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My read on the situation is they saw the opportunity to get subsidies and so negotiated to maximize what they were given. I imagine it comes from some maximalis

My read on the situation is they saw the opportunity to get subsidies and so negotiated to maximize what they were given. I imagine it comes from some maximalist position that says that if you plan to do X, you need to say you'll do 10X so you never 'lose out' on subsidies you might have been able to take advantage of in the good years. A lot of the reporting at the time emphasized that Foxconn had a history of doing this in other countries. It seems like a negotiating tactic that evolved in an age of cynical political environments where everyone's proximate goal is to announce a 'deal' with the full expectation that they won't be in a position to take credit (or blame) for the quality of that deal.

ethbr0 6y ago
I don't think Foxconn saw this as screwing anyone. I think they saw it as doing business the way they typically do in China. What would have happened if this deal had been done in China? No one would have reported on the failure. The local jobs numbers would have "jumped." Infrastructure would have been "built." Everyone would have gotten a pat on the back and/or promotion for hitting their economic targets. The weakness of command-style political systems have always been that they incentize systemic lying.
- aeturnum 6y ago
  Foxconn is an international company that operates in many countries outside of China. Suggesting they are too simple to realize the business climate is different outside of China seems insulting and infantilizing. Their operating income is ~$180 billion USD a year. They are aware that business conditions are different in different countries.
  - ethbr0 6y ago
    The Foxconn deal had $3-4.8B worth of subsidies attached, and investigative reporting says the branch of the company executing on the opportunity couldn't even accomplish basic tasks like "Decide what to build" or "Decide what skills were needed in hired staff." The takeaway is that either (a) everyone who touched the Wisconsin project is an idiot, but an outlier in the company, or (b) the failure to execute in Wisconsin is indicative of the general state of the company. (a) seems like a stretch, given the project's size and visibility. Ergo, (b).
    - aeturnum 6y ago
      Leaving a subsidy on the table is not exactly like leaving money on the table for either party. They lower costs and lower the tax revenue from a business, but they don't represent a cost (outside of the cost to negotiate and write the deal). It seems like calling the people involved idiots (or suggesting the entire company is...setting itself up to fail to execute?) requires knowing internal details of Foxconn's financials. A $1bn increase in revenue would be less than a 1% increase for Foxconn overall. That suggests they're probably willing to bear extremely high costs to establish new sites, as long as those sites will eventually yield significant revenue. Their negotiating tactics here seem short sighted from my point of view, but when you're as large as they are you create your own conditions. Edit: Like...this deal seems to allow them to operate any of their businesses in Wisconsin. If they decide not to, they burn bridges in Wisconsin, but they wouldn't care about burning those bridges because burning them means they don't want to do business in the state. It seems like all they lose is their negotiators' salaries, small (for them) facilities costs, and whatever general goodwill they lose.

ethbr0 6y ago

I don't think Foxconn saw this as screwing anyone. I think they saw it as doing business the way they typically do in China. What would have happened if this deal had been done in China? No one would have reported on the failure. The local jobs numbers would have "jumped." Infrastructure would have been "built." Everyone would have gotten a pat on the back and/or promotion for hitting their economic targets. The weakness of command-style political systems have always been that they incentize systemic lying.

aeturnum 6y ago
Foxconn is an international company that operates in many countries outside of China. Suggesting they are too simple to realize the business climate is different outside of China seems insulting and infantilizing. Their operating income is ~$180 billion USD a year. They are aware that business conditions are different in different countries.
- ethbr0 6y ago
  The Foxconn deal had $3-4.8B worth of subsidies attached, and investigative reporting says the branch of the company executing on the opportunity couldn't even accomplish basic tasks like "Decide what to build" or "Decide what skills were needed in hired staff." The takeaway is that either (a) everyone who touched the Wisconsin project is an idiot, but an outlier in the company, or (b) the failure to execute in Wisconsin is indicative of the general state of the company. (a) seems like a stretch, given the project's size and visibility. Ergo, (b).
  - aeturnum 6y ago
    Leaving a subsidy on the table is not exactly like leaving money on the table for either party. They lower costs and lower the tax revenue from a business, but they don't represent a cost (outside of the cost to negotiate and write the deal). It seems like calling the people involved idiots (or suggesting the entire company is...setting itself up to fail to execute?) requires knowing internal details of Foxconn's financials. A $1bn increase in revenue would be less than a 1% increase for Foxconn overall. That suggests they're probably willing to bear extremely high costs to establish new sites, as long as those sites will eventually yield significant revenue. Their negotiating tactics here seem short sighted from my point of view, but when you're as large as they are you create your own conditions. Edit: Like...this deal seems to allow them to operate any of their businesses in Wisconsin. If they decide not to, they burn bridges in Wisconsin, but they wouldn't care about burning those bridges because burning them means they don't want to do business in the state. It seems like all they lose is their negotiators' salaries, small (for them) facilities costs, and whatever general goodwill they lose.