Foxconn's Wisconsin 'Factory' Is An Even Bigger Joke Than Everybody Thought

from the words-are-but-wind dept

We've been covering for a while how Paul Ryan's once-heralded Foxconn factory deal in Wisconsin quickly devolved into farce. The state originally promised Taiwan-based Foxconn a $3 billion state subsidy if the company invested $10 billion in a Wisconsin LCD panel plant that created 13,000 jobs. But as the subsidy grew the promised factory began to shrink further and further, to the point where nobody at this point is certain that anything meaningful is going to get built at all.

Last October, reports emerged clearly illustrating the ever-shrinking nature of the deal. They also highlighted how Foxconn was effectively just using nonsense to justify its failure to follow through, showing that while the company hadn't built much of anything meaningful in the state, it was still routinely promising to deploy a "AI 8K+5G ecosystem" in the state to somehow make everything better. Shockingly, that mish-mash of buzz words is effectively meaningless.

Fast forward to this week, and reporters who've been visiting the state to determine the progress of the project continue to find its even lamer than everybody had initially worried. One local politician effectively compares the scandal directly to the Fyre Festival, and the piece is littered with disappointment by locals who say the company is being aggressively secretive and often misleading. Even many of the "innovation hubs", which Foxconn promised would somehow be better than the ever-shrinking factory it originally proposed, are little more than empty buildings at this juncture:

I walked to the second building in Foxconn’s technology hub, down a street lined with lampposts mounted with speakers playing smooth jazz. At first, the six-story former bank seemed to be farther along. A yellow debris chute snaked out from a top window, and there were hardhats visible in the foyer in front of heavy circular vault doors. But there was also a sign in the window that said the building was for lease. I called the number and asked whether Foxconn was renovating the building, as it announced it would last summer. No, the person on the other end told me. The building never sold.

In short there have been endless promises but little to nothing of substance accomplished, all covered in a cloak of secrecy -- which isn't going over particularly well in Wisconsin. But for its part, Foxconn itself just keeps doubling down on meaningless jargon in the apparent hope that it will satisfy those concerned that taxpayer money may have been wasted on a glorified head fake:

Foxconn is building an AI 8K+5G ecosystem in Wisconsin because the positive impact we envision far surpasses that which can be achieved by building a factory or manufacturing site alone. We are creating Wisconn Valley, which will comprise an ecosystem, or a thriving community, of partner organizations that are intimately linked and interact with each other to develop technological solutions.

Again though, that's a combination of terms that sounds nifty, but is utterly meaningless (the only thing lacking is a fleeting reference to the blockchain). While Foxconn has convinced a few folks an "AI 8K+5G ecosystem" is a real thing, the general consensus of the piece is that the company bought numerous buildings to use effectively as props to justify its massive handout, but then failed to do anything of substance with the lion's share of them. Something will come from the massive subsidies being thrown in Foxconn's general direction, but whether it's more than glorified set dressing remains an open question.

Filed Under: boondoggle, factory, paul ryan, scott walker, subsidy, wisconsin
Companies: foxconn


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  • identicon
    pegr, 12 Apr 2019 @ 6:43am

    Well, what do you know...

    A Chinese company is deceptive and misleading!

    You know that cheating people, especially but not limited to non-Chinese people, is considered sport in China, right?

    reply to this | link to this | view in chronology ]

    • icon
      PaulT (profile), 12 Apr 2019 @ 6:50am

      Re: Well, what do you know...

      It's also a popular pastime of your president.

      So?

      reply to this | link to this | view in chronology ]

    • identicon
      Drunk Uncle Sam, 12 Apr 2019 @ 7:17am

      Re: Well, what do you know...

      Yeah - that's the ticket ....

      Let's blame the Chinese for the dumbass money grubbing of our so called representatives because our esteemed representatives would never sell us up the river with their lying cheating ways now would they?

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 12 Apr 2019 @ 7:31am

      Re: Well, what do you know...

      Just from personal experience, I've always found Chinese shop keepers to be quite honest. Conversely ...

      Indian shop keepers, despite their better education and superior English language skills, tend to be terrible in math apparently, and always seem to make small mistakes that end up costing me slightly more than the official price, as well as the kind of hidden fees that you only learn about after you pay the bill, like charging extra for credit cards.

      Of course, judging an entire community by a few random individuals is hardly representative, even if it makes for an interesting first impression.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 12 Apr 2019 @ 8:57am

        Re: Re: Well, what do you know...

        " like charging extra for credit cards."

        I thought everyone who accepts credit cards is forced to pay a percentage to the bank. It is prob in their contract - idk.

        Some time ago there was an effort, by mainly gas stations, to charge less if you paid cash. iirc, that was squashed by the credit card/ banks because it was removing some of their cash cow money stream.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 12 Apr 2019 @ 9:26am

          Re: Re: Re: Well, what do you know...

          The gas stations in my area still charge less when paying with cash.

