It’s obvious by now everyone in Wisconsin was played for fools by former Gov. Scott Walker and soon-to-be-former President Trump, known for wildly exaggerated promises about job creation, after they teamed up with Foxconn Chairman Terry Gou, a billionaire Taiwanese businessman notorious for repeatedly breaking the same fraudulent promises about creating tens of thousands of jobs all over the world.
Those three launched a blinding blizzard of fabrications in the summer of 2017. Gou, whose company produces IPhones and LCD screens for large-screen TVs and computers for U.S. companies in China, was currying favor with Trump to avoid damage in Trump’s trade war with China. Gou offered to build the first high-tech LCD screen production factory in the U.S. Trump couldn’t wait to boast about attracting Chinese manufacturing jobs to the U.S.
With Walker facing re-election in 2018, Gou and Trump found someone ripe for picking. In November 2017, Wisconsin signed a contract offering an astronomical $3 billion in direct payments to Foxconn, the largest taxpayer jobs subsidy in U.S. history. With other costs for Wisconsin and Mount Pleasant, the total bill exceeded $4 billion. Foxconn had to hire a minimum of 5,200 workers by the end of 2022 to qualify for subsidies with vague promises employment could grow “up to 13,000.” Or not. Depending on hiring, the absurd cost could range from $200,000 to a million dollars per job. In the best-case scenario, the Legislative Fiscal Bureau said taxpayers wouldn’t break even until 2043.
Many people in Wisconsin already know much of that. They’re also aware little has happened in three years except construction of a few buildings and an enormous glass globe with no apparent function. But here’s something the public hasn’t been told yet. The Foxconn project was a total scam from the start. Now the company denies it ever promised to build an LCD factory in Wisconsin.
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Trump and Walker Lied
Forget all the Foxconn lies from both Walker and Trump until their election defeats. Walker called it “Wisconn Valley” soon to surpass Silicon Valley as the world center of high technology. Trump called it “the eighth wonder of the world.” During an October campaign trip to Janesville, Trump claimed in a Milwaukee TV interview: “I was at the (Foxconn) plant and it’s one of the most incredible plants I’ve ever seen.” That was an absurd description for an empty factory Foxconn got a permit to use for storage.
A month later, Wisconsin announced Foxconn was not expected to meet hiring minimums to receive any state payments for the next three fiscal years of 2020-21, 2021-22 or 2022-23. That action prompted Foxconn’s claim it never promised an LCD factory. In a letter to the Wisconsin Economic Development Commission dated Nov. 23, Foxconn said instead it had a “mutual understanding” with the WEDC to build something nebulously defined as “a transformational and sustainable high-tech manufacturing and technology ecosystem in Wisconsin that brings long-term investment and jobs.”
Your guess is as good as mine what all that nonsensical business gibberish actually requires Foxconn to do. That letter was obtained by Josh Dzieza, investigative editor for business and technology at a website called The Verge. That letter hasn’t been reported by any other Wisconsin media. Neither have the details of Dzieza’s major investigation of the Foxconn scam based on interviews with 19 Wisconsin employees and dozens of others familiar with the project.
Hello Robots
Dzieza’s investigation, “The Eighth Wonder of the World,” can be found on theverge.com. It documents Foxconn never really intended to build LCD screens although it claimed otherwise publicly. The project never made sense economically. In 2017, Foxconn already was moving many China operations to Vietnam and India for even lower labor costs and replacing human workers with robotics. Early Wisconsin Foxconn hires were told to write a new business plan suggesting profitable products or services. None of their low-tech ideas including fish farming, using empty buildings for boat storage or selling ice cream to China were ever approved.
It quickly became clear Foxconn’s primary money-making scheme was hiring a minimum number of employees near the end of each year to qualify for millions in Wisconsin subsidies and then laying them off. They failed, hiring only 113 of 260 required employees in 2018 and 281 of 520 required in 2019. Foxconn didn’t bother trying to meet a minimum of 1,820 employees in 2020.
Foxconn’s now negotiating with Wisconsin to revise its contract. With Gou no longer needing to flatter Trump to win favors, no one will be surprised if Foxconn abandons Wisconsin as the company has other disastrous, failed projects. A major victim would be tiny Mount Pleasant, which took out hundreds of millions in loans for land and infrastructure expecting to receive $30 million a year in property taxes. It could lead to years of expensive litigation and should be remembered any time Foxconn’s Republican state cheerleaders run for re-election.
