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‘Inside Wisconsin’s Disastrous $4.5 Billion Deal With Foxconn’

The published case against Foxconn – with reporting & analysis from some of America’s finest journalists and economists – is overwhelming. Their careful, published work has set out the plain facts for well over a year. And yet, as a multi-billion dollar public failure, there are even more startling accounts still emerging.

Austin Carr reports Inside Wisconsin’s Disastrous $4.5 Billion Deal With Foxconn (“A huge tax break was supposed to create a manufacturing paradise, but interviews with 49 people familiar with the project depict a chaotic operation unlikely to ever employ 13,000 workers”):

“This is the Eighth Wonder of the World.”

So declared President Donald Trump onstage last June at a press event at Foxconn’s new factory in Mount Pleasant, Wis. He was there to herald the potential of the Taiwanese manufacturing giant’s expansion into cheesehead country. He’d joined Foxconn Chairman Terry Gou and then-Wisconsin Governor Scott Walker to celebrate a partnership he’d helped broker—“one of the great deals ever,” Trump said. In exchange for more than $4.5 billion in government incentives, Foxconn had agreed to build a high-tech manufacturing hub on 3,000 acres of farmland south of Milwaukee and create as many as 13,000 good-paying jobs for “amazing Wisconsin workers” as early as 2022.

….

Shortly after Trump’s visit, things got worse. A Foxconn manager at the factory, which then had only about 60 people working there, abruptly called about 15 of them—all interns —into a room to say they should seek other jobs because there wasn’t enough work to hire them full time, according to multiple people present. Two sources recall the manager telling the group, cryptically, that there were forces outside the company’s control affecting the Wisconsin project. A number of the interns, who’d received praise from Trump and shaken Gou’s hand just weeks earlier, were stunned. “It was upsetting for people,” says James Pitman, one of the former interns. “They had hyped a lot of shit up. We were used as a publicity stunt.” Foxconn says that’s insulting and that the internships ended as scheduled.

Interviews with 49 people familiar with Foxconn’s Wisconsin project, including more than a dozen current and former employees close to its efforts there, show how hollow the boosters’ assurances have been all along. While Foxconn for months declined requests to interview executives, insiders describe a chaotic environment with ever-changing goals far different from what Trump and others promised. Walker and the White House declined to comment for this story, although a Trump administration official says the White House would be “disappointed” by any reduced investment. The only consistency, many of these people say, lay in how obvious it was that Wisconsin struck a weak deal. Under the terms Walker negotiated, each job at the Mount Pleasant factory is projected to cost the state at least $219,000 in tax breaks and other incentives. The good or extra-bad news, depending on your perspective, is that there probably won’t be 13,000 of them.

(Emphasis added.)

The full, detailed article – over 3,500 words long — is must-reading about Foxconn.

Previously10 Key Articles About FoxconnFoxconn as Alchemy: Magic Multipliers,  Foxconn Destroys Single-Family HomesFoxconn Devours Tens of Millions from State’s Road Repair BudgetThe Man Behind the Foxconn ProjectA Sham News Story on Foxconn, Another Pig at the TroughEven Foxconn’s Projections Show a Vulnerable (Replaceable) WorkforceFoxconn in Wisconsin: Not So High Tech After All, Foxconn’s Ambition is Automation, While Appeasing the Politically Ambitious, Foxconn’s Shabby Workplace ConditionsFoxconn’s Bait & SwitchFoxconn’s (Overwhelmingly) Low-Paying JobsThe Next Guest SpeakerTrump, 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 & FraudFoxconn 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 StupidLost Homes and Land, All Over a Foxconn Fantasy, Laughable Spin as Industrial Policy, and Foxconn: The ‘State Visit Project.’

 

 

4 comments for “‘Inside Wisconsin’s Disastrous $4.5 Billion Deal With Foxconn’

  1. joe
    02/08/2019 at 11:12 AM

    The question that I still don’t have any answer for is why Vos and Fitz were so hell-bent to completely own the Foxconn fiasco. So hell-bent that they enshrined their ownership in the lame-duck session by freezing Evers out of WEDC and doing anything to fix the Foxconn problems.

    It was pretty clear by the election that this deal was a towering brown steaming pile of legendary proportions, and was going to leave a streak on everyone that had anything to do with it. Were V&F really just dewy-eyed Terry Gao fan-boys, or were they trying to build some sort of firewall around something really ugly coming downstream? I tend to favor, without any hard evidence, option B.

    I suspect that we haven’t got anywhere near the whole story yet. Vos and Fitz are likely to have to do a lot more wagon-circling before this is done.

    You told them it was going to suck. Take a bow…

    • JOHN ADAMS
      02/08/2019 at 11:40 AM

      That is a critical question: why so all-in? Your chronology is spot-on, too: by the time of the November election, so many solid national assessments made clear that this was a sham. They could have walked away and blamed Walker. They’ve stuck with this fiasco (even now.)

      It doesn’t seem that it’s just obstinacy, and so your hunch that it’s something else is credible and compelling.

      We’re likely to learn more, and none of it good…

  2. joe
    02/08/2019 at 6:01 PM

    Willy Shih, writing in Urban Milwaukee, has an informative technical article fleshing out what I have been harping on RE: Foxconn Glass.

    https://urbanmilwaukee.com/2019/02/08/why-foxconns-chinese-style-didnt-translate/

    The takeaway is that this was either an astoundingly shoddy job of systems engineering the project, or it was all a scam. Scam is way more probable than Foxconn not knowing how to make LCD displays…

    • JOHN ADAMS
      02/08/2019 at 7:28 PM

      Thanks much for this link. Great reading. Your take on the probabilities is obviously sound, as you’ve previously outlined production requirements (and limitations) of the original, grandiose promises the Walker Admin made for manufacturing at the plant. Walker thought he knew politics well enough to carry him through November, and it seems nothing mattered more to him than that.

      Honest to goodness…