          Most retail stores don't charge extra for the use of a credit card. I assume everything is marked up a bit to cover the costs of credit processing. A few stores (and the local DMV) charge an extra fee when using a credit card, often much more than the credit card company charges.

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 12 Apr 2019 @ 10:23am

            Re: Re: Re: Re: Well, what do you know...

            Oh, I was unaware of the additional charges.
            How do they justify it?

            reply to this | link to this | view in chronology ]

            • identicon
              Anonymous Coward, 12 Apr 2019 @ 10:30am

              Re: Re: Re: Re: Re: Well, what do you know...

              "To cover the costs of processing credit transactions"

              VISA and the others do charge quite a bit depending on your contract with them. If your volume is high enough and your transactions are all under a certain amount they will charge something like 35 cents per transaction. If your volume is low of transaction amounts tend to be higher they'll charge up to 3% of the transaction amount per transaction. It's a great racket if you can get into it.

              reply to this | link to this | view in chronology ]

              • identicon
                Anonymous Coward, 12 Apr 2019 @ 10:57am

                Re: Re: Re: Re: Re: Re: Well, what do you know...

                Followup:

                They don't usually phrase it as an extra fee for using a credit card. They instead call it a discount for using cash.

                reply to this | link to this | view in chronology ]

    • identicon
      anon, 13 Apr 2019 @ 8:07am

      Re: Well, what do you know...

      It's Taiwanese not Chinese. Remember Taiwan? It's a US ally and you're fond of using it to stir up trouble in that region.

      Also it's not just the Taiwanese that are fooling you. No doubt politicians and bureaucrats in the area have been playing their part by going along with this BS.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 12 Apr 2019 @ 7:09am

    Such negotiations typically drag on for months or years, and then if and when the project finally gets greenlighted, everyone wants the plant finished tomorrow, putting great strain on the engineering and construction end.

    reply to this | link to this | view in chronology ]

    • identicon
      Drunk Uncle Sam, 12 Apr 2019 @ 7:18am

      Re:

      Is that what is going on here?
      Huh ... well then, nothing to see - move along - no worries

      reply to this | link to this | view in chronology ]

    • identicon
      any moose cow word, 12 Apr 2019 @ 7:20am

      Re:

      It's generally IF the project gets greenlit without one party getting cold feet and stringing the other along, either hoping the other gives up or to milk the deal for everything they can get out of it without delivering anything of merit. And that's first assuming both parties made the deal in good faith to start with.

      reply to this | link to this | view in chronology ]

  • identicon
    any moose cow word, 12 Apr 2019 @ 7:11am

    The GOP once again demonstrate their fiscally conservative savvy.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 12 Apr 2019 @ 7:17am

    How did no one in charge see this con job coming? It's right there in the name of the company!

    reply to this | link to this | view in chronology ]

  • identicon
    Drunk Uncle Sam, 12 Apr 2019 @ 7:20am

    Foxconn, their name includes their mission statement.

    Has Foxconn been given any money yet? Will they have to return it?

    reply to this | link to this | view in chronology ]

    • identicon
      any moose cow word, 12 Apr 2019 @ 7:25am

      Re:

      Asking for billions of taxpayers dollars back from bad deal would require politicians to publicly admit they royally screwed up. I wouldn't hold my breath.

      reply to this | link to this | view in chronology ]

      • icon
        Hugo S Cunningham (profile), 12 Apr 2019 @ 10:41am

        Re: Re:

        The politician most responsible, Republican governor Scott Walker, got voted out last November at least partly for this reason. The new Democratic governor Tony Evers can repudiate the deal if he wishes.

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 12 Apr 2019 @ 7:25pm

        Re: Re:

        There is is no money to give back .
        It was a subsidy off of taxes yet to be paid .
        Only difference between this and the AOC Amazon fiasco is that
        Amazon left while foxcon has stayed .
        Both got screwed only Amazon did it cleanly .

        reply to this | link to this | view in chronology ]

        • identicon
          any moose cow word, 12 Apr 2019 @ 10:29pm

          Re: Re: Re:

          Mega corps are not the only job creators, they're just the only ones to get huge tax breaks that makes the market even more uncompetative.

          reply to this | link to this | view in chronology ]

          • identicon
            Dennis Moore, 13 Apr 2019 @ 8:49am

            Re: Re: Re: Re:

            Corporate welfare is killing the middle/lower classes.

            The captains of industry do not realize they are shooting themselves in the foot .... again. I imagine they brag at cocktail parties about how they lowered their overhead, are now super competitive and are driving their competition out of the market ... followed by maniacal laughter.

            As they further squeeze their minimum wage work force, who needs government assistance even after 40 hours full time employment, they are removing net disposable income from their market .... who is left to purchase their products?

