www. O S N E W S .com
News Features Interviews
BlogContact Editorials
.
Wisconsin's $4.1 billion Foxconn boondoggle
By Thom Holwerda on 2018-11-04 21:22:09

It was supposed to be a big win for the state of Wisconsin: Foxconn was going to build a massive LCD factory in the state, raking in a massive state subsidy. Fast-forward a few years, and little seems to have come of the deal.

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.

Polls now show most Wisconsin voters don't believe the subsidy will pay off for taxpayers, and Walker didn't even mention the deal in a November 2017 speech announcing his run for re-election. He now trails in that re-election bid against a less-than-electric Democratic candidate, the bland state superintendent of public instruction Tony Evers.

It all seemed so promising. So how did everything go so bad so quickly?

The jobs supposedly created through this deal would cost the state government over 300,000 dollar per job - which is an absolutely terrible investment. In order to get there, Foxconn received special exemptions from environmental rules and regulations, raising concerns about pollution.

Also, but unrelated, boondoggle is a great word.

 Email a friend - Printer friendly - Related stories
.
Read Comments: 1-10 -- 11-17
.
Another great word
By JLF65 on 2018-11-04 21:54:28
> Also, but unrelated, boondoggle is a great word.

Another is 'hornswoggled', which is what they were. :)
Permalink - Score: 3
.
RE: Another great word
By ssokolow on 2018-11-04 23:16:13
> Another is 'hornswoggled', which is what they were. :)

Gotta love fun words. I actually collect them.

Another one would be gadzookery, which is, sadly, what so many of these nifty words are becoming.

Edited 2018-11-04 23:16 UTC
Permalink - Score: 2
.
Careful on Subsidies
By Yamin on 2018-11-05 00:05:16
The other thing is incentives are complex.
There's direct incentives. Like here Company, we give you 1 billion dollars and you build a plant and employ X workers...

There's also incentives which really don't cost the state much.

For example, if a state says Company we exempt you from paying property taxes for 10 years as a value of 1 billion dollars. That might not cost the state much. At worst you can think of in a big city like New York, where property is expensive, sure you can definitely get a more tangible cost of lost revenue... as you could theoretically have that space used by another company who would pay property tax. But for say Wisconsin, there might not be another company who would pay that much property tax, so it's not like the state would have 1 billion in property tax revenue otherwise.

The other more real costs like roads/infrastructure that would otherwise not need to be built.

Then you consider the plus side of workers and additional tax revenue they bring (income/property/sales...)

It's a crazy equation on if it's a good deal or not.
It's just rarely as simple as thinking the government is handing foxconn 4 billion dollars.
Permalink - Score: 3
.
RE: Another great word
By WorknMan on 2018-11-05 00:34:50
Boondoggle is okay, but 'brouhaha' and 'scuttlebutt' are annoying :P
Permalink - Score: 2
.
RE: Careful on Subsidies
By Alfman on 2018-11-05 01:00:09
Yamin,

> The other thing is incentives are complex.
There's direct incentives. Like here Company, we give you 1 billion dollars and you build a plant and employ X workers...

There's also incentives which really don't cost the state much.

For example, if a state says Company we exempt you from paying property taxes for 10 years as a value of 1 billion dollars. That might not cost the state much. At worst you can think of in a big city like New York, where property is expensive, sure you can definitely get a more tangible cost of lost revenue... as you could theoretically have that space used by another company who would pay property tax. But for say Wisconsin, there might not be another company who would pay that much property tax, so it's not like the state would have 1 billion in property tax revenue otherwise.


I disagree, whether it's subsidizing apple/google/amazon/foxconn to open up a new facility, or subsidizing construction costs for privately owned sports stadiums, etc, it costs us tons of public money that we never get back. The long term net effect, every time, is that our governments incur more debt and must decrease services to make up for the shortfall. This contributes to a lower quality of life for most, while it enables a privileged few wealthy corporations to laugh all the way to the bank without having to take on risk or pay their fair share.


> Then you consider the plus side of workers and additional tax revenue they bring (income/property/sales...)

If a tax discount has positive effects, then it needs to be offered without discrimination. A system where the privileged can get their taxes dismissed is corrupt as hell.


> It's a crazy equation on if it's a good deal or not.
It's just rarely as simple as thinking the government is handing foxconn 4 billion dollars



Foxconn shouldn't get any special privileges, not one dollar! I welcome the competition, but if they cannot do so fairly, then they don't deserve a handout and they don't deserve to be here at our expense. Granting giant corporate subsidies is a total slap in the face to smaller companies who have to work harder and have to pay more to subsidize the largest competitors. This is one of those topics that really gets under my skin.
Permalink - Score: 9
.
Foxconns history
By Windows Sucks on 2018-11-05 02:33:34
They have done this in the past!

The Administration did this to make a quick win like they are about making things happen. Truth is it was BS to make Walker look good and Trump look good!

In the end it’s a flop like the rest of this Administration!

Edited 2018-11-05 02:34 UTC
Permalink - Score: 3
.
RE[2]: Another great word
By Kochise on 2018-11-05 03:19:51
Please let these words come in, that's gems for Scrabble, at least I would have support when I place those unused letters and everybody tells me the combination doesn't makes a real word. Now these are.
Permalink - Score: 3
.
RE[3]: Another great word
By emojim on 2018-11-05 03:51:09
> Please let these words come in, that's gems for Scrabble, at least I would have support when I place those unused letters and everybody tells me the combination doesn't makes a real word. Now these are.

That's when you tell them to stop all the flapdoodle and play their word. ;)

Edited 2018-11-05 03:53 UTC
Permalink - Score: 2
.
RE[3]: Another great word
By judgen on 2018-11-05 06:40:53
My favourite scrabble word is "QUIXOTRY" it is the highest played single turn word in the american championships ever. 365pts
Permalink - Score: 2
.
These corporate subsidies are ridiculous...
By A.Dev on 2018-11-05 10:57:42
Any idiot can see you end up in a race to the bottom.

Companies, perfectly sensibly, play one against the other, do bait and switch and close the plant the minute the subsidies end, moving on to new subsidies.

Politicians are soo easy to manipulate as the other side knows exactly what will play with the electorate.

Politicians involvement is the primary problem with public ownership versus private, it's not public ownership per se.

Now the interesting thing is that as manufacturing becomes more automated - the cost of labour decreases to such an extent that it's not longer cheaper to build in China and ship.(*)

If countries want to compete in high end manufacturing then they would do better putting the money into their universities in my view.


*( The other cost advantage is free waste disposal in the form of environmental dumping - however China are waking up to the true cost of this - they can literally see it with enduring toxic smogs in their big cities ).
Permalink - Score: 3

Read Comments 1-10 -- 11-17

No new comments are allowed for stories older than 10 days.
This story is now archived.

.
News Features Interviews
BlogContact Editorials
.
WAP site - RSS feed
© OSNews LLC 1997-2007. All Rights Reserved.
The readers' comments are owned and a responsibility of whoever posted them.
Prefer the desktop version of OSNews?