Foxconn’s Con: Seeking Whopping Subsidies for Wisconsin, Michigan Manufacturing Jobs…If They Happen

From Naked Capitalism:

What the dodgy Foxconn scheme to build factories in the US says about Trump’s commitment to job creation.

Trump got a splash of good press in July when Apple supplier Foxconn announced a plan to bring as many as 10,000 jobs to the Wisconsin and invest $10 billion over 5 years. He’d hinted at a manufacturing deal a few weeks earlier.

However, given how states have fallen all over each other to give everything from auto plants to WalMart stores huge handouts, plus Wisconsin governor Scott Walker’s keen opposition to labor rights, there was every reason to doubt that this was much of a pro-worker development, or any kind of development other than PR. Techcrunch, in a late July story Foxconn’s long con, was dismissive:

Foxconn CEO Terry Gou and President Trump recently announced a plan to bring 3,000 jobs to Wisconsin at what appears to be a flat screen manufacturing plant.

The political press ate it up, alternatively excoriating the program for costing too much in tax breaksand crowing a win for Wisconsin’s conservative governor, Scott Walker.

 USA Today, using the fact that Michigan Governor Rick Snyder is also playing footsie with Foxconn as a news hook, raised doubts about the deals yesterday with its story, Analysis: Foxconn considers another plant in Midwest, but at what cost?:

Michigan Gov. Rick Snyder, on a nine-day trade trip in China, told the Associated Press there is a “strong possibility” Foxconn will come to Michigan after it chose neighboring Wisconsin for a $10 billion display panel plant with 3,000 employees that could swell to 13,000…

But the Wisconsin deal comes with a major caveat: It requires up to $3 billion in subsidies from state taxpayers — or $231,000 per job for 13,000 jobs. Put another way: state lawmakers are mulling a subsidy package nearly 50 times bigger than any previous one.

“Throwing money into incentives makes a slippery slope,” Steve Deller, a professor of agriculture and applied economics at the University of Wisconsin-Madison, told the Milwaukee Journal Sentinel. “(People) get so wrapped up in the winning game, in the headline of ‘we got it’ that they lose sight (of the) pretty steep price. Hard to say because we don’t know what the package looks like.”

Compounding skepticism, an analysis this week by the nonpartisan Legislative Fiscal Bureau concluded Wisconsin may not break even on incentives to Foxconn for at least 25 years.

The good news is the proposed giveaway to Foxconn is getting enough well deserved critical scrutiny that it may not get done. The bad news is that if this deal, which has the earmarks of being unserious from the outset, falls apart, it will be used to blame anti-business interests and deflect attention from sounder approaches for creating good jobs…like the glaringly obvious need for more infrastructure spending.

https://www.nakedcapitalism.com/2017/08/foxconns-con-seeking-whopping-subsidies-for-wisconsin-michigan-manufacturing-jobs-if-they-happen.html