Revisiting Wisconsin's Foxconn Deal, Now Called a 'Boondoggle'

Wisconsin taxpayer will be paying the bill for the deal to bring Foxconn to Racine "for decades, if not generations, to come."
November 3, 2018, 7am PDT | James Brasuell | @CasualBrasuell
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Bruce Murphy devotes feature-length attention to the evolution of the deal that brought a massive Foxconn manufacturing plant to Racine County, in southeastern Wisconsin.

The original deal, written on the back of a napkin, offered Foxconn $3.1 billion, "far and away the largest in Wisconsin history and the largest government handout to a foreign company ever given in America," writes Murphy. Since the deal was announced in July 2017, that subsidy has ballooned to $4.1 billion.

But what seemed so simple on a napkin has turned out to be far more complicated and messy in real life. As the size of the subsidy has steadily increased to a jaw-dropping $4.1 billion, Foxconn has repeatedly changed what it plans to do, raising doubts about the number of jobs it will create. Instead of the promised Generation 10.5 plant, Foxconn now says it will build a much smaller Gen 6 plant, which would require one-third of the promised investment, although the company insists it will eventually hit the $10 billion investment target. And instead of a factory of workers building panels for 75-inch TVs, Foxconn executives now say the goal is to build “ecosystem” of buzzwords called “AI 8K+5G” with most of the manufacturing done by robots.

The article documents that growing size the subsidies offered in the deal, as well as the contraction of the new facility promised in return for the subsidies. That's only part of the story, however, as concerns grow about the environmental externalities of the future Foxconn plant. Wisconsin has exempted Foxconn from the state's environmental rules, "allowing it to discharge materials into wetlands and reroute streams during construction and operation" and also "[exempting] the company from doing an Environmental Impact Statement." Lee Bergquist reported in March that the plant "would rank among the highest in southeastern Wisconsin for pollutants that create smog, also known as ozone pollution."

All of the debate and concern over the size of the state's subsidy to Foxconn, and the reality of what it might get in return, is in context of the impending gubernatorial election, in which Gov. Scott Walker is seeking a third term in office.

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Published on Monday, October 29, 2018 in The Verge
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