The Wisconsin Assembly approved a $3 billion tax break bill for Taiwan-based Foxconn to build a new display panel factory in the state. Source: Assembly Passes $3B Foxconn Incentive Package | Wisconsin Public Radio
I almost never talk about politics here and I try to refrain from headlining a post with a referral to a news story, but this whole Foxconn deal has me rather concerned.
While the governor’s office and the state legislature are collectively wetting themselves over this deal, and are flooding the airwaves with self congratulatory images and stories hyping this whole thing, if you start to look into the deal itself, if you really look into the details of the whole thing, it starts to look more than a little concerning. There is so much misinformation and outright lying going on over this deal it’s hard to keep track of what’s a fact, what’s hyperbole, and what’s an outright lie.
The whole 13,000 jobs claim is, at best, a wild exaggeration, accompanied by rarely mentioned and even deliberately hidden disclaimers of “if this” and “if that” and “maybe”. The actual number of jobs Foxconn is going to develop is 3,000. And even that number is in dispute because if you read the fine print there are a lot of “maybes” and “ifs” buried in that as well.
Then the governor’s office is claiming that the plant will add 22,000 or even as many as 35,000 jobs in associated support industries. That is a number that is wildly exaggerated as well. If the company ramps up to the full 13,000 positions that the politicians are claiming, it might, might result in the creation of 15,000 new jobs in businesses that support the facility.
The state claims that all of this will be watched carefully, largely by the Wisconsin Economic Development Council or WEDC, to make sure they adhere to the terms of the deal. Well, that’s part of the problem. The WEDC has a long history of being utterly incompetent and there are charges of it being actually corrupt because of it’s dealings in the past. It has “lost” loans that it had given out, gave loans and tax deals to people under indictment on criminal charges in other states, given deals to individuals and companies that donated heavily to politicians or to their PACs, given deals to companies that moved jobs out of the state… The list goes on and on. And while the administration claims it’s all better now, recent audits of the organization’s operations indicate that no, it isn’t. It still has serious problems and if it were a department in a business out in the real world, most of them would have been fired for incompetence or even brought up on charges.
The data I’ve been seeing about the actual financial arrangements don’t look very encouraging either. Not only is the state giving the company exemptions from specific taxes, other tax breaks, free infrastructure and dozens of other deals, there are actual cash payments to the company in play as well. If I’m reading this right, not only is the company going to pay virtually no taxes at all, the state is actually going to pay them up to $250 million a year, depending on the number of people it employs.
Then there is the fact that a lot of those jobs aren’t going to be going to people from Wisconsin. The facility is being built down near the Illinois border, and they’re estimating that as many as 40% of the jobs are going to be going to people from across the border.
Then there is the company itself. Let’s face it, this is not a good place to work. They had to put safety nets around their factories in China because employees were committing suicide because of the working conditions. It’s CEO publicly called the company employees animals and said he hired zoo keepers to train his managers in how to deal with the rank and file employees.
This whole deal — I hope it works out, but nothing about this smells right.
grouchyfarmer 