            Not only that, but then there is the resulting drop in tax revenues due to the lowered salaries. Who is going to pay taxes in order to support the corporate welfare house of cards?

            reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 12 Apr 2019 @ 7:54am

      Re:

      Companies don't get bribed with cash. It's more like tax abatements, infrastructure improvements, and the like. Like building new electricity, water, and sewer plants and lines, widening existing and constructing new roads, rebuilding bridges, lengthening airport runways, etc, are some of the things I've seen done to rope in a foreign factory. Sometimes small land grants of city-owned land also.

      Then property and sales taxes, car registration taxes, and every other type of consumer tax is certain to increase, since the company is allowed to pay zero tax despite its heavy exploitation of municipal funds and resources.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 12 Apr 2019 @ 9:02am

        Re: Re:

        So, you are not aware of the details in this case?

        iirc, the original deal included huge tax credits ... not write offs. And of course the required utility improvements are paid for by the local populace because of all the minimum wage jobs being provided.
        amirite?

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 13 Apr 2019 @ 8:51am

        Re: Re:

        "Companies don't get bribed with cash"

        I find this a bit far fetched.

        reply to this | link to this | view in chronology ]

  • icon
    Ed (profile), 12 Apr 2019 @ 7:44am

    Follow the money trail, who is actually benefiting (besides the craven GOP politicians who've used the "creating jobs!" cry to keep getting re-elected).?

    reply to this | link to this | view in chronology ]

  • identicon
    Pixelation, 12 Apr 2019 @ 8:04am

    Looks like the Foxconn is running the henhouse.

    reply to this | link to this | view in chronology ]

  • icon
    united9198 (profile), 12 Apr 2019 @ 10:01am

    You have made a flub

    Not sure why you are blaming Congressman Ryan for the Foxconn deal. The deal was made by Governor Scott Walker, not Paul Ryan. That flub pretty much makes your whole story suspect.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 12 Apr 2019 @ 10:32am

      Re: You have made a flub

      "That flub pretty much makes your whole story suspect."

      Unless, of course, you were up to speed on current events.

      Now, how much of a flub is it anyways?
      From a quick search it appears that Ryan is closely tied to the deal and is not afraid of the association. How much was Walker involved? Most politicians leave the dirty work to their industry cohorts and simply sign off on whatever they come up with. This apparently explains their lack of knowledge after the fact. idk, why do you think the story is not as it seems? Simply because you are confused?

      reply to this | link to this | view in chronology ]

      • icon
        united9198 (profile), 12 Apr 2019 @ 12:57pm

        Re: Re: You have made a flub

        It appears you may be behind on this story. If you studied the history, you would know that Walker was the point man and dealt directly with Terry Gou on the deal. Paul Ryan played a periphery role at best. Most politicians want to show up on camera when the deal looks good, so not surprised that Ryan did that.

        The current story is that building contracts are in the process of being awarded and in the next few weeks, we expect to see millions of dollars in work underway.

        I know the Democrats were bashing this for a year until the new Democratic governor took office and now that he is on board, the tone is starting to change because the deal looks real. I would suggest avoiding more stories bashing this until the dust has settled some more.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 12 Apr 2019 @ 6:49pm

          Re: Re: Re: You have made a flub

          "I would suggest avoiding more stories bashing this until the dust has settled some more."

          Yes sir!
          Right away sir!

          piss off

          reply to this | link to this | view in chronology ]

  • icon
    norahc (profile), 12 Apr 2019 @ 10:27am

    They need all that money and tax breaks to pay for damages when ComicCon sues them for having Con in their name.

    reply to this | link to this | view in chronology ]

  • identicon
    Bobvious, 12 Apr 2019 @ 4:30pm

    SYNERGY!!!!!

    SYNERGY!!! You forgot to mention all the free SYNERGY!!!

    A big techno company like Foxconn will have invented a perpetual SYNERGY!!! generator by now.

    reply to this | link to this | view in chronology ]

  • identicon
    bobs your uncle, 13 Apr 2019 @ 2:57am

    ADMIN

    Hi Techdirt - some of the posts on this story are really offensive and incredibly racist. can you please remove them and kill the accounts of the posters? There should be no room for bigotry of this magnitude anywhere, let alone a reputable publication like techdirt

    Thankyou

    reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 13 Apr 2019 @ 3:12am

      That's what the flag button is for

      Does't work like that, as far as I know TD staff only really remove blatant spam, everything else is left up(and trust me, compared to some of the posts by TD trolls some mild/moderate racism is nothing). If you object to a comment and feel that it falls under the 'abusive/trolling/spam' category just hit the red flag button in the upper right corner of it, enough people do that and it's hidden and only visible if people choose to un-hide it.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 13 Apr 2019 @ 8:53am

      Re: ADMIN

      Obvious troll is obvious.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 13 Apr 2019 @ 8:36pm

    It's been done before. It was called a Potemkin Village.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Apr 2019 @ 7:12am

    What's in a Name?

    "...Foxconn was effectively just using nonsense to justify its failure to follow through..."

    They tried to warn you with their name.

    reply to this | link to this | view in chronology ]


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