The FoxConn Fiasco

If you live in Wisconsin you might have noticed something rather curious, the state administration’s campaign ads and the administration itself aren’t talking very much about the most high profile financial fiasco scam deal the state has ever been involved with, the $4 billion plus the state promised to shell out in tax breaks, cash payments and other payouts in order to have FoxConn build it’s factory here. This deal was supposed to bring 13,000 high paying jobs to the state, add still more jobs in various support industries, and help to turn the state into the “Silicon Valley” of the midwest.

And the whole thing has turned into a stinking, reeking mess that smells worse than the local manure lagoon.

Exactly what FC is going to be building on that big hole it’s digging down in southern Wisconsin is anybody’s guess right now, but one thing we can be sure of is that it is definitely not going to be the $10 billion “Generation 10.5” facility the company originally promised. Back in May a news service out of Asia claimed that FC was going to be drastically scaling back the whole plan. FC denied this vehemently. But within about two months it finally admitted that the Gen 10 plant was not going to be built. Instead it was going to be putting in a so-called Generation 6 plant, which was about a quarter of the size of the original facility. But it would be building a Gen-10 plant there sometime in the future. Maybe. It would definitely fulfill its promises about the $10 billion investment and 13,000 jobs. Maybe. It would be done in “phases”, though, not all at once. Maybe.

Well, no.

By the end of summer that story had fallen apart as well. An FC spokesperson told a local paper that it was never going to build a Gen-10 plant here because by the time they had it up and running the market would be glutted with product from other makers. And when you consider the fact that FC apparently never even looked into buying the equipment that would have been necessary to build the Gen-10 plant according to industry analysts, and didn’t make arrangements with Corning to build the required glass manufacturing facility on the site (Corning, BTW, refused to build the facility unless the state coughed up hundreds of millions more in tax breaks and cash), and other things that have come to light since this all started, even someone a lot less cynical than I am would suspect FC never intended to build a Gen-10 plant here in the first place.

And then to make things even more interesting, the spokesperson, said that the Gen-6 plant quite probably wouldn’t be in operation for very long, and all those “good paying” assembly line jobs that they were claiming they were bringing to the state, well, there pretty much weren’t going to be any. Eventually what the facility will really do, they said, was to work on the development of FC’s technologies in displays, cellular and computers. The facility will eventually employ 90% “knowledge workers” and only 10% assembly line work, and most of the assembly line work is going to be done by robots, and, well, that pretty much flushes the hope that the company would employ the lower skilled minority workers from south east Wisconsin right down the drain.

The whole plan has simply evaporated in a puff of smoke. The facility they promised isn’t going to be built. The facility they now claim they will build probably isn’t going to actually operate for very long. The 13,000 jobs has now become maybe 2,000 – 3,000, and 90% of them are going to be “knowledge workers” engaging in research and development. And while R&D is enormously important, well, that’s not the 13,000 allegedly good paying blue collar jobs the company promised in order to sell this boondoggle in the first place.

Now there are a few safeguards in place. FC isn’t going to get $4+ billion out of us. But they are still going to get at least $1 billion from the state out of this deal and the state and local governments are still on the hook for tens of millions of dollars in infrastructure improvements. While we, the people of the state are going to get, well, we aren’t sure what we’re going to get yet, but it sure as hell isn’t going to be the deal the administration and FC promised when this all started.

The administration should have known better. Seriously, it should have. About 15 minutes worth of research on Google would have told them that if you’re dealing with FC, well, leave your wallet and credit cards at home, count all your fingers when you get your hand back after you shake hands with them, because they’ve done this before. High profile, high dollar projects have been reneged on in India, Vietnam, Pennsylvania, China … And remember that this is the company that had to install nets around the roofs of buildings on its factories in China because it allegedly treated its employees so badly they were committing suicide by jumping off the roofs.

Yes, this is that company.

Now I’m not saying that the politicians down there in Madison deliberately lied to us about this deal. But, well, let’s face it, this current crop of people inhabiting the state capital aren’t really all that bright, now are they? That’s glaringly obvious from the things they’ve said and done over the last eight or ten years. Their primary focus down there isn’t doing good things for the people of the state, it’s getting their asses re-elected so they can hang onto their little bit of power, cling to their fancy offices, go to “fund raising” events where they can guzzle cheap champagne and get their pictures taken with the rich and powerful, and pad their expense accounts. So when FC came along and dangled all those bright, shiny promises, they bit like a starving fish at a worm, and never noticed the hook. They totally ignored all of the warning signs, totally failed to properly research this, totally failed, well, totally failed at just about everything on this deal. And now they’re off soliciting bribes attending fund raising events, and we’re stuck with paying the bills.

