6 ms·

Wisconsin's Foxconn Boondoggle Is Getting Worse

91 points by jdkee 7y ago

cassieramen 7y ago
I really recommend this podcast on how negatively this deal affected the town the center piece plant was targeted for. https://gimletmedia.com/shows/reply-all/wbhjwd https://gimletmedia.com/shows/reply-all/wbhjwd
- campfireveteran 7y ago
  Vulture capitalism strikes again, exploiting undiversified, banana republic rustbelt towns who misplace their faith in a single, quick-fix, recovery panacea rather than many different industries that are geared to the needs of today.
  - jdavis703 7y ago
    I imagine a lot of readers are taking umbrage at these towns being called “banana republics.” Honestly a lot of American town and city councils can be described this way, regardless of where in the US they are. I write this as an American who has been to too many local government meetings over my life.
    - knightofmars 7y ago
      Yes. There are way to many local government representatives who think they can go "toe to toe" with the lawyers and officers of multinational corporations. They often take promises from those corporations at a word and don't (or can't) hold the corporations accountable when promises aren't kept. Inevitably the local representatives, and the constituents they represent, are left holding the short end of the stick.
  - knightofmars 7y ago
    I'll also point out the whole deal was bought & sold by the state government as well. It wasn't just the local government. Governor Walker and the state representatives had an interest in getting the Foxconn deal through to show they were "creating jobs" for the state.
  - kortilla 7y ago
    I don’t think you know what the term banana republic means. A rust belt town with an American middle class (even in an economic depression) doesn’t qualify. They are in no way dependent on a single corporation.
    - dtmooreiv 7y ago
      I disagree. SOME rust belt towns are not dependent on a single corporation. Other rust belt towns are and when that company ceases operations there, the town experiences rapid decline. If you disagree that some rust belt towns are dependent on a single corporation, I think you are either using a different definition of dependent than how I read the original comment use it, or you are not aware that towns where a single factory employs a significant portion of the towns population exist.
      - kortilla 7y ago
        In banana republics, the citizens have no mobility compared to US citizens so the dynamic is completely different. The fact that people in these towns can continue to live in them and easily telecommute like any other US citizen or even physically commute to the nearest major US city means that the citizens are not dependent on a single industry.
- kbenson 7y ago
  Reply all is an excellent show, and Gimlet media has an excellent lineup of podcasts in general. I particularly like the early seasons of startup (I may have to check back in this season for them covering they sale to Spotify), and Every Little Thing. It's well produced podcasts done well. If you took This American Life and scaled it to few slightly more targeted podcasts but kept the same quality, that's what they offer. That's less a metaphor than a description of history, given the original founder cut his teeth on TAL and then started Planet Money (also still excellent) before starting his own company. Okay, that's enough fanboying from me. It's just that I listen to a lot of podcasts, and Gimlet accounts for a large amount of my favorites.
  - mbergins 7y ago
    This season is the last one of Startup and it does indeed cover their sale to Spotify.
bilbo0s 7y ago
To be fair, as far as people in Wisconsin are concerned, the deal can't really get any worse, per sé. It was already pretty clear that we'd been hosed a long time ago. Then, mercifully, the trade war came along and may kill it completely if the Gods favor us! It's not often that you play poker with the Devil, and due to a technicality in his contract for your soul, you're allowed to fold and walk away. If you ever get that lucky, you just cut your losses, walk away, and count your blessings.
- microcolonel 7y ago
  > the trade war came along and may kill it completely if the Gods favor us Why would the trade war with China kill off this deal with a Korean company?
  - pcr0 7y ago
    Foxconn is a Taiwanese company with close ties to the Chinese government. Not Korean
    - microcolonel 7y ago
      Wow, I had a massive brainfart. My brain thought GP was talking about the LG factory.
  - syedkarim 7y ago
    Foxconn is a Taiwanese company with significant, likely majority, operations in China. Where did you get Korea from?
0xADADA 7y ago
Follow along with this story, its a crazy rabbit hole into a late-capitalism where actual production of goods is completely abandoned, and instead the state directly funds 100% pure profit with no social or productive benefits. Literal pure theft. * Foxconn scraps plan to build factory in Wisconsin, will hire white-collar workers instead https://www.washingtonpost.com/business/2019/01/30/foxconns-plan-giant-wisconsin-factory-now-looks-uncertain/ https://www.washingtonpost.com/business/2019/01/30/foxconns-... * Foxconn and the village: the $10B factory deal that turned one small Wisconsin town upside down https://www.theverge.com/2018/12/6/18128133/foxconn-deal-wisconsin-factory-mount-pleasant-trump-reply-all-sruthi-pinnamaneni https://www.theverge.com/2018/12/6/18128133/foxconn-deal-wis... * What Foxconn’s really doing in Wisconsin, with Reply All’s Sruthi Pinnamaneni https://www.theverge.com/2018/12/11/18136020/foxconn-wisconsin-deal-reply-all-vergecast-interview-sruthi-pinnamaneni https://www.theverge.com/2018/12/11/18136020/foxconn-wiscons...
mdorazio 7y ago
It's important to note that to a large extent, this is the reality of bringing consumer goods manufacturing back to the US. The only way it will ever make financial sense for companies to do so is if it either comes with a massive subsidy or if the number of human jobs is small. Any deal promising thousands of blue collar jobs doing what is far cheaper to do elsewhere should probably be regarded as bullshit until proven otherwise. Note: this does not necessarily apply beyond "cheap" consumer goods. For example, cars and trucks are still produced at many US plants for a variety of reasons.
- RaiseProfits 7y ago
  In the long term a supply chain that is predominantly local will consume fewer resources and be more resilient to disruption. This isn’t always possible but the incentives you’re referring to are only because us corporations optimize short term profits over sustainable businesses.
  - microcolonel 7y ago
    > us corporations optimize short term profits over sustainable businesses Speak for yourself. I think the investor culture is where this comes from, more than from the people operating the businesses.
    - Arn_Thor 7y ago
      As long as a business' primary responsibility is to shareholders rather than, say, the local community, the consumer or the environment then that won't change. Investors are a big part of it, yes, as they demand quick returns today rather than steady returns years from now.. but the fundamental problem is that investors' demands set the pace because of the structure of the structure of the entire economy
      - SamReidHughes 7y ago
        It's more basic than that. Businesses can't operate if they run out of money.
EETruth 7y ago
Hah, the ferals got shafted. Serves them well.
ars 7y ago
If they are not keeping their deal, can the state just not give them the tax breaks or whatever was promised?

