Two recent stories about Foxconn show how that project is, as Willy Shih of Harvard Business School aptly observed, only a state visit project (‘a high-profile way to earn some serious good will and political capital. But as Foxconn worked through the details, I suspect they were having trouble figuring out how to make economic sense of it all’).
For the second time in as many years, the nonpartisan Legislature Audit Bureau is warning the Wisconsin Economic Development Corp. to change its procedures to ensure taxpayers don’t end up paying for work that doesn’t benefit the state economy.
The new audit released Tuesday of the state program created to provide incentives to Foxconn says the agency’s procedures still don’t comply with the state’s contract with Foxconn and state law.
WEDC disagrees. Responding to the review, CEO Melissa Hughes, who took over the top position at the agency in September, said in a letter to state auditor Joe Chrisman that WEDC has “explicitly disqualified any employee who did not perform services in Wisconsin.”
But Chrisman said WEDC’s written procedures don’t achieve that goal.
Hughes said WEDC’s approach prevents credits from being awarded for wages paid to Foxconn employees who don’t live in Wisconsin or a neighboring state. She said state law gives WEDC authority to determine how best to award the credits.
But Chrisman suggested that the WEDC approach is incorrect. State law is silent on whether Foxconn employees must live in Wisconsin to be eligible for credits.
Under its deal with Foxconn, Wisconsin would pay more than $200,000 in state taxpayer money per job created.
Foxconn also whines that – despite supposedly offering a well-considered plan – it turns out that this Taiwanese corporation Can’t Find Enough Workers For Wisconsin Project:
Alan Yeung, Foxconn’s director of United States Strategic Initiatives, said the company has traveled across the country, “from North Carolina, to Illinois, to Michigan, to Ohio and Kentucky” to attract talent to Wisconsin, but it has fallen short.
“Foxconn has been relentlessly visiting colleges around Wisconsin to recruit and hire professionals at the beginning of their careers for roles in Industrial Artificial Intelligence, Smart Manufacturing, 5G Networks and High-Performance Computing,” Yeung wrote in a Nov. 18 letter to Joel Brennan, secretary of the state Department of Administration. “With the low unemployment rate, we have encountered great difficulties in recruiting the talents we need.”
Yeung’s assertion that there are not enough manufacturing workers in Wisconsin confirms an early fear some lawmakers and business owners had about Foxconn — that the state wouldn’t have enough manufacturing workers to accommodate the company.
This state visit project was destined for failure, demographics being only one reason.
There’s a significant local angle in all this. Those in Whitewater who wrongly insisted Foxconn would be a sound project are the same people who’ve persisted in years-long claims that smaller-scale government intervention for their preferred businesses would enrich Whitewater. Before Foxconn, there were years of sugary claims in support of sugary projects that have not improved individual household or individual incomes in the city.
(On the contrary, see Reported Family Poverty in Whitewater Increased Over the Last Decade.)
These same bad ideas still hold some local sway, although not so much as ten years ago; these same men eagerly await another round of ineffective projects funded at public expense.
They’ll do no better in the next decade than they’ve done in the last one.
Previously: 10 Key Articles About Foxconn, Foxconn as Alchemy: Magic Multipliers, Foxconn Destroys Single-Family Homes, Foxconn Devours Tens of Millions from State’s Road Repair Budget, The Man Behind the Foxconn Project, A Sham News Story on Foxconn, Another Pig at the Trough, Even Foxconn’s Projections Show a Vulnerable (Replaceable) Workforce, Foxconn in Wisconsin: Not So High Tech After All, Foxconn’s Ambition is Automation, While Appeasing the Politically Ambitious, Foxconn’s Shabby Workplace Conditions, Foxconn’s Bait & Switch, Foxconn’s (Overwhelmingly) Low-Paying Jobs, The Next Guest Speaker, Trump, Ryan, and Walker Want to Seize Wisconsin Homes to Build Foxconn Plant, Foxconn Deal Melts Away, “Later This Year,” Foxconn’s Secret Deal with UW-Madison, Foxconn’s Predatory Reliance on Eminent Domain, Foxconn: Failure & Fraud, Foxconn Roundup: Desperately Ill Edition, Foxconn Roundup: Indiana Layoffs & Automation Everywhere, Foxconn Roundup: Outside Work and Local Land, Foxconn Couldn’t Even Meet Its Low First-Year Goal, Foxconn Talks of Folding Wisconsin Manufacturing Plans, WISGOP Assembly Speaker Vos Hopes You’re Stupid, Lost Homes and Land, All Over a Foxconn Fantasy, Laughable Spin as Industrial Policy, Foxconn: The ‘State Visit Project,’ ‘Inside Wisconsin’s Disastrous $4.5 Billion Deal With Foxconn,’ Foxconn: When the Going Gets Tough…, The Amazon-New York Deal, Like the Foxconn Deal, Was Bad Policy, Foxconn Roundup, Foxconn: The Roads to Nowhere, Foxconn: Evidence of Bad Policy Judgment, Foxconn: Behind Those Headlines, Foxconn: On Shaky Ground, Literally, Foxconn: Heckuva Supply Chain They Have There…, Foxconn: Still Empty, and the Chairman of the Board Needs a Nap, Foxconn: Cleanup on Aisle 4, Foxconn: The Closer One Gets, The Worse It Is, Foxconn Confirm Gov. Evers’s Claim of a Renegotiation Discussion, America’s Best Know Better, Despite Denials, Foxconn’s Empty Buildings Are Still Empty, Right on Schedule – A Foxconn Delay, Foxconn: Reality as a (Predictable) Disappointment, Town Residents Claim Trump’s Foxconn Factory Deal Failed Them, Foxconn: Independent Study Confirms Project is Beyond Repair, It Shouldn’t, Foxconn: Wrecking Ordinary Lives for Nothing, Hey, Wisconsin, How About an Airport-Coffee Robot?, Be Patient, UW-Madison: Only $99,300,000.00 to Go!, Foxconn: First In, Now Out, Foxconn on the Same Day: Yes…um, just kidding, we mean no, Foxconn: ‘Innovation Centers’ Gone in a Puff of Smoke, Foxconn: Worse Than Nothing, and Foxconn: State of Wisconsin Demands Accountability, Foreign Corporation Stalls.