Foxconn Factory Fiasco Could Leave Wisonsinites On the Hook For $300 Million (theregister.com) 106
An anonymous reader quotes a report from The Register: For five years, Foxconn promised and spectacularly failed to build a much-hyped sprawling factory near Mount Pleasant, Wisconsin. Now, the area's leaders may be saddled with $300 million in bond repayments that the Taiwanese iPhone maker had promised to repay. According to the Wall Street Journal, Foxconn agreed to pay $36 million annually across a 20-year term to pay for the surrounding infrastructure supporting the now-abandoned 3,000-acre site. Those payments are scheduled to start next tax year, and local leaders told the newspaper they're counting on Foxconn's cash to maintain the site while they try to attract another occupant.
Finding an occupant hasn't been easy. Intel, which announced a $20 billion investment in two chip factories in Ohio in January, was also considering Wisconsin for the project, with its focus on Racine, the nearest large city to the proposed Foxconn plant. The other option to cover the costs would be a total Foxconn pullout, which state officials said would let the government sell the land, assessed at a value of over $500 million. Ultimately, we're told, Foxconn promised to cough up $300 million to cover bonds for the infrastructure, whether the plant went ahead or not, but with that deal in tatters, it's now not clear if the money will be paid.
Finding an occupant hasn't been easy. Intel, which announced a $20 billion investment in two chip factories in Ohio in January, was also considering Wisconsin for the project, with its focus on Racine, the nearest large city to the proposed Foxconn plant. The other option to cover the costs would be a total Foxconn pullout, which state officials said would let the government sell the land, assessed at a value of over $500 million. Ultimately, we're told, Foxconn promised to cough up $300 million to cover bonds for the infrastructure, whether the plant went ahead or not, but with that deal in tatters, it's now not clear if the money will be paid.
Reporting Circle (Score:5, Informative)
Here's the original article, instead of The Register's reporting on someone else's reporting:
https://www.wsj.com/articles/f... [wsj.com]
Re:Reporting Circle (Score:5, Interesting)
Here's the original article, instead of The Register's reporting on someone else's reporting:
https://www.wsj.com/articles/f... [wsj.com]
Here's a free link: https://www.wsj.com/articles/f... [wsj.com]
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The great part about reporting on someone else's reporting is that it bypasses paywalls. I'll take the register's garbage over a dead link any day.
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Ha - even the link on the text "according to the Wall Street Journal" links to the Register article.
Re: Reporting Circle (Score:1)
I'd rather have a non-paywalled link.
The first paragraph was nice though. Kudo's WSJ!
Thanks for trying, though.
Paying (Score:2)
Yeah, paying for someone else's work sucks, doesn't it.
Goodness me, what a surprise! (Score:1)
But I'm sure the money will be repaid in full as promised.
Re: Goodness me, what a surprise! (Score:4, Interesting)
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If you look back to when this deal was made it was as much about showing the Libs how Trumpets were all about the jobs and how they knew how to bring manufacturing back to America. Anything like abandonment clauses were off the table as they might sour the deal and make the Republicans look bad.
Although if you look through past articles, there were a number of contractual safeguards put in place to prevent Foxconn from making the bad deals they're know for pushing. So things weren't as bad as they could hav
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Because that factory was was never going to be anything but vapor, a grift. It was obvious from the start.
Re: Goodness me, what a surprise! (Score:2)
Every business development should require pre-purchased bonds that cover the cost of such things. Abusive actors would be pushed out by high insurance costs.
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Number one rule of business in government (Score:5, Informative)
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There is an important lesson here: Before signing a deal for a billion dollars or more, read the fine print or at least have someone explain the gist of it.
Re: Number one rule of business in government (Score:2)
They did, the new governor decided to pull out of their end of the deal allowing Foxconn to pull out. Foxconn is still there and the largest tax payer in the area. But they bite the hand that feedsâ¦
The state subsequently sued and got dismissed after it became clear the state had already secretly negotiated other plans, other parts of the state (county, city) also sued and likewise settled or got dismissed.
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Re: Number one rule of business in government (Score:5, Insightful)
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Bad for whom?
The Republicans? The state of Wisconsin? Foxconn? Or the Democrats?
The Republicans were trying to show that Wisconsin welcomed industry, and gave Foxconn some rather liberal (pardon the pun) tax breaks. So it was a good deal for Foxconn and helped the Republicans push the narrative of jobs creation, but gave up far more in tax breaks than it recovered in jobs. Then the Democrats took over, there was some dispute with Foxconn over how much they owed in taxes, and they pulled out of the
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Re:Number one rule of business in government (Score:4, Interesting)
Even better: have the politicians that are putting the taxpayer on the hook go on live TV and explain the gist of it, in plain English. Bonus: an interactive forum where people can ask pointed questions. Can't do it? No deal. And if the deal still goes sour, you'll have plenty of fodder to stick them with.
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Even better: have the politicians that are putting the taxpayer on the hook go on live TV and explain the gist of it, in plain English. Bonus: an interactive forum where people can ask pointed questions.
this would likely be a fairly effective tool if it were a requirement for projects above $X, regardless of the project's outcome;
public shame can be quite the motivator.
putting a face to performance would help the public in the future elections as well.
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Like grandpa always said, "You learn more from the conman than the mark."
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Rat race, rat win.
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Another $300 million (Score:5, Interesting)
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As soon as Wisconsin elected a different governor, Foxconn started reneging left and right. Republicans blamed the new Democrat governor even though he hadn't done anything yet to interfere with the deal.
Re: Another $300 million (Score:1)
The governor ran on a platform of cancelling the deal. Which he did, lawsuits were brought against Foxconn, they went nowhere because the deal was the deal and the state reneged.
Re: Another $300 million (Score:4, Informative)
Re: Another $300 million (Score:5, Informative)
It's almost as if Republicans in Wisconsin learned nothing from what Foxconn did in Pennsylvania [wisn.com], and even went out of their way to say it's the fault of Democrats [rightwisconsin.com] who didn't want to hand over large sums of taxpayer money to a private company.
Because what could be more capitalist than putting taxpayers on the hook for a private company's debts?
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It is negligence and I am surprised the local taxpayers have not filed suite against those who promoted the deal.
Scott Walker has a net worth of $300k.
Subtract the value of his pension, home, and car (which lawsuits usually can't touch) and the remainder is $0.
Scott Walker's net worth [celebritynetworth.com]
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Scott Walker has a net worth of $300k.
Since you seem to believe everything you read on the internet, I have a bridge to sell you.
Please, by all means, ignore all his PRIVATE HOLDINGS - just like he does when DOING HIS TAXES.
Thanks for proving they are all hoarding, greedy, power hungry aholes!
Re: Another $300 million (Score:2)
you seem to believe everything you read on the internet
Question, where did YOU learn everything you know about this Wisconsin deal?
Please, by all means, ignore all his PRIVATE HOLDINGS - just like he does when DOING HIS TAXES.
PRIVATE HOLDINGS are not 'income', we tax income not personal wealth...
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Oh no, no, no... It was Republicans, not Chinese.. (Score:5, Informative)
It was all a desperate ploy to get reelected.
Excuse me while I just copy/paste myself, for those who didn't bother reading about it back then.
It was all explained years ago.
https://www.theverge.com/2018/... [theverge.com]
When Walker signed the Foxconn deal in November 2017, the details matched those jotted on the napkin: the state promised a $3 billion state subsidy if the company invested $10 billion in a plant that created 13,000 jobs.
The size of Wisconsin's subsidy quickly began to grow, as spelled out in state legislation passed about six weeks later and implemented by the Walker administration.
By December 2017, the public cost had grown to include $764 million in new tax incentives from local governments in Racine County, which is just 40 minutes south of Milwaukee where the plant was to be located.
Other additions included $164 million for road and highway connections built to service the plant, plus $140 million for a new electric transmission line to Foxconn that would be paid for by all 5 million ratepayers of the public utility We Energies.
With other small costs added, the total Foxconn subsidy hit $4.1 billion - a stunning $1,774 per household in Wisconsin.
It's all due to Walker's and the Republicans' criminal incompetence and negligence during the "planning stage".
