with China, he somehow managed to convince Foxconn’s leader that the company would not be impacted.

All appeared to be well again, at least on the surface. But what about the promised blue-collar jobs and the resurgence of American manufacturing might Walker and Trump promised? Then Bloomberg published a scathing report that even under the reconstructed project, the 13,000- job promise will never be kept. 

The report outlines the external market forces requiring Foxconn to cut as many as 100,000 positions world-wide, the failures at the mini-Foxconn plant here that makes Sharp TVs, and internal resistance to the Wisconsin project by Foxconn managers. The first hard hit came at the end of last year when the company missed its’ projected job creation goal by 82 percent causing it to lose its tax credits for the year. There are only 122 jobs advertised on the company website, many at least 5 months old. 

Meanwhile, local and county governments have spent an estimated $120 million for land and the state is committed to at least $120 million in road improvements for the project. In addition, Foxconn was cleared to fill 26 acres of wetlands for the project after state regulations that would have prevented it were repealed by the legislature. 

Foxconn’s recent about-face after its chairman spoke with President Trump is, so-far, sadly lacking in specifics about Foxconn’s future in Wisconsin. It appears to be little more than a pawn in the US-China trade war that overshadows the whole mess. 

Not to be shut out of the limelight, Wisconsin’s Assembly leader, Robin Vos, and Senate Majority Leader, Scott Fitzgerald, immediately blamed newly elected Governor Evers for changing the environment for the deal’s success. Never mind that they offered not one shred of evidence to support their claims that Evers scuttled the deal. They claimed that no taxpayer dollars had yet been paid to Foxconn, omitting the $15 million the state paid to the village of Mount Pleasant to help with land acquisition and infrastructure costs, other promised funding for local government debt costs and road improvement guarantees.

Foxconn has a history of abandoning or scaling back projects after making grandiose promises of job and economic growth. This track record was ignored by the Wisconsin Economic Development Corporation executives wooed by Foxconn officials. That history was one of the reasons Gov. Evers campaigned on making the WDEC stronger and a better watchdog for taxpayer dollars. 

We may be stuck with this “pig in a poke” from the Walker era, but at least we now have people in office who will do whatever they can to hold Foxconn to its promises and minimize the damage done to our economy when the company abandons Wisconsin. Let’s hope they keep the light shining on the backroom deals so we all know when we are getting fleeced.