91 points by jdkee 7y ago

I really recommend this podcast on how negatively this deal affected the town the center piece plant was targeted for. https://gimletmedia.com/shows/reply-all/wbhjwd https://gimletmedia.com/shows/reply-all/wbhjwd

campfireveteran 7y ago
Vulture capitalism strikes again, exploiting undiversified, banana republic rustbelt towns who misplace their faith in a single, quick-fix, recovery panacea rather than many different industries that are geared to the needs of today.
- jdavis703 7y ago
  I imagine a lot of readers are taking umbrage at these towns being called “banana republics.” Honestly a lot of American town and city councils can be described this way, regardless of where in the US they are. I write this as an American who has been to too many local government meetings over my life.
  - knightofmars 7y ago
    Yes. There are way to many local government representatives who think they can go "toe to toe" with the lawyers and officers of multinational corporations. They often take promises from those corporations at a word and don't (or can't) hold the corporations accountable when promises aren't kept. Inevitably the local representatives, and the constituents they represent, are left holding the short end of the stick.
- knightofmars 7y ago
  I'll also point out the whole deal was bought & sold by the state government as well. It wasn't just the local government. Governor Walker and the state representatives had an interest in getting the Foxconn deal through to show they were "creating jobs" for the state.
- kortilla 7y ago
  I don’t think you know what the term banana republic means. A rust belt town with an American middle class (even in an economic depression) doesn’t qualify. They are in no way dependent on a single corporation.
  - dtmooreiv 7y ago
    I disagree. SOME rust belt towns are not dependent on a single corporation. Other rust belt towns are and when that company ceases operations there, the town experiences rapid decline. If you disagree that some rust belt towns are dependent on a single corporation, I think you are either using a different definition of dependent than how I read the original comment use it, or you are not aware that towns where a single factory employs a significant portion of the towns population exist.
    - kortilla 7y ago
      In banana republics, the citizens have no mobility compared to US citizens so the dynamic is completely different. The fact that people in these towns can continue to live in them and easily telecommute like any other US citizen or even physically commute to the nearest major US city means that the citizens are not dependent on a single industry.
kbenson 7y ago
Reply all is an excellent show, and Gimlet media has an excellent lineup of podcasts in general. I particularly like the early seasons of startup (I may have to check back in this season for them covering they sale to Spotify), and Every Little Thing. It's well produced podcasts done well. If you took This American Life and scaled it to few slightly more targeted podcasts but kept the same quality, that's what they offer. That's less a metaphor than a description of history, given the original founder cut his teeth on TAL and then started Planet Money (also still excellent) before starting his own company. Okay, that's enough fanboying from me. It's just that I listen to a lot of podcasts, and Gimlet accounts for a large amount of my favorites.
- mbergins 7y ago
  This season is the last one of Startup and it does indeed cover their sale to Spotify.