The above mentioned napkin is barely a metaphor - it was a jotted down scribble on Walker's stationary. [gannett-cdn.com]
And boy did all that "planning" show when $3 billion in subsidies blew up into $4.1 billion in cost to the Wisconsinite taxpayers.
Walker and the Trump administration didn't think nor care about the risks involved - not THEIR money after all.
So they kept putting more and more of other people's money on the line hoping for a big payoff in VOTES.
But Walker was elected in 2010 on a promise of creating 250,000 new jobs in the state in his first term as governor. Six years into his tenure, he still was far short.
Running for a third term in 2018, he badly needed a big win.
You gudda gamble big to win big, amiright?
https://www.jsonline.com/story... [jsonline.com]
The state's June 2 offer would have paid Foxconn 10 cents in cash for every $1 in qualifying wages the company paid to workers, this letter says.
The final deal offered to Foxconn would pay the company 17 cents for every $1 in wages.
Normally, the state offers to offer no more than 7 cents for every $1 in wages.
Foxconn didn't need a motive to keep bleeding the state and its people - Walker and the Republicans already had that in spades. [vox-cdn.com]
lol (Score:2)
You can't hide evil with moderation, everyone knows already.
Look, you Republicans have only two positions. You can argue that you're incompetent, and therefore can't be evil; or evil, and therefore it's not incompetence. But when you shake the Devil's hand, you're forever marked.
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Filed suit. That lat "e" turns a legal matter into a multi-room pad at a hotel....
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The negotiators weren't overwhelmed, they were either terrible... or in on the fleecing. Foxconn has done this before. They have people that examine every contract to maximize credits to MAKE money doing as LITTLE as possible. Go look at past articles how they were "hiring" people to hit targets for the tax credits. This also wasn't the only shiatty deal the Republican led WEDC made... Kestrel is another prime example.
Anyone who suggested that Foxco
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But enough about his engagement to Melania.
Whatever (Score:2)
The only real problem is that other states will ultimately wind up paying for this shit. Who got personally enriched in the process so far? That's whose head we need to nail to a desk.
large city? (Score:2)
A town of 75,000 to 80,000 people is a large city?
Re: large city? (Score:3, Informative)
Compared to the 3 largest cities in Wisconsin, no. Compared to all other 700+ cities and towns in Wisconsin yes. If you don't think 70,000 is a large city time to get out of your large city and spend some time in small town USA. I'd call it large, it's about 400 times larger than the place I grew up.
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I'd call it large, it's about 400 times larger than the place I grew up.
What does the place you grew up have to do with anything?
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The city I grew up in was almost 40 times the population of Racine, but Racine is about 10 times the population of the small town I've lived in for the last 20 years (the area I live in is not quite country anymore, but too far from the big cities to be considered suburban)
There are over 300 cities [wikipedia.org] in the US of over 100,000 people. They total almost 30% of the US population. So I'd call Ra
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No results found for wisoninites. (Score:2)
C C Senior
Story headline (Score:3, Informative)
Foxconn was responding (Score:3, Insightful)
So Foxconn got Wisconsin to promise some hefty tax breaks, they threw up a few empty warehouses, promised a HUNDRED TRILLION DOLLARS of investment (pinky firmly lodged at the edge of their mouth) and then.... did absolutely nothing.
Trump cared (and cares) about nothing except himself and a few of his family members. A huge chunk of our society fell for the schtick. A lot of republicans held their noses and voted for him because their real goal was to stack the supreme court. Well, mission accomplished, but I want that Trump-stink to linger for decades. I want everyone who got into bed with Trump to feel the burn.
In other words, I'm GLAD that Wisconsin taxpayers are on the hook for 300 million dollars. When you let your stupid out, you get stupid results.
Re:Foxconn was responding (Score:4, Informative)
The same morons who tripped over themselves to get this deal will get re-elected. This meme sums up the republican party nicely. https://imgflip.com/memegenera... [imgflip.com]
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[this was due to] Trump's hot air about bringing manufacturing back to the poor, weak [so on and so forth]
bringing manufacturing back to the US is not a bad idea, nor is it impossible, as was a common conclusion here a number of years ago.