Author: grouchyfarmer

Yes, I'm a former farmer. Sort of. I'm also an amateur radio operator, amateur astronomer, gardener, maker of furniture, photographer.

10 thoughts on “The FoxConn Fiasco”

  1. Imagine what would happen if politicians were competent and honorable. Imagine if they just worked on making things work instead of only focusing on whatever will get them the most attention / cash.
    Mostly, imagine if they were competent. sigh. I long for competence in government.


    1. The country would certainly be a far different place if that were the case. A lot of politicians start out that way, genuinely wanting to do the right thing. But a soon as they get in office they find that the very first thing they need to start doing isn’t being legislators, it’s fund raising for their own re-election campaigns and to fill the coffers of the party they’re affiliated with. Actually doing the job they were elected to do becomes secondary under the enormous pressure from the party bosses to bring in money, and to get that money there is enormous pressure to do “favors” for companies that might contribute to campaigns… The whole process is so fraught with corruption it’s scary. Even worse it’s self perpetuating because the very same people who are responsible for making our laws have no incentive to change and every incentive to keep the status quo in order to keep the money flowing.

      Liked by 1 person

      1. No. It doesn’t do anyone any favors that the election campaigning periods seem to get longer and longer. Ideally we would set a defined period and a defined dollar amount for an election. Each candidate gets X number of dollars. And anything left over gets donated to countries debt, not to the coffers of the candidate.


        1. I certainly agree with that! The campaign season here in the US actually starts the first day after the politician is elected and this is absolutely ridiculous. A lot of other countries have strict time limits. And we badly need to get a handle on spending, especially by outside groups. We’ve had tens of millions of dollars dumped into attack ads here in Wisconsin over the last three or four months, almost all of it coming from sources outside of the state.

          There would be one simple way to curtail a lot of this nonsense with a new law that states something like no one can contribute to a campaign, run ads for a politician or actively campaign for (or against) a politician unless that person or entity actually lives in the district the politician represents.

          Liked by 1 person

    1. Hmm, looks like the system lost my reply again… Oh, well.

      You’re right, of course Sha’Tara. This whole thing really irks me though because these politicians have been so utterly inept at everything they’ve been doing for the last 8 or 10 years… But they really are that stupid down there at the state capital.

      A lot of us saw this FC fiasco coming. This isn’t the first time the state has had this happen. In fact, the agency responsible for this kind of thing, the Wisconsin Economic Development Corporation, is notorious for screwing up this kind of thing. In the last decade or so it’s “lost” government loans it gave to companies, gave assistance to people wanted on warrants for tax evasion and other crimes in other states because they forgot to do background checks, gave assistance to companies to create more jobs which were never created. Heck, one of the recipients of the WEDC’s largess was just convicted for fraud. Corruption, perhaps. But stupidity? Definitely.

      Liked by 1 person

  2. I just listened a podcast (Reply All) reporting on the Foxconn. I felt all kinds of preinformed and intelligent because of your post. 🙂
    They focus on Mt. Pleasant. And interestingly point out that tech factories generally are not long term operations. Because the technology changes so fast and a factory that builds LCDs can’t build OLCD. So if all TVs are suddenly OLCD then the factory is useless. Every innovation requires a new set of machines.
    So – let’s just imagine that Foxconn does build a giant factory and hires 1000s of people to do factory work. The factory definitely won’t last the 30 years necessary for the village to pay off the loans for the subsidies and actually get benefit from the property taxes from Foxconn. Which were, as you know, astronomical.
    Jobs are definitely a good thing. But there is a definite vibe that FC conned Wisconsin.


    1. The whole thing is looking more and more like a con. The 13,000 jobs that were promised are never going to happen. That has now been admitted outright by FC. The Gen-6 plant they are now talking about building will, as you said, be in use for only a few years, IF it is ever built at all because the way they’re talking they don’t even want to be in the flat panel display business at all now. That is directly from a FC executive. The “high paying” blue collar assembly line jobs will never happen. That is directl from FC as well. All those thousands of assembly line jobs have now turned into a few hundred.That was from the same FC executive. Most of the jobs are now going to be for programmers, researchers and engineers, and it’s looking like most of them won’t even be from Wisconsin. Pretty much everything FC told us about the original proposal was an outright lie

      Liked by 1 person

      1. Given their history of con jobs, you would think the subsidies would be small. But it’s the opposite. Greed breed greed and I guess the politicians couldn’t see past the greed.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: