Even if everything had gone right with the Foxconn deal, it would have been a massive gamble. Even if the (obviously shady) electronics manufacturing giant came to southeastern Wisconsin and delivered on their (handsomely taxpayer-compensated) plans to build a $10 billion facility and employ 13,000 people, it would have taken until more than 25 years for the state of Wisconsin to break even on its 15 years of tax credits.
It was a Hail Mary deal. Everything about it would have had to play out almost perfectly and the project would have needed to have tremendous catalytic impact—spawn and attract all sorts of complementary businesses to create a brand-new economic ecosystem—for it to succeed.
As the Foxconn project has taken shape, it has been a disaster. By any objective measure, it is failing. The most basic goal of the endeavor—creating jobs—isn’t living up to bare minimum expectations. Foxconn created just 178 full-time jobs in 2018, the project’s first full year, a number so low that it failed to reach the threshold (in this case, 260 jobs) necessary to receive job creation tax credits through the Wisconsin Economic Development Corporation (WEDC), the Scott Walker-created state agency administering the credits and overseeing the project.
It’s a pretty bad sign when Walker, the biggest champion of the deal and the person most responsible for making it happen, goes from saying this (the day he inked the agreement with Foxconn)...
“This is about something that someday, maybe 10 or 15 or 20 years from now, those of us in public service who are either elected or appointed, and others in the community in the private sector, will look back and say: We were part of that day. We were part of that moment. We were part of the thing that was so transformational, it changed and put Wisconsin on the map on a global basis like nothing we’ve ever seen before. This is something that will say to the world we have arrived, the eagle has landed, it’s spread its wings, and it’s taking off again. We are ready.”
...to this (in his first tweet sent after leaving the Governor’s mansion):
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“Foxconn earns state tax credits based on actual investment and job creation. No jobs/investment? No credits. Period.”
That’s not exactly a glowing endorsement of the start of Foxconn’s Wisconsin experiment.
And it’s also a lie of omission, since the deal involves far more than the tax-credits-for-jobs/capital costs that highlighted the initial deal; Racine County and Village of Mount Pleasant have acknowledged that local costs have grown to nearly an additional $1 billion on top of the original $3 billion deal. Then there’s the U.S. Interstate 94 North-South project that was worked into the deal at another $408 million, another $140 million in utility costs, and $134 million in road improvements on top of that.
And that’s not accounting for people like Sean McFarlane, a person who uses a wheelchair whose story was told on a terrific episode of the podcast “Reply All” (truly a must-listen report for anyone who wants to truly understand Foxconn in Mount Pleasant). McFarlane was forced out of his home and into temporary housing that was not wheelchair accessible and did not even have working heat before he was later told that he was not eligible for the $22,000 relocation fee.
There’s been more great, creative reporting on the Foxconn debacle in addition to the “Reply All” episode. Bloomberg Businessweek published an in-depth cover story quoting 49 (!) sources that paint the picture of the entire project being a poorly managed con job. Verge went long on how deeply confusing this has all gotten for Wisconsin (and found some definitely-not-empty “innovation centers”). If you can read stories like those and still think Foxconn is going to abide by its promises, I don’t know what to tell you.
There are countless examples of this company—which, before its Wisconsin adventure, was internationally known for the suicide prevention nets it installed in its Chinese factories, not that that was a red flag or anything—failing to deliver. Foxconn’s modus operandi is to make big promises, bilk desperate politicians out of public dollars, then change their plans. One Foxconn executive even likened the company’s Wisconsin plans to “building, flying and redesigning an airplane at the same time.” Buddy, that is not a thing!
What Wisconsin needs now is a course correction. Foxconn is not going to be manufacturing what it said it was going to be manufacturing when this deal was struck; it acknowledged as such even before the groundbreaking last June. It is not living up to its end of the bargain in countless ways. That’s unacceptable for the recipient of the largest taxpayer giveaway in the history of the Wisconsin.
Which is why Gov. Tony Evers is right to renegotiate the deal with Foxconn. Given the facts, it’s not unreasonable for his administration to explore every conceivable claw back provision and unsnarl the state from this deal as much as possible. All avenues for protecting Wisconsin taxpayers should be explored.
He may have to lock horns with legislative leadership like Assembly Speaker Robin Vos (whose district includes the Foxconn development)—currently making the bad faith argument on Republican talk radio that Gov. Evers is “rooting for the failure of the largest economic development project in our state’s history”—and with the GOP-appointed head of the WEDC (still defending the deal!) along the way, but this is the type of governing that Wisconsin elected Evers to do.
President Trump returns to Wisconsin this weekend for a campaign rally in Green Bay, and he will surely tout the project as a success—he called it the “eighth wonder of the world,” after all. But those paying attention can see that it’s a grift built on a lie, the economic development equivalent of the monstrously mismanaged Fyre Festival.
It’s time for the state of Wisconsin to do the unglamorous, difficult work of cleaning up the mess left here by the grifters, and kudos to Tony Evers for taking the first steps to rectify this debacle. It’s the type of work Democrats are going to need to be doing all over the country in the years to come. Maybe we ought to get used to it.