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Also a lot of those jobs (like the automobile industry) that moved "overseas" actually moved over land, to Mexico. NAFTA is what killed American manufacturing and people are either too stupid or too easily manipulated into thinking China is the problem. A lot of the stuff China is exporting to us was actually the domain of Japanese manufacturers.
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NAFTA is what killed American manufacturing and people are either too stupid or too easily manipulated into thinking China is the problem.
It would be easy to say it was NAFTA however as I pointed out mostly American automakers were moving jobs to Mexico while Japanese automakers were creating more jobs in the US.
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Youre actually defending Trumps record? You just sound dumb. His administration was a steaming pile of crap. You got your supreme court justices at the cost of your pride, your dignity, any last shred of conservative principles, and the last tiny drop of consistent policy platform. Your party will be associated with the Jan 6 coup attempt for gener
Good. (Score:3, Insightful)
Maybe next time they'll stop voting for the Republicans that not only caused this mess [wpr.org], lied about it [wpr.org] and then prevented the duly elected governor from cancelling this deal [apnews.com] when he ran on for governor on cancelling this deal [wpr.org].
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The country bumpkins aren't the ones who actually control the satellite-guided tractors they're riding on, nor do they manipulate the genes of the crops growing in their fields, nor can they repair their equipment or own the rights to their seeds. And to a larger extent each year, they don't even own the land they're hired to tend to. The big city folks are in charge of all that.
But your post does prove the OP's point about being sold on some ideas fed out the GOP leadership (who also reside in big cities).
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Uhhhh I'd put my money on the person who recognizes that science is a thing over the country bumpkin who believes COVID was created by Bill Gates.
If you live in the States, you're a fantastic example of what GOP-run state legislatures have done to our education systems. If you don't, you're embarrassingly ignorant for someone not saddled with the curse of having been educated in the richest-yet-dumbest country on earth.
the reality we must focus upon. (Score:2)
lot of histrionics here (Score:3, Insightful)
1) nobody's defaulted on anything. This is entirely anticipatory, and largely fueled by anti-capitalists who have consistently misstated and misframed the Foxconn arrangement for their political ends from the beginning.
2) if they do default, there are legal courses which the government can pursue. Governments are quite good at this, in fact.
3) even the article says it explicitly "...The other option to cover the costs would be a total Foxconn pullout, which state officials said would let the government sell the land, assessed at a value of over $500 million...." so in essence the $300 'loss' is guaranteed by seizable assets worth $500 mill?
There is no question that WI officials were at the very least gullible with Foxconn's promises. They saw a big name, a big plant, jobs in a corner of the state that needs them. I don't expect this deal was any less salutary than most of the sweetheart-offers that any state offers to big business like Amazon or BMW to put an operation there.
The furor - and continuing sympathetic coverage - has been fueled by a embittered and increasingly venomous left in a state that generally leans politically right.
When the left loses publicly and repeatedly, it gets vicious. cf Elon Musk.
Re:lot of histrionics here (Score:4, Insightful)
Unless they were stupid, Foxconn set up a subsidiary just for this. When that subsidiary stops paying, the state of Wisconsin is going to learn the concept of "limited liability".
The idea that any land in the middle of farm country is worth $500M is laughable. The fact that they can't get companies to move into the buildings makes them essentially worthless. No one is going to pay $500M for it.
Re:lot of histrionics here (Score:4, Informative)
"Unless they were stupid, Foxconn set up a subsidiary just for this"
This is what's called a strawman.
Foxconn may ALSO have trained unicorns to fight government lawyers!
"The idea that any land in the middle of farm country is worth $500M is laughable"
Again, just you talking out of your ass. You have absolutely no idea of the value of commercial property. I don't know what the value is for fully improved industrial property, maybe it likewise comes with environmental set-asides and such that might be very valuable to the right buyer.
I don't know, but neither do you.
https://www.confectionerynews.... [confectionerynews.com]
Oh look, another company building a big factory in WI. And tax credits (called subsidies, whenever it's mentioned in re Foxconn, of course)! Oh noes!
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Again, just you talking out of your ass. You have absolutely no idea of the value of commercial property.
Common sense would dictate that if the property were worth $500M, a potential buyer or tenant would have already signed a lease or a purchase of that property. I see no one rushing to move into that property. Likewise if I wanted to sell my house for $500M and no one wanted to buy in a hot housing market, maybe my house is not worth $500M. If I lowered it to $1M and I get a few offers, I could say my house is worth $1M.
Re: lot of histrionics here (Score:2)
It's on the books for 500 million at Foxconn, if they don't pay the bonds suddenly they have to write off 200 Million regardless. They'll pay.
Wisconson can take quite a lot of loss on a sale and still come out ahead, Foxconn is quite fucked.
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I suggest that you consult a dictionary before posting again, because that's not a strawman.
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What would you call "Completely making up shit, and using that to defend one's position" ?
https://harappa.education/hara... [harappa.education]
Certainly https://psychcentral.com/blog/... [psychcentral.com]
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You really are a moron, aren't you. Not even able to understand the site you linked to. From your own link:
I made no suggestions to twist what you wrote. I did not attempt to redefine your stance. "Completely making up shit" (which I didn't do) isn't a strawman.
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OK, so you were just making stuff up then, I guess there isn't a fancy name for it.
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"Foxconn may ALSO have trained unicorns to fight government lawyers!"
It's perfectly reasonable to think that a company the size of Foxconn, with their global experience, would set up an appropriately firewalled subsidiary. I don't know why you're belittling that claim - it's ordinary business practice.
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Then again, maybe I work in a major multinational and understand that 'firewalling' in the way you're proposing is a lot harder than you think.
Do you think Federal and State governments just go "ah well, I guess they outsmarted us - they filed their company under a DIFFERENT NAME! Shucks!"...strike that, clearly you DO seem to believe that governments are generally stupid.
I don't disagree, they certainly can be.
But they can also be fucking implacable when $$ are on the line.
The strident Left in WI has been
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Thanks for proving my point, frothing mouth leftist.
Sorry Kyle missed you. Ah well, maybe next time?
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It's perfectly clear. (Score:2)
"...it's now not clear if the money will be paid."
It's perfectly clear. The money will not be paid.
Trump strikes again! (Score:1)
Not that he had anything to do with the deal, but since he took credit for it anyway [bbc.com] he certainly can take credit for yet another shitty business deal gone wrong.
Oops (Score:1)
Serves them right! (Score:2)
Sorry, not sorry.
If one's memory is so short or politics are so red that they WANT to see a FoxConn factory in their state I have no sympathy. Of course they got screwed. Luckily it's only money and not a population employed by FoxConn.
That's FoxConn, the company that was in the news a few years back for being such a shitty employer that they had to install nets around their buildings to catch employees attempting to commit suicide by jumping off the roof. If this thing costs the state of Wisconsin all it's
"Pledged" (Score:2)
"pledged to pay back some $300 million in bonds..." Are they contractually obligated or not? Is this like Amber Heard's pledges?
I'm of two minds (Score:3)
On the one hand, I'd love to snarkily say "and how is this different from every other sweetheart deal states make to attract jobs? C.f., for example, every publicly-financed sportsball stadium.
To be fair, we remember the failures. I don't know if anyone had done a systematic survey of all these deal to figure out how many, if any, wind up paying off. Does anyone have some non-partisan, non-preordained-conclusion research? I know my bias is to assume they're all ways to fleece taxpayers and I'd be reasonably happy to be proved wrong.
Ban Foxconn Imports from China? (Score:2)
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Conservatives are right (Score:2)
The brightest minds go into the private sector, and the lackeys end up in government. Foxconn definitely made the Republican Wisconsin government look that way, especially Scott Walker.
New mineral (Score:2)
Wisconsinite.
And the GOP debt continues to RACK UP (Score:2)
Sadly, so can the Dems.
When, oh when, will new parties emerge to destroy these 2 groups of bastards.
500300 (Score:2)
On the hook for 300 million with collateral worth 500 million if they are delinquent, such a bad deal.
Who says... (Score:1)
From each according to their ability [to pay taxes], to each [corporation] according to its [greed].
They just worship a "reformed" version of socialism :-)