Wisconsin is taking a big leap of faith and cash to lure Foxconn. Far from providing a model to bring back manufacturing jobs, it’s offering a master class in corporate welfare.
Considering that Washington state handed Boeing the largest state tax break in U.S. history, a move I supported at the time, you might find it odd that I would pick nits with Wisconsin’s subsidy-fueled “win” of a Foxconn factory. But who better to critique the kettle’s color than the pot?
Late last month, the Taiwan-based electronics manufacturer announced the deal at a White House ceremony trumpeted by President Donald Trump and attended by Wisconsin’s union-busting Republican Gov. Scott Walker. It promised a $10 billion investment to build its first major U.S. factory, creating 3,000 jobs. This seemed to validate Trump’s promise to return manufacturing jobs to the U.S., even though his earlier Carrier stunt turned to ashes.
Details of Wisconsin’s, er, bargain for the flat-screen plant are now more transparent. The state would give Foxconn more than $3 billion in incentives, not including other local incentives. It’s more than forgoing tax revenue. Wisconsin would be required to pay the company from $200 million to $250 million a year. Foxconn would avoid an environmental impact statement and sidestep a number of environmental protections imposed on other companies, including requirements that protect wetlands. Wisconsin must police whether Foxconn is living up to its promises — in a state where Walker has made sport of making war on state employees.
Foxconn commissioned an Ernst & Young report saying it could ultimately create 13,000 jobs — if so, the cost of the package would only be $230,700 per worker. A large network of suppliers could follow. Could. As the state legislature considers the
ransom incentive package, Foxconn dangled the possibility of a second plant in Wisconsin.
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But as the Tech Crunch blog noted, Foxconn CEO Terry Gao “is in the habit of promising big and rarely delivering.” This is also a company, making devices for such giants as Apple and Amazon, that was notorious for employee suicides at its high-pressure factories in China. It is also on a serious race to replace humans with robots and could become the first major manufacturer with so-called dark plants — factories that operate entirely automated, no need to even turn on the…