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Foxconn's promise to invest $10B in Wisconsin is now a distant memory
- 0xDEF 3y agoWhy would a low-cost electronics contract manufacturer with factories in China and South East Asia suddenly make a factory in Wisconsin, USA? The factory was never going to happen. It was all about political favors.
- kevin_thibedeau 3y agoThey were going to produce LCD panels. Presumably Detroit auto companies would find value contracting with them. Otherwise there's no point in making something to be shipped back to SEA for assembly.
- declan_roberts 3y agoBecause they expected import tariffs which were threatened but not materialized.
- SnowProblem 3y agoWhat's the real story here? Why did Trump say the $10B would not be spent if he was not re-elected? What "changing global market conditions" is Foxconn referring to? Edit: I found this interview here with a former Foxconn exec that goes some more detail: https://www.theverge.com/23030465/foxconn-lcd-factory-wisconsin-alan-yeung-trump-scott-walker-wisconn-valley-dome-decoder-interview https://www.theverge.com/23030465/foxconn-lcd-factory-wiscon.... Summary as far as I can tell is that the deal from the previous republican governor was controversial because of the tax breaks and the next democratic governor renegotiated the deal. Politics, basically. I guess locals are OK with this? Seems unfortunate though since people lost their homes and it would have brought jobs.
- cowsandmilk 3y ago> if he was not re-elected He didn’t say that. He said this investment wouldn’t have happened if he hadn’t been elected in 2016.
- SnowProblem 3y agoThanks. That makes more sense.
- jandrese 3y agoWow, that claim aged like milk didn't it? Now it reads like "Wisconsin voters wouldn't have gotten scammed if you didn't elect Trump and Walker."
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- earthtograndma 3y agoHe was talking about his election in 2016, claiming that Foxconn would not invest this great sum of money had Hillary Clinton been elected. As usual, he was looking backwards and spewing nonsense.
- rhaway84773 3y agoThe real story is that Scott Walker offered FoxConn a nonsensical deal for a political victory for himself (Trump jumping onto it was a sideshow and irrelevant…the primary work was done by Scott Walker). The deal essentially gave Foxconn free money without requiring it do anything and Foxconn figured why not take the money and then see if we can also do something. They found out they couldn’t. They tried to pivot to a more software/IT focused investment but the properties they had picked were not ideal for that being far away from where IT people lived. And they eventually gave up.
- lapcat 3y ago> I found this interview here with a former Foxconn exec that goes some more detail Alan Yeung is full of crap, completely untrustworthy. You can see multiple times during the interview where Nilay immediately calls him out on his B.S. lies.
- bemusedthrow75 3y agoTrump was taking credit for something someone else did, as per usual. It's really that simple. The plans were always idiotic. The fact that Trump was too ignorant and/or poorly-advised not to take credit for them is just the icing on the kakistocracy.
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- MisterBastahrd 3y agoReminds me of the American Plant Foods deal in Louisiana. They promised 100+ jobs at $120K+ a year salaried. What they actually came up with was 13 jobs at $56K a year. For this, they're getting a $47M tax break. If you want to know why Louisiana is consistently one of the most poorly educated and poorly funded states in the country, it's situations like this. The locals end up subsidizing out of state businesses who get sweetheart deals with local politicians in exchange for favors.
- xorbax 3y agoTheir leaders may be dumb But their voters are an order of magnitude dumber
- ninth_ant 3y agoTax subsidies like you describe here don’t just hurt the state being taken advantage of, it hurts the entire country because no one is getting that tax revenue. Instead of a business paying their share, all that money is instead transferred to the already-rich owners and investors (and yes, the corrupt officials in the local state). It’s a prisoners-dilemma style arrangement for the benefit of the already rich and powerful. If it’s not Louisiana, they’ll find some other suckers to bribe.
- MisterBastahrd 3y agoIt is particularly endemic to Louisiana which has an insane amount of chemical factories due to proximity to the Gulf of Mexico and the Mississippi River. All of them are getting tax breaks even though many have been here for 50 years and couldn't move if they wanted to.
- sitkack 3y agoAnd probably would owe more than they are worth if charged with cleaning up all the pollution they have caused.
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- Tempest1981 3y agoWasn't there also a site in Mount Pleasant? 3 sites total in Wisconsin? https://www.wisn.com/article/village-of-mount-pleasant-approves-deal-to-sell-portion-of-foxconn-land-to-microsoft/43473417 https://www.wisn.com/article/village-of-mount-pleasant-appro...
- chkaloon 3y agoYes, I think that was the biggest investment
- eunos 3y agoSo will be similar article in 2027 in which Foxconn -> TSMC?
- eps 3y agoTSMC situation is different because of the political situation around Taiwan. They want to get out.
- eunos 3y agoMorris Chang at least is actually doesn't believe that state of teh art TSMC fab can perform well outside TW.
- lossolo 3y agoTaiwan is paying for US protection by securing some of the chips supply for US companies in case China invades Taiwan. They were pressured into doing this because in their interest is keeping most of the fabs producing cutting edge chips on the island, which would make invading them a huge hit into US interests, which in conclusion would make higher chance for US to defend Taiwan.
