New Report Further Clarifies Foxconn's Wisconsin Deal Was An Unsustainable Joke
from the grifters-ahoy dept
It hasn't taken long for Trump's and Paul Ryan's once-heralded Foxconn factory deal in Wisconsin to quickly devolve into farce. The state originally promised Taiwan-based Foxconn a $3 billion subsidy if the company invested $10 billion in a Wisconsin LCD panel plant that created 13,000 jobs. But as the subsidy grew to $4.5 billion the promised factory began to shrink further and further, to the point where nobody at this point is certain that anything meaningful is going to get built at all.
Reports last fall detailed the ever-shrinking nature of the deal, and how Foxconn was using nonsense to justify its failure to follow through, claiming it was building an "AI 8K+5G ecosystem" in the state to somehow make everything better. But the buildings Foxconn have purchased remain largely empty and the lion's share of the company's promises unfulfilled, despite mounting taxpayer cost.
Fast forward to this week, when an analysis of the cost impact of the downsized project basically concluded what most knew all along: the deal was never going to work as structured, and throwing taxpayer funds at Foxconn isn't likely to pay dividends. And while there's still the possibility some jobs get created (assuming the company actually builds anything of note), the math still doesn't add up:
"If the subsidy levels in the current contract are kept, each Foxconn job would cost taxpayers about $290,000, Bartik found, compared to $172,000 if Foxconn built the original $10 billion, 13,000-job facility. For comparison, Bartik estimated the subsidies Virginia offered Amazon for its second headquarters amounted to between $10,000 and $13,000 per job.
"The most important conclusion of this analysis is that it is difficult to come up with plausible assumptions under which a revised Foxconn incentive contract, which offers similar credit rates to the original contract, has benefits exceeding costs,” Bartik wrote. “The incentives are so costly per job that it is hard to see how likely benefits will offset these costs."
That is, if you're playing along at home, a polite way of saying the deal was bullshit. The game for Foxconn will now shift toward restructuring the deal to not only make it more realistic, but to ensure Foxconn can't be held liable for effectively bullshitting taxpayers out of billions. The Verge reporter Josh Dzieza has been doing a phenomenal job clearly highlighting the ever-shrinking nature of the deal:
"Rather than a 20 million-square-foot factory manufacturing large LCD screens, Foxconn says the factory it’s now building will be less than 1 million square feet and make smaller screens. While the company had initially planned to employ 5,200 people by next year, it now says the new factory will employ only 1,500 people. Even that seems like a stretch goal: at the end of 2018, Foxconn employed only 156 people in the state."
Of course getting billions in taxpayer subsidies for doing nothing isn't unique in American industry. Just ask the telecom sector, which has received countless billions over the last few decades for fiber optic networks they only half constructed. This scandal, like that one, likely ends in deep-pocketed campaign contributions ensuring that nobody in this chain of dysfunction sees anything even vaguely resembling genuine accountability for promises they likely knew would never fully materialize from the start.
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Filed Under: grifters, paul ryan, scott walker, wisconsin
Companies: foxconn
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Look, over there...now check out our awesome proposal
This sounds like the benefits given to video (movie/TV) production companies that promise jobs, which turn out to be part time and/or temporary. The end result benefit to the community is significantly less than any economic improvement promised by the outside entity. When will states/communities learn about bait and switch or the flashing bogus promises for what they are?
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Re: Look, over there...now check out our awesome proposal
They won't learn as long as the "campaign donations" keep pouring in!
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you all got conned by a fox
If the subsidy levels in the current contract are kept, each Foxconn job would cost taxpayers about $290,000, Bartik found, compared to $172,000 if Foxconn built the original $10 billion,
Seems it would have been more cost effective for the state to make its own plant and jobs at least then you know you are only getting bullcrap from your local people.
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Re: you all got conned by a fox
With those numbers, it would've been more cost effective for the state to hire the 13,000 people to do absolutely nothing.
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Re: Re: you all got conned by a fox
For $3 billion imagine how many homeless people they could house. Or just give $50,000 to 60,000 people. But no, that would be socialism!
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the most important thing out of all this is that a company gets a whole load of tax payer money, for free, for doing nothing except ensuring the single thing that Trump has been most interested all along, making sure companies top execs everywhere in the USA get massive salaries! i'll bet a dime as well that the twat who signed it on behalf of Wisconsin, got a nice lot of 'campaign contributions' so didn't give a toss how much public money was wasted!
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Did Wisconsin actually pay any of the subsidy? I know generally these are tax credits that offset property taxes, and not simply checks written to company, but I don't know how much in taxes Foxconn pays currently to the state, and if they had, how many years back they might go in providing the credit.
It's always been a similar question I had when undocumented immigrants were able to claim the child tax credit. It was always depicted as free money to people, but if you have no declarable income, and you get a tax credit, will the government simply cut you a check? I somehow doubt that.
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Re:
The biggest concern is that a small town of 26,000 people borrowed nearly a billion dollars based on the property taxes FoxConn would pay on a 10 billion dollar plant(now 1 billion, maybe) to pay for the 2000 blighted(perfect farmland) acres and the upgrades to utilities and roads. This is 5 miles from me and is a messed up deal. Theyve already leased back a 1000 acres to the farmers they purchased the blighted property from...They forced out families that had been there for generations for this debacle for (imo) 7 million gallons of water a day and the ability to circumvent the pollution standards due to laws passed by the current executive branch of the USA and the previous Administration of Wisconsin since the contract was written on a napkin in 2017.
