How Trump’s FoxConn Deal Conned Wisconsin Out Of Billions
The Foxconn deal — Wisconsin’s ill-fated giveaway of billions of dollars to a Taiwanese electronics giant — is irretrievably broken.
That’s not an outside opinion. That’s the conclusion of a report commissioned by the state of Wisconsin.
Wisconsin agreed to give the company $4 billion in tax credits in return for Foxconn building a factory in the state. Foxconn promised to create 13,000 jobs, which sounds impressive until you do the math: It meant Wisconsin would be paying over $230,000 for each of the jobs, which are expected to pay an average of around $54,000 a year.
The whole deal was a GOP invention. Trump bragged that the deal was only happening because he got elected. Scott Walker, the then-governor of Wisconsin, orchestrated the multibillion-dollar giveaway.
The deal almost immediately fell apart, with Foxconn Chair Terry Gou admitting the company had no intention of building the promised LCD panels in the United States. The square footage of the proposed factory drastically decreased, dropping from 20 million to under 1 million. The promised jobs plummeted from 13,000 to 1500. And then Foxconn decided it might not be a factory at all, which means it wouldn’t provide the blue-collar jobs Walker and his cronies promised. Foxconn floated having a high-tech research facility instead.
In light of all this, the Wisconsin Department of Administration requested a report to look at the economics of the deal in light of the stripped-down factory plans.
The conclusions were not good. Having a smaller facility with fewer jobs means the amount the state is spending per job increases. In fact, the report found that, if the factory employed 1500-1800 people, the cost per job would be a staggering $290,000. And even those decreased job numbers still appear wildly optimistic. At the end of 2018, Foxconn employed 156 people in the entire state.
With that, the deal no longer seems viable for Wisconsin, so they’re hoping to get Foxconn back to the bargaining table and hammer out a different deal. The report notes that a Foxconn representative met with current Democratic Gov. Tony Evers to talk about possible adjustments. However, Foxconn can’t help itself from asking for more: They’re hoping to have a longer time to qualify for capital investment tax credits.
In the end, this is just another Trump-related deal gone horribly wrong. Trump and Walker made flashy promises, gave away billions of dollars, and left the taxpayers holding the bag.
Published with permission of The American Independent.