- 1letterunixname 3y agoIt comes off as US global imperialism to park nukes and battle groups near the other side's mainland. Although the South China Sea and Taiwan == China both come off as Chinese global imperialism, so both major powers need to learn to play nice without saber-rattling expansionism.
- paradox242 3y agoMy read is more that they do not want to build outside of Taiwan as the TSMC fabs on the island have become of enormous strategic interest to the United States (as well as China). Building fabs in the US is directly counter to this, and I would wager we have twisted their arm to do so. I am so far not surprised by all the complaining and foot dragging they are doing in Arizona.
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- candiddevmike 3y agoIMO, this stands out among other things as a big reason for why Tony Evers was elected. So in a way, this helped WI in the end (by finally getting folks to see how big of an idiot Scott "open for business" Walker is). Distant memory maybe, but I'd call it the beginning of the end of Republican control over a blue/purple state. Evers has been the only thing holding back a lot of terrible ideas until recently. Fingers crossed for new maps before 2024, but I'll be fine with 2026.
- Waterluvian 3y agoI think it harms WI in the principle: someone got elected for reasons that turned out to be illusory. Just because it helped “your guy” this time doesn’t make it a good thing.
- rhaway84773 3y agoAgreed. Id prefer a world where the Republican Party wasn’t just a collections of scammers and the scammed.
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- CameronNemo 3y agoI think you might be misunderstanding. Evers didn't get elected by selling the scam Foxconn plant. He got elected after it was clear that Scott Walker, his opponent, made promises about the plant that he could not keep.
- Waterluvian 3y agoAhhh. I was misunderstanding. Thanks.
- add-sub-mul-div 3y agoI'm pretty sure they're saying the opposite of that. It was Trump who made it a big PR thing and then he and Walker lost after voters realized it was illusory.
- NelsonMinar 3y agoHopefully it's an ongoing lawsuit, although my memory is the various gifts the state gave to Foxconn came with very little in the way of guarantees. Some of this debacle was very well documented in a 2018 Reply All podcast. https://gimletmedia.com/shows/reply-all/wbhjwd https://gimletmedia.com/shows/reply-all/wbhjwd
- beatthatflight 3y agoFar out that podcast was a great show. I miss it so much.
- e40 3y agoThe fall was swift and complete. Sadly.
- bl4kers 3y agoWould highly recommend Underunderstood and Darknet Diaries if you liked RA
- beatthatflight 3y agoAm on DnD, will try Underunderstood, thanks!
- smessina 3y agoPJ has a new show in a very similar vein called “Search Engine”. Great stuff.
- beatthatflight 3y agoIndeed, have subscribed. It's good but still, I miss the old format and team.
- aj7 3y agoNever not a scam.
- deleted 3y ago[deleted]
- 55873445216111 3y agoI agree. I never understood how this deal could have made business sense from the beginning. I grew up in south-east Wisconsin and I was disappointed at how gullible-seeming the local officials were. I was hoping I would be wrong and it would come to fruition some day, but unfortunately my initial gut feeling seems to have been right. I don't view Foxconn as a highly trustworthy partner, but I don't think the people in Wisconsin really understood who they were dealing with.
- stevage 3y agoI remember listening to a podcast episode a few years ago about this, very skeptical it was ever going to happen. It had totally divided the local community. I can't remember which podcast though!
- fleshdaddy 3y agoReply all did an episode about the Foxconn stuff at a specific town. Looked it up and it’s called “Negative Mount Pleasant”. It’s been a long time since I’ve listened but I remember being very skeptical of the whole thing as well. I just have no idea why Foxconn would ever have an economic reason to pay for American labor when presumably they have a pretty large pool of much cheaper and closer labor available.
- stevage 3y agoAh yep, that would be the one.
- Jerry2 3y agoExact same things is happening with TSMC's $40 Billion plant in AZ. [1] [1] https://www.datacenterdynamics.com/en/news/tsmc-delays-40bn-chip-fab-in-arizona-due-to-skilled-worker-shortage/ https://www.datacenterdynamics.com/en/news/tsmc-delays-40bn-...
- pnpnp 3y agoI think it’s slightly more likely this will happen. From the Taiwanese perspective, this could be seen as partly collateral for some of the big defense sales that happened recently. The US is very motivated to bring some chip manufacturing back within its borders.
- coliveira 3y ago> The US is very motivated to bring some chip manufacturing back within its borders. And Taiwan is very motivated not to let this happen. They only agreed because of political pressure, but I wonder if they will ever build this factory.
- iepathos 3y agoNot really, tsm is delaying to find enough workers for their plant. They are still building it in AZ. Foxconn is changing a $40b investment into a $672m investment and selling the properties they had. Related but not the same thing at all. Not surprising TSM can't find workers with the low unemployment rates in the US.
- coliveira 3y agoExactly. TSMC has no intention to build anything in the US because it would be too expensive and counter to Taiwan interests. But of course they need to play the role. They already started to delay the construction date.