bilbo0s 7y ago

To be fair, as far as people in Wisconsin are concerned, the deal can't really get any worse, per sé. It was already pretty clear that we'd been hosed a long time ago. Then, mercifully, the trade war came along and may kill it completely if the Gods favor us! It's not often that you play poker with the Devil, and due to a technicality in his contract for your soul, you're allowed to fold and walk away. If you ever get that lucky, you just cut your losses, walk away, and count your blessings.

microcolonel 7y ago
> the trade war came along and may kill it completely if the Gods favor us Why would the trade war with China kill off this deal with a Korean company?
- pcr0 7y ago
  Foxconn is a Taiwanese company with close ties to the Chinese government. Not Korean
  - microcolonel 7y ago
    Wow, I had a massive brainfart. My brain thought GP was talking about the LG factory.
- syedkarim 7y ago
  Foxconn is a Taiwanese company with significant, likely majority, operations in China. Where did you get Korea from?

0xADADA 7y ago

Follow along with this story, its a crazy rabbit hole into a late-capitalism where actual production of goods is completely abandoned, and instead the state directly funds 100% pure profit with no social or productive benefits. Literal pure theft. * Foxconn scraps plan to build factory in Wisconsin, will hire white-collar workers instead https://www.washingtonpost.com/business/2019/01/30/foxconns-plan-giant-wisconsin-factory-now-looks-uncertain/ https://www.washingtonpost.com/business/2019/01/30/foxconns-... * Foxconn and the village: the $10B factory deal that turned one small Wisconsin town upside down https://www.theverge.com/2018/12/6/18128133/foxconn-deal-wisconsin-factory-mount-pleasant-trump-reply-all-sruthi-pinnamaneni https://www.theverge.com/2018/12/6/18128133/foxconn-deal-wis... * What Foxconn’s really doing in Wisconsin, with Reply All’s Sruthi Pinnamaneni https://www.theverge.com/2018/12/11/18136020/foxconn-wisconsin-deal-reply-all-vergecast-interview-sruthi-pinnamaneni https://www.theverge.com/2018/12/11/18136020/foxconn-wiscons...

mdorazio 7y ago

It's important to note that to a large extent, this is the reality of bringing consumer goods manufacturing back to the US. The only way it will ever make financial sense for companies to do so is if it either comes with a massive subsidy or if the number of human jobs is small. Any deal promising thousands of blue collar jobs doing what is far cheaper to do elsewhere should probably be regarded as bullshit until proven otherwise. Note: this does not necessarily apply beyond "cheap" consumer goods. For example, cars and trucks are still produced at many US plants for a variety of reasons.

RaiseProfits 7y ago
In the long term a supply chain that is predominantly local will consume fewer resources and be more resilient to disruption. This isn’t always possible but the incentives you’re referring to are only because us corporations optimize short term profits over sustainable businesses.
- microcolonel 7y ago
  > us corporations optimize short term profits over sustainable businesses Speak for yourself. I think the investor culture is where this comes from, more than from the people operating the businesses.
  - Arn_Thor 7y ago
    As long as a business' primary responsibility is to shareholders rather than, say, the local community, the consumer or the environment then that won't change. Investors are a big part of it, yes, as they demand quick returns today rather than steady returns years from now.. but the fundamental problem is that investors' demands set the pace because of the structure of the structure of the entire economy
    - SamReidHughes 7y ago
      It's more basic than that. Businesses can't operate if they run out of money.

EETruth 7y ago

Hah, the ferals got shafted. Serves them well.

ars 7y ago

If they are not keeping their deal, can the state just not give them the tax breaks or whatever was promised?