As job creation and investment expectations dropped, so did the state’s promised subsidies.
As has been well documented by this blog, a few years ago the cheeseheads up in Wisconsin – led by this guy – cut a deal with Taiwanese manufacturer Foxconn to open an enormous manufacturing facility in Racine County where the company would make flat-panel display screens for various consumer electronics products. The Scott Walker administration agreed to give Foxconn billions of dollars in subsidies if it upheld its end of the deal and actually opened a plant and created thousands of jobs.
But hang on a second. Let’s give credit where it’s due, because he certainly claimed it a lot: President Trump was a big part of this deal, too, and made a lot political hay out of it when it was announced.
It was almost as if … this was a big to-do to please the president!
The Verge has covered this story pretty closely. They write:
Manufacturing LCDs in Wisconsin never made economic sense, yet abandoning the plan risked incurring Trump’s wrath. Instead, the company spent years pivoting wildly from idea to idea. The enormous “Gen 10.5” LCD factory specified in the contract became a far smaller Gen 6, then was canceled, then came back. The company announced it was building something called “the AI+8K+5G ecosystem,” to be developed in a network of “innovation centers,” buildings that the company purchased only to leave empty. It looked into building fish farms, exporting ice cream, storing boats. It announced plans to build coffee kiosks and ventilators that never moved forward. Most recently, it said it would build electric cars — though maybe, the company acknowledged, that will happen in Mexico.
Meanwhile, local government borrowed a few hundred million dollars buy up properties, make infrastructure improvements and clear land. Then Walker lost re-election and the state got fed up with missed investment and hiring targets. Here’s the Verge again:
For two years, the Evers administration has been urging Foxconn to revise its contract to reflect its current plans, but the company refused. Last October, the latest attempt at negotiations failed, and (the Wisconsin Economic Development Corporation) denied the company what would have been its first tranche of cash subsidies. One likely reason for the company’s refusal to negotiate, as The Verge reported last year, is that the process to amend the contract would entail admitting it was not going to manufacturer LCDs and disclosing in detail what its new plan, which it did not have.
Which leads us to today, and a revised deal between Foxconn and the Badger State. Reuters reports:
Wisconsin will reduce its tax credits authorized for the project from $2.85 billion to $80 million as Foxconn reduces its planned investment from $10 billion to $672 million and cuts the number of jobs planned from 13,000 to 1,454, Wisconsin Governor Tony Evers said in a statement.
Okay, now it’s $80 million in subsidies. Let’s see how many jobs Foxconn eventually creates in America’s Dairyland.