Before and after the recent election, solid assessments on Foxconn came to press, and they confirm how irrational and wasteful is that project. Earlier this year, the local business lobby (the Greater Whitewater Committee) invited the
state capitalist stooge official overseeing the project to a dinner in Whitewater. I’ve no idea whether Matt Moroney will show up for a second dinner, but if they can’t book his return, there are sure to be infomercial salesmen, time-share brokers, or skid row bums who would be both available and seamless replacements.
Joel McNally writes Walker’s Horrendous Foxconn Deal Exposed:
The Tuesday after Election Day was when Amazon announced the grand prize winners of the largest economic development jackpot in American history: New York, Virginia and Tennessee would gain 55,000 high-paying Amazon jobs in exchange for more than $2.4 billion in state subsidies. It didn’t take long for Wisconsin taxpayers to realize exactly what Amazon’s announcement meant for them. They’d been taken to the cleaners by Walker, Donald Trump and Terry Gou, Foxconn’s billionaire chairman. Walker’s deal with Foxconn provides $4 billion in state and local taxpayer subsidies in exchange for an actual guarantee of only 3,000 jobs paying an average of $53,000 a year in a Mount Pleasant electronics plant.
Compare that to the enormous number of higher-paying jobs costing far less for the winners of the great Amazon lottery. Amazon split 50,000 headquarters jobs averaging $150,000 a year, with 25,000 going to New York (which bid $1.5 billion in direct state subsidies) and 25,000 to Virginia (bidding only $573 million in direct subsidies plus infrastructure, transportation and educational improvements). Nashville, Tenn., was a surprise last-minute addition, winning an Amazon operations center providing 5,000 new jobs in exchange for $102 million in state subsidies.
Yang Jie, Shayndi Raice and Eric Morath report Foxconn Considers Bringing Chinese Workers to Wisconsin as U.S. Labor Market Tightens, then Ashley Carman reports Foxconn denies looking to transfer Chinese workers to incoming Wisconsin factory, but finally even the Journal Sentinel‘s house apologist for Foxconn (Rick Romell) writes Foxconn will need engineers from Asia at Wisconsin factory, consultants say.
Professor of Economics Michael J. Hicks writes Wisconsin taxpayers need to pull the plug on this con of a Foxconn deal:
Dismal as that is, the estimate relies on the most optimistic suite of conditions, including the astonishingly hopeful assumption that all the 13,000 workers would reside in Wisconsin. They won’t; the state line with Illinois is less than 20 miles away, and local consulting firm Baker Tilly estimates that as many as half the original 3,000 workers will live in Illinois. The legislature’s study also conveniently failed to take into account the appropriate time value of money, which means they overestimated the future value of the investment.
Neither of these are casual errors. Adjust for more pessimistic assumptions, and the breakeven date for taxpayers on a $3 billion Foxconn deal moves out several hundred years. It is obviously even worse if the subsidy is $4.8 billion.
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, and Foxconn: Failure & Fraud.