- eppsilon 3y agoThis is incorrect. The TSMC site has already seen a massive amount of construction and is scheduled to begin producing 3nm chips in 2024. [1] 1. https://www.tomshardware.com/news/tsmc-fab-21-arizona https://www.tomshardware.com/news/tsmc-fab-21-arizona Edit: They've apparently delayed the start of production to 2025 [2]. However, the situation with Foxconn is simply not comparable to what TSMC has invested. 2. https://www.anandtech.com/show/18966/tsmc-delays-arizona-fab-deployment-to-2025 https://www.anandtech.com/show/18966/tsmc-delays-arizona-fab...
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- stevage 3y agohttps://www.theverge.com/23030465/foxconn-lcd-factory-wisconsin-alan-yeung-trump-scott-walker-wisconn-valley-dome-decoder-interview https://www.theverge.com/23030465/foxconn-lcd-factory-wiscon... Here's a nice frustrating article that kind of but doesn't really explain it.
- daguava 3y ago[dead]
- YesThatTom2 3y agoNobody believed the hem when they made the deal. It was an obvious Trump illusion. The mend is just didn’t want to say anything in print and look like jerks.
- rsynnott 3y agoI’m sceptical as to whether this was _ever_ a real thing (as opposed to a photo op for Trump et al). It always seemed rather far-fetched.
- miohtama 3y agoMaybe Trump meant that the Foxconn factory will happen on his second term when he gets elected (:
- SoftTalker 3y agoI've heard of some of these "tax deals" working out well for the community, but often they don't end up providing nearly the amount of development or jobs that were originally promised.
- philistine 3y agoMontréal is now the fifth most important city for video games in the world due to tax credits that are directly applied per employee. No company needs to strike a backroom deal to get a lump sum. The more employees they bring to Montréal, the more they save automatically. https://www.npr.org/sections/money/2022/01/04/1068916102/how-subsidies-helped-montreal-become-the-hollywood-of-video-games https://www.npr.org/sections/money/2022/01/04/1068916102/how...
- jimmydddd 3y agoAgreed. It's like the time the Trump regime asked China to "promise" to buy some huge amount of grain from US farmers. Trump got the photo op, but I don't think we even ever pressured the Chinese to sign any kind of actual deal. They just had to talk about some vague future promise.
- anitil 3y agoThere was an interesting 'Reply All' episode about the town that this impacted - https://gimletmedia.com/shows/reply-all/wbhjwd https://gimletmedia.com/shows/reply-all/wbhjwd
- gloryjulio 3y agoDo we have a tldr for that 1h podcast?
- bandofthehawk 3y agoBasically the local politicians were suckered in by the promise of massive investments, and made some terrible decisions including forcing out some local residents to make room for development that never happened. It's definitely worth listening to the whole thing, as it's a pretty compelling story about why local communities should be very cautious and skeptical about these types of investments promises.
- 1letterunixname 3y agoYes. The British were also promised Hong Kong would have democracy. Whenever there is a lack of enforceable accountability as part of an agreement, then it is a foolish agreement. It's another reason it's vital that the people should strive for political participation and power because such matters cannot be left to chance with foolish or corrupt decision-makers to screw them over.
- throw3837274 3y agoThe British were not promised that. They were promised after decolonization, Hong Kong would get elections for 50 years and then China would fully take over. China was also allowed to implement laws protecting national security. What the British didn't foresee is China being able to gerrymander and also influence which politicians could run in the name of national security.
- bmurphy1976 3y ago
- asimpleusecase 3y agoThis is not a new problem. How many places was Amazon going to build the new HQ? When I was a teenager GE got a big financial package to build a factory in our area. They built the building but it always remained empty. And on it goes.
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- pierat 3y agoSo, why the hell aren't governments putting clawback clauses in these taxation contracts with companies? They claim the world, and provide a couch, they should have to pay for the contract. But nooooope. We small folk have to pay OUR taxes each year without fail. When have any of you individuals got a "5 year abatement" from your household taxes? Anyone?
- SoftTalker 3y agoIf it's a 5 year abatement to develop vacant or abandoned land, it's not much of a concession, if the alternative is the land continues to sit vacant.
- deleted 3y ago[deleted]
- Accujack 3y agoOne useful outcome of this debacle is that it exposed a loophole in the Great Lakes Water Resources Compact. Under that agreement, pumping water from the Great Lakes for industrial purposes is supposed to be disallowed, preventing e.g. chip makers or bottled water companies from buying land and setting up shop to pump water out of the lakes for export. During this agreement, the city of Racine was given enough incentive to allow FoxConn to pull water from the lake via the city (there's an exception in the compact that allows cities who already pull their drinking water from the lakes to keep doing it). So Racine bypassed the compact by using their legal way to pump Lake Michigan water to supply FoxConn's industrial needs. Fortunately this didn't happen, but the GLWRC needs some editin'.
- oneTbrain23 3y agoVote democrats and you get Barry's infamous those jobs never coming back. We know Biden is more popular and the actual real McCoy behind Obama votes result. People voted Biden and not Barry. Sure miss Trump. That guy really an economic powerhouse. Any economist graduated with just AP Economy can easily beat that old guy.