Foxconn's Wisconsin plant

The Foxconn plant in southeastern Wisconsin is a project to ostensibly build a $10 billion flat screen TV and LCD panel manufacturing plant in Mount Pleasant, Wisconsin that was originally slated to employ 13,000 people. The state of Wisconsin had made an agreement with Foxconn whereby the company would receive subsidies ranging from $3 billion to $4.8 billion (paid in increments if Foxconn met certain targets), which would have been by far the largest subsidy ever given to a foreign firm in U.S. history. The factory was set to start production by the end of 2020 but as of December 2019 construction had yet to begin.[1]

History
Foxconn groundbreaking with President Trump, Governor Walker, House Speaker Paul Ryan, and CEO Gou

The Scott Walker administration in Wisconsin approved an agreement with the Taiwanese manufacturer Foxconn to build a plant in Racine County. As part of the agreement, Foxconn was set to receive subsidies ranging from $3 billion to $4.8 billion (paid in increments if Foxconn met certain targets), which would be by far the largest subsidy ever given to a foreign firm in U.S. history.[2][3][4][5] Foxconn said in return that it would set up a $10 billion factory that initially employed 3,000 (set to increase to 13,000 by as early as 2022).[2][6][7]

Numerous economists expressed skepticism that the benefits would exceed the costs of the deal.[6][8][9][10][11][12] Wisconsin’s nonpartisan Legislative Fiscal Bureau estimated that the Foxconn plant investment would not break even until 2043, and that was in the best-case scenario.[13] Others noted that Foxconn had in the past made similar claims about job creation in various localities which did not turn out to be true.[2][14][4]

Foxconn sought to locate a plant in the Great Lakes region, because it needed access to large amounts of water.[4] The other Great Lakes states were not willing to offer as generous subsidies as Wisconsin.[4]

Initially, the subsidies were set at $3 billion, which would have cost the state $231,000 per job created (under the assumption of 13,000 jobs).[6] The cost of the subsidies were higher than yearly state funding for the University of Wisconsin system and the state prisons.[6] Other estimates of the subsidies go as high as $4.8 billion, which meant that the cost of the subsidy per job (assuming 13,000 jobs) was more than $346,000.[2] Depending on how many jobs are created, the cost per job may go as high as more than a million dollars.[5]

Walker exempted the firm from Wisconsin's environmental rules regarding wetlands and streams.[15][4] Walker and the Trump administration rolled back air pollution limits in the area of the plant, overruling objections of Environmental Protection Agency staff.[5][2][16] The plant was estimated to contribute significantly to air pollution in the region.[17] Environmentalists criticized the decision to allow Foxconn to draw 7 million US gallons (26,000 m3) of water per day from Lake Michigan.[4] The roughly 4 square miles (10 km2) of land necessary for the Foxconn campus was in part made possible by forcing homeowners to sell at a fixed price under the threat of seizing the land under eminent domain.[5]

In 2018, the Walker administration shifted up to $90 million in local road funding to road work related to the Foxconn factory.[18] The Wisconsin state legislature granted Foxconn special legal privileges within the Wisconsin judicial system.[5] In June 2018, President Trump praised the plant, describing it as "the Eighth Wonder of the World."[7] At the end of 2018, Foxconn did not qualify for $10 million in subsidies, as it created only 156 of the 260 jobs required under the agreement.[19]

In January 2019, Foxconn said it was reconsidering its initial plans to manufacture LCD screens at the Wisconsin plant, citing high labor costs in the United States, and that it would hire mostly engineers and researchers, rather than manufacturing workforce.[20] In February 2019, Bloomberg News reported that the plant was "unlikely to ever employ 13,000 workers."[7] In an interview in July 2019, Governor Tony Evers said that Foxconn told him the factory would open by May 2020, but would employ only 1,500 workers.[21]

In January 2020, construction work on some buildings was continuing, and Foxconn's founder Terry Gou insisted the factory would be operational within 2020.[22] As of April 2020 any buildings that Foxconn owns in Wisconsin are still completely empty.[23]

