Corruption

Foxconn Tries to Gaslight Wisconsin

SK Ashby
Written by SK Ashby

Former Wisconsin Governor Scott Walker signed an insanely generous package of tax breaks worth billions for Taiwanese manufacturing giant Foxconn and, as you probably recall, the deal stipulated that Foxconn would build a large factory for producing LCD displays. This was suppose to generate up to 13,000 permanent, good-paying jobs and transform the pocket of Wisconsin that former House Speaker Paul Ryan calls home.

But for various reasons that we discussed here when the deal was originally proposed and signed, the numbers never added up nor did the plan to manufacture obsolete LCDs as part of a development deal that wouldn't mature until the mid 2040s when it would supposedly pay for itself. Foxconn hasn't lived up to literally any part of the arrangement yet and that led to Scott Walker's defeat in 2018.

Now, because Foxconn hasn't held up their end of the bargain, Governor Tony Evers' administration has yanked their tax breaks, but Foxconn is now arguing that they never actually promised to build a factory.

From The Verge:

Documents obtained through a records request show Foxconn’s rationale: it doesn’t think it was specifically promising to build an LCD factory at all. According to a November 23rd letter to the Wisconsin Economic Development Corporation (WEDC), Foxconn does not think the factory specified in the contract, an enormous Generation 10.5 LCD fabrication facility, was actually a “material” part of the contract. (“Material” is a legal term that means relevant or significant.)

Rather, Foxconn claimed it and [Wisconsin Economic Development Corps] WEDC had a “mutual understanding” that it would build something more vaguely defined, “a transformational and sustainable high-tech manufacturing and technology ecosystem in Wisconsin that brings long-term investment and jobs.” However, Foxconn did express openness to amending its contract to allow for more flexibility in what it was building in exchange for lower subsidies.

Foxconn’s letter was written in response to repeated requests from WEDC to explain why exactly Foxconn was objecting to WEDC’s denial of subsidies. “Your notice of objection stated that there are numerous grounds on which the Recipients object, but it did not detail what those were,” a WEDC lawyer wrote to Foxconn earlier in November.

WEDC is standing by its denial of subsidies.

Although the state has pulled back Foxconn's future subsidies, the state has already invested a massive, sunk cost into development for the large LCD factory that is never coming.

Building a factory that would employ 13,000 people was the whole idea and the state spent hundreds of millions of dollars evicting people from their homes and expanding local infrastructure to accommodate this bridge to nowhere. Sewers were expanded, roads widened, and highway connections were added.

I'm aware that Foxconn has a reputation for running shell games like this around the world, but seeing it happen here in slow motion over the past four years has been eye-opening. Republicans from Walker to Trump and even Paul Ryan literally lined up to take credit for this fake promise.

I can scarcely imagine how this must feel to families who had their multi-generational homes taken from them and bulldozed for this. The fact that they were financially compensated for the land can't restore their memories.