Foxconn's $10bn move to the US is not a reason to celebrate
"Fact checking President Trump's repeated claim of credit for Foxconn's deal in Wisconsin"
The company doesn’t have a great track record of keeping its job-creation promises, for one. Then there’s the issue of worker conditions in China
Zoe Sullivan
Sat 29 Jul 2017 07.00 EDT Last modified on Thu 5 Jul 2018 16.49 EDT
Foxconn chairman Terry Gou, left, and governor Scott Walker hold the Wisconsin flag to celebrate the company’s $10bn investment to build a display panel plant in Wisconsin. Photograph: Mike De Sisti/AP
The announcement by the Taiwanese giant Foxconn that it will build an LCD-manufacturing facility in Wisconsin worth an estimated $10bn was met with considerable fanfare.
But the state has a troubled history in matters of economic development, and the company, a supplier to Apple, Google, Amazon and other tech giants, has a lackluster record when it comes to fulfilling its promises. The news should raise red flags.
The deal, backers say, will create 13,000 jobs in six years – in return for a reported $3bn in state subsidies. Only 3,000 of those jobs will come immediately. Furthermore, the Washington Post has reported that Foxconn has a track record of breaking such job-creation promises. In 2013, the company announced plans to hire 500 people and invest $30m in Pennsylvania. The plan fizzled out.
Wisconsin’s Republican governor, Scott Walker, was elected in 2010 on a campaign pledge to bring 250,000 jobs to the state. So far he has fallen short. A successful Foxconn project would be a major step towards repairing his damaged credibility.
On Friday, he had a rejoinder for doubters of the project. At a stop in Eau Claire as he toured the state to promote the deal, the governor said: “There’s a whole lot of people out there scrambling to try and come up with a reason not to like this. I can tell you, that’s fine but I think they can go suck lemons.” Life and death in Apple’s forbidden city
The plan has been touted as a big win not just for Walker, but also for House speaker Paul Ryan – whose district is likely to host the proposed plant – and Donald Trump. In a press briefing, a senior administration official said the announcement was “meaningful”, because “it [represents] a milestone in bringing back advanced manufacturing, specifically in the electronics sector, to the United States”.
Trump appealed to workers affected by the decline in US manufacturing during his campaign, with his signature promise to “make America great again”. He has pointed to bad trade deals as a significant reason for the country’s economic problems, saying he could do better.
At the White House on Wednesday, the president said: “If I didn’t get elected, [Foxconn] definitely would not be spending $10bn.”
"But here's the rub: Foxconn has been making plans to expand in the U.S. as early as 2012. Three Pinocchios "
Ryan said the announcement demonstrated the president’s commitment “to driving American manufacturing and bringing new jobs home”.
Big claims have been made. Earlier this week, Trump told the Wall Street Journal that Apple has plans to build three factories in the US. Apple has not confirmed the claim. Walker has dubbed the area of his state where the Foxconn plant will be located “Wisconsin Valley”.
Jennifer Shilling, a Democratic Wisconsin state senator, criticised the deal.
“The bottom line is this company has a concerning track record of big announcements with little follow through,” she said. “Given the lack of details, I’m skeptical about this announcement and we will have to see if there is a legislative appetite for a $1bn-to-$3bn corporate welfare package.”
The Wisconsin legislature is controlled by Republicans. They will not need bipartisan support to pass such subsidies, most likely outside the budget process.
Inside China's 'big data valley': the rapid hi-tech transformation of Guiyang [ > Although big data investment into Guizhou almost doubled last year, the landlocked province’s growth is also down to much-needed infrastructure. Guiyang now has a modern railway station and international airport, with another 10,000km of highway and 4,000km of train tracks planned to complete by 2020. There have also been efforts to boost Guizhou’s tourism, which draws more than a million international visitors each year, according to officials, and many millions of domestic tourists. > This growth is inevitably transforming life for city residents. Programmes to improve housing saw 458,000 people resettled into new homes in 2016, and the government says it lifted 1.2 million Guizhou people out of poverty last year alone. [...] > New districts also need to prove they can spread the wealth. Guizhou is home to more impoverished people than any other province, and more than one million residents live on less than 2,300RMB a year – about 50% of China’s national average.] Read more > https://www.theguardian.com/cities/2017/jul/13/china-big-data-guiyang-rapid-transformation-tech-hub
Press kit materials said the Wisconsin plant, which would cover an area three times the size of the Pentagon in Virginia, would be one of the largest foreign investments in US history, in terms of job creation.
The touted average salary, plus benefits, was $53,000. The offices of the majority leader of the Wisconsin state senate and Walker did not respond to questions about what kinds of jobs these would be or what kind of training would be required. Foxconn, which produces screens and assembles cellphones and computers, is particularly known for its work with iPhones.
The Wisconsin Economic Development Corporation (WEDC) is a participant in the Foxconn deal. During Walker’s brief presidential run, it was dogged by questions over failed loans. Businessman and Republican donor Ron Van Den Heuvel .. http://www.wisconsingazette.com/news/rewind-another-year-another-wedc-scandal/article_dea3fb6f-3c69-52d1-8b06-a38a1750a1c5.html .. was indicted for fraudulently borrowing $700,000 from a local bank. Months after WEDC was created in 2011 the agency, then led by Walker, lent him more than $1.2m, without performing a background check.
Six states were reportedly negotiating with Foxconn. Pointing to property tax breaks and job-training costs, Joe Peacock of the Wisconsin Budget Project warned that the total cost of winning the race could exceed $3bn. Similar deals, he said, often end up as a “zero-sum game” for states.
Speaking on conservative talk shows the day following the announcement of the deal, Walker said “clawbacks” and “safeguards” were in place.
“It certainly is my fiduciary role to protect taxpayers in the state,” he said.
Molly Stentz contributed research
This piece was amended on 29 July 2017. It initially said Foxconn was a Chinese company. It is based in Taiwan.
Foxconn scales back plans for its first factory in Mount Pleasant
Rick Romell, Milwaukee Journal Sentinel Published 8:21 a.m. CT June 28, 2018 | Updated 8:10 p.m. CT June 28, 2018
VIDEO - Drone video as construction continues on the Foxconn site south of Braun Road in Mount Pleasant. Mike De Sisti and James B. Nelson, Milwaukee
(Photo: Alex Brandon, Associated Press) CONNECTTWEETLINKEDIN 56 COMMENTEMAILMORE
The Foxconn Technology Group manufacturing complex that President Donald Trump helped launch Thursday in Mount Pleasant will differ significantly, at least initially, from the original plans.
While two economic-impact analyses prepared last year and the state’s contract with Foxconn say the company will build a type of factory that carves display panels out of immense sheets of wafer-thin glass, Foxconn now says it first will erect a plant that uses much smaller sheets of glass.
Such factories typically are much smaller and less-expensive than the sort of plant Foxconn originally planned, industry observers say.
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