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Sounds like needs to learn how to write proper contracts.
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Re:
Why? The contract has done exactly what was intended. Wealth has been shifted from the taxpayers/state to the corporation and politicians. You didn't think this was actually supposed to benefit the peons did you? Let them eat cake.
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This sounds an awful lot like the dreaded socialism I keep hearing about.
I am curious, why is it being promoted by those who vigorously proclaim their disdain for the dreaded socialism?
It appears that some feel socialism is ok for rich folk and no one else, they feel everyone else has a patriotic duty to struggle in a capitalistic hunger games environment.
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Re:
It's Doublespeak, AC, where "Socialism" means "Anything other than transferring money from the poor to the rich for zero compensation is morally dubious."
They don't want to give us a leg up, they want to chop our legs off and boil them down for soup, or something. We don't matter to them.
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Re:
"Privatizing profits and socializing debt."
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Re: Re:
"privatizing profits and social Debt"
Is about right.
WHY are we responsible for the corps if they DONT LISTEN TO US..
They dont even listen to their Own Stockholders.
the Old ideals of econo are gone, its Profit or nothing. And if its Nothing, they will CUT and DUMP it all.
And will LLC...they can leav e ALL th debt created, and non of the profits and Run.
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Bait and switch...no contracts,
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Re: Bait and switch...no contracts,
lets see..\
cost evaluation..
Glass,plastics, metals,Chemicals..
Probably 10 times the price of any other nation.
Forget sourcing in in the USA, esp with some pollution laws.
Everything gets shipped in. so 2 times the price of building it in the ROC.
Then wages. With our laws, its not going to be cheap.
Import laws are interesting in the USA. If you didnt know.
We are only supposed to tax good that are Equal to what the nation is making. So if this nation isnt making LCD screens, they can sell them at any price. If we do make them here, we can Add a Tax to it(dont care what you want to call it, its a TAX) to raise the prices, Just abit, Over the prices we make them here.
the only reasons to build things in the USA, is because you can Cut costs in the USA market. if its not any cheaper, Why do it here?
Building cars from other nations here, is cheaper, then Limiting, the number of Cars you can put on a ship, they can send TONS of parts here, and double/triple/... the amounts, by putting the together here..
And there are NOT supposed to be Taxes on PARTS.
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What is this? Another Orange man hit piece?
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Re:
Seems on par with most of trumps business dealings before he was in office. But I'll be fair and say democrats are also stupid on occasion, this time just happened to be a republican cluster fuck.
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Re:
You paid shills so busy trying to cover this administrations dumpster fires, the best you can do is a one line copy paste?
Don’t answer, we know you’re already 2/3 the way into your second shift bro.
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Re:
"What is this? Another Orange man hit piece?"
Orange Man hit pieces seem to write themselves these days.
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Re: what are you?
I'd say someone who does not act based on actual facts.
Foxconning was going on before Trump was selected.
But, perhaps, you saw Trump with a shovel taking credit for what others did and now you make your claim of "orange man hit piece".
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I think everyone involved knew this was going to be the outcome of this deal. It was a bunch of republican politicians throwing a handful of shiny pennies to the serfs ahead of an election so they can say 'Look what we've done for you! New jobs! Bright future! Vote for us, though it doesn't matter all that much if you do because we've gerrymandered Wisconsin to such a degree we'll lose and still win the majority of seats, and if we somehow lose a race we'll change laws on the way out to make sure the democrats can't do anything.'
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Ignorance Always Has Friends
The Foxconn plant has been a moving target, but it does not take a lot of mental horsepower to comprehend that Foxconn only gets the money if they do the jobs. To keep bringing up the billions in dollars of subsidy is an attempt to paint a false portrait. Time will tell if this ends up working out, but in the mean time, I guess it gives a bunch of people with nothing better to do something to rant about.
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Re: Ignorance Always Has Friends
Now if the politicians weren't already trying to take credit for making non-existent jobs based on a constantly worsening deal I would agree with you.
But the problem is they started this deal and took credit for something that is worsening by the day and not caring what happens because they already got their votes out of the deal.
Since elections are coming up where people get to semi-hold accountable politicians for the garbage they spew, it pays to be knowledgeable about the status of the incredible deal those politicians made in the first place.
Except that you ... SQUIRREL!
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Re: Re: Ignorance Always Has Friends
Indeed, bob. And I can't help thinking that the clue was in the name... but there you go.
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Anybody else for getting the government out of the business of making these kinds of deals? Obviously it is incompetent at it.
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Re:
Agreed. The way I see it, if you have to offer a subsidy to get a company to set up in your location, all the company will be interested in is getting the subsidy.
Companies exist to make money, that's all. If they can't make money off the products and services they provide, they can't make money.
Any subsidies should be paid retrospectively on completion of stages agreed beforehand; i.e. if they don't get the factory built on time in the manner promised, it's all on them. If they don't set up the number of jobs as agreed, it's all on them. Don't. Reward. Failure.
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another day, another big cash rip-off at tax payer's expense
Them folks do indeed be very Foxy-Conn-artists. Betcha 25% of that money has landed in the pockets of US politicians. US citizens are such a hoot to scam for big bux. Specially since members of the US government are always willing to lend a hand for a cut of the take. A nation of uninformed, over-taxed suckers, just begging to be bled dry by foxy cons and greedy pols. :)
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