Wisconsin Buys Foxconn Facility for Kenosha
I picked up this version 4 BS lies of Trump and Scott Walker’s Imaginary Foxconn Factory on Tom Bozzo’s facebook page where I stopped to see what he had to say as of late. While it is a great attention grabber, a link caught my eye in Wonkette’s article leading to this America and the Foxconn Dream . This morning Ken Thomas has his very thorough analysis Foxconn Cashes in for $3 Billion-Plus: Analysis up. The first being the wonkier, the 2nd is a Bloomberg discussion, and Ken’s is an analysis on a topic he pursues, government subsidizing business. And this one ??? I am not sure yet.
You look at the picture and you see Ryan smirking in the background, a smug looking Trump smug face, and Mr. Terry Gou in a slight bow looking directly at Trump. I have seen the look before. Typically, this look comes from an Asian associate when they have taken what they want at your expense. Trump has been beating the protectionist drum loudly these days when talking to our neighbors Mexico and Canada. He has threatened China and other countries as well.
Mr. Terry Gou the CEO of Foxconn said he would only come to the US if the chosen location met Foxconn’s demands, which of course Walker with the aid of Paul Ryan did do. The facility is located in Paul Ryan’s backyard. And the threat of having tariffs placed on Foxconn products has dissipated. Foxconn will invest $10 billion in a factory some say will be 20 million square feet and create 3000 jobs of roughly 6600 square feet for each US worker. Sounds more like a warehouse to me even if they stuck 160 foreign made robotic manufacturing cells (Tesla did such) in it. More than likely, this will be an assembly operation with components and assemblies coming from Foxconn and Foxconn suppliers. The value-add will be out of country.
So what does all of this get Wisconsin for shelling out $519 per Wisconsin constituent and the US also?
According to Bloomberg’s Tim Culpan; “Wisconsin is paying as much as $1 million per job, which will carry an average salary of $54,000. The state’s economic development corporation is selling the project to taxpayers with a claim that it will create 10,000 construction jobs for building the facility and another 6,000 indirect positions. It is expecting $3.3 million of investment per employee from the Taiwanese company”.
Foxconn does not have a history of doing what it says and agrees to do. In Pennsylvania, Foxconn pledged $30 million to build a plant and hire 500 workers. It never happened. A pledge of $1 billion to build a plant in Indonesia dissipated also. Foxconn’s division Hon Hai has not spent 10 billion in any single year on infrastructure nor has it spent as much if one combines the last five years. Walker’s boondoggle may be mostly hype and a way to insure he is reelected in 2018.
I wonder why Walker is not in the picture with Ryan and Trump? Maybe out building his used car business for when he is not reelected?
While malinformed nonsense such as this seems to be standard from AngryBear, it is disappointing to see it in Bloomberg.
If Foxconn builds its new factory in Ohio or China or doesn’t build it at all how much of that $3 billion in tax rebates will the state of Wisc. keep or not pay to Foxconn? Answer: $ zero.
The ‘subsidy’ is ‘paid’ by Wisc. only to the extent that Foxconn will be liable for the taxes which is ONLY IF it builds its new factory in Wisc.
And you would have us believe you are an economist??
Thank you Mr. Obvious.
This was written based upon Foxconn building the factory in Wisconsin. Bloomberg wrote their piece under the same assumption. I touched upon the issue of it not being built; but apparently you chose not to read that part. In two other instances I know of, Foxconn made plans, and then backed away. The same was listed by Bloomberg and the other blogger.
I can not make it any clearer than what I made it. In any case, much political hay is being made of the “potential” building of the plant in Wisconsin.
Big Ed wants to point out that such deal making indicates nothing about what price Ryan and Walker are willing to pay for optics…whether it happens or not does not take away from breath taking bad judgement on this side of the deal making.
Which was stated in the post and again in the last sentence of my comment. It really has nothing to do with creating jobs as much as creating an illusion.
It was impossible to miss.
As usual Ken had done a marvelous and detailed version. No need for me to duplicate. I just took a more general approach.
The liberals will holding out their hands when the 3 plus billion in tax revenues poor in. Move to Illinois if hate these policies so much.
Walker isn’t in the picture because a jealous liberal took it. Bwah!
Well Mr. Milwaukee:
The state is giving ~$3 billion in tax abatement:
– $1.5 billion in in state income tax credits for job creation.
– $1.35 billion in state income tax credits for capital
– $285 million in a sales tax holiday.
That is the $3 billion I read about and no where does it say there will be $3 billion in tax revenue if Foxconn actually builds. It does say in the $5.7 billion in construction cost, there will be an estimated $181 to $240 million in tax revenue. Roughly 12 years to break even? $3 billion tax breaks
For sure this boondoggle supports Ryan and Walker’s fiscal conservatism policies in the nation and the state as sold by them to the public while they cut support for education and attack healthcare.
“We can only describe this as a gift from Wisconsin taxpayers to Foxconn shareholders,” Mr. LeRoy of the W.E. Upjohn Institute for Employment Research said. “This is a guaranteed loser for the state.”
As far as Illinois, their taxpayers will cross the border and pay Illinois taxes while working at a hopeful Foxconn facility in Kenosha. They do it now.