Trump called Foxconn’s Wisconsin factory an ‘incredible investment’— but evidence is mounting that it’s a terrible deal (AAPL)

Donald Trump Terry Gou

Foxconn is currently building a giant factory complex in Wisconsin, powered partially by $4.5 billion in taxpayer subsidies.
But Foxconn is increasingly backing away from some of its promises to Wisconsin politicians and President Donald Trump.
Wisconsin could be subsidizing Foxconn up to $1 million per job created, according to the New Yorker.
Now Foxconn is looking to bring Chinese engineers over to the United States because it can’t find enough skilled workers for the plant, the Wall Street Journal reported.

Foxconn chairman Terry Gou didn’t become one of the most powerful people in technology by being bad at negotiating.

And increasingly, it seems like he and his company, which manufactures electronics like the Apple iPhone and Microsoft Xbox, negotiated a stunning package to build a 21.5-million-square-foot factory complex in Wisconsin.

In exchange for building that massive factory, which Foxconn said at the time could create 13,000 blue collar jobs, the Taiwanese electronics giant received:

$4.5 billion in taxpayer subsidies, most of it in “direct cash payments from taxpayers.” That works out to between $220,000 and $1,000,000 per job created.
An exemption from limits on smog pollution and other environmental rules, allowing it to reroute streams during construction and operation, and including an exemption from filing an environmental impact statement.
Special court privileges, including the ability to appeal directly to the Wisconsin Supreme Court.
Expanded eminent domain privileges which may help the government seize the property of remaining holdouts who do not want to sell their properties to Foxconn.

In total, the factory will cost $1,800 per Wisconsin household, according to the New Yorker.

But Foxconn promised 13,000 jobs before it started rolling back the scope of the facility, according to a report in The Verge. All of a sudden, the promised 13,000 jobs seemed like a reach goal, one that might never be met.

In May, it was revealed that Foxconn had scaled back its plans. Instead of producing giant, 10-foot by 11-foot panels for televisions, it would create smaller glass panels for smartphones and displays. Eventually, Foxconn officials said, it might make the “Gen 10.5” plant originally promised, but it might take a while.

Six weeks later, the same Foxconn official backtracked. Foxconn could never build the plant it originally promised, because of competition from China. Instead, the Wisconsin factory would focus on “AI 8K+5G,” a change that would mean that the plant would employ “10 percent assembly line workers, 90 percent knowledge workers,” and would rely heavily on automation.

And on Tuesday, the Wall Street Journal reported that Foxconn is likely to bring in employees from China to help staff the plant, beacuse it can’t find enough skilled engineers in Wisconsin. In a statement, Foxconn told The Journal it still plans to hire 13,000 workers.

‘Mr. President, the eagle flies’

The Wisconsin factory was the culmination of a secret bidding war between states to offer as many incentives as possible. Wisconsin officials told subordinates to monitor the packages other …read more

Source:: Businessinsider – Politics


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