In April 2020, Foxconn announced plans to make respirators in partnership with Medtronic at the Wisconsin Foxconn plant in response to the COVID-19 pandemic.[24]

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References
  1. Dzieza, Josh (2019-12-13). "Exclusive: documents show Foxconn refuses to renegotiate Wisconsin deal". The Verge. Retrieved 2020-04-14.
  2. Rushe, Dominic (2018-07-02). "'It's a huge subsidy': the $4.8bn gamble to lure Foxconn to America". The Guardian. ISSN 0261-3077. Retrieved 2018-11-02.
  3. "$3B to Foxconn largest state 'gift' to a foreign company?". @politifact. Retrieved 2018-11-02.
  4. "Wisconsin's $4.1 billion Foxconn factory boondoggle". The Verge. Retrieved 2018-11-03.
  5. "Did Scott Walker and Donald Trump Deal Away the Wisconsin Governor's Race to Foxconn?". The New Yorker. Retrieved 2018-11-06.
  6. "Foxconn announces $10 billion investment in Wisconsin and up to 13,000 jobs". Milwaukee Journal Sentinel. Retrieved 2018-11-02.
  7. "Inside Wisconsin's Disastrous $4.5 Billion Deal With Foxconn". www.bloomberg.com. 2019. Retrieved 2019-02-10.
  8. "The Geography of Need and the Foxconn Deal in Wisconsin | Econofact". Econofact. 2017-08-28. Retrieved 2018-11-03.
  9. Hicks, Michael J. "Wisconsin taxpayers need to pull the plug on this con of a Foxconn deal". MarketWatch. Retrieved 2018-11-03.
  10. "Chowdhury: The hype and the reality of the Foxconn deal". Milwaukee Journal Sentinel. Retrieved 2018-11-03.
  11. Dorfman, Jeffrey. "Government Incentives To Attract Jobs Are Terrible Deals For Taxpayers". Forbes. Retrieved 2018-11-03.
  12. "Wisconsin's Deal With Foxconn Was as Bad as They Come". www.bloomberg.com. Retrieved 2018-11-06.
  13. "Wisconsin won't break even on Foxconn plant deal for over two decades". The Verge. Retrieved 2018-11-03.
  14. Griffiths, James. "Foxconn invests in Wisconsin: Workers 'should be wary'". CNNMoney. Retrieved 2018-11-03.
  15. Steven Verburg (August 20, 2017). "Broader relaxation of environmental rules seen coming from Foxconn". Wisconsin State Journal.
  16. "Illinois officials concerned over Foxconn plant impact". AP NEWS. 2018-06-13. Retrieved 2018-11-03.
  17. "Foxconn industrial operations would represent a major new source of air pollution in region". Milwaukee Journal Sentinel. Retrieved 2018-11-03.
  18. "Wisconsin is shifting up to $90 million in local road funding to Foxconn-related projects". Milwaukee Journal Sentinel. Retrieved 2018-11-03.
  19. Cohn, Scott. "Wisconsin governor says Foxconn is again likely to miss job targets". CNBC News. Archived from the original on 2019-07-23. Retrieved 2019-07-24.
  20. "Exclusive: Foxconn reconsidering plans to make LCD panels at..." Reuters. 2019-01-30. Retrieved 2019-01-30.
  21. Cohn, Scott (2019-07-09). "Wisconsin governor says Foxconn is again likely to miss job targets". CNBC. Retrieved 2020-02-16.
  22. Lovejoy, Ben (2020-01-22). "Wisconsin plant will open this year, insists Foxconn". 9to5Mac. Retrieved 2020-02-16.
  23. Dzieza, Josh (2020-04-12). "Foxconn's buildings in Wisconsin are still empty, one year later". The Verge. Retrieved 2020-04-14.
  24. "Taiwan's Foxconn says to make ventilators with Medtronic". Reuters. 2020-05-07. Retrieved 2020-04-17.

Further reading

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