Foxconn plans already being scaled back (Milwaukee, Kenosha: employment, transfer, contractor)

[James Bond 007]

Inside Wisconsin’s Disastrous $4.5 Billion Deal With Foxconn

Interviews with 49 people familiar with Foxconn’s Wisconsin project, including more than a dozen current and former employees close to its efforts there, show how hollow the boosters’ assurances have been all along. While Foxconn for months declined requests to interview executives, insiders describe a chaotic environment with ever-changing goals far different from what Trump and others promised. Walker and the White House declined to comment for this story, although a Trump administration official says the White House would be “disappointed” by any reduced investment. The only consistency, many of these people say, lay in how obvious it was that Wisconsin struck a weak deal. Under the terms Walker negotiated, each job at the Mount Pleasant factory is projected to cost the state at least $219,000 in tax breaks and other incentives. The good or extra-bad news, depending on your perspective, is that there probably won’t be 13,000 of them.

[scott53051]

The main factory, called a “fab” costs a lot to build. When times are good firms go out and build new fabs or add to their capacity. All those new fabs create a glut of LCD panels in the market. Prices fall, every producer has trouble making money and nobody wants to invest.

This is well understood. It happens in semiconductors, ocean shipping, chemicals, and industries where a long investment cycle is needed to bring on new capacity.

There has been a large amount of new LCD capacity lately, slowing demand. Add to that slowing demand from key customers like Apple and this looks like a bad time to build a new factory.

[augiedogie]

Business is far from an exact science. This is not Walkers fault. A business makes a plan and then business conditions change, and plans have to be changed. Anyone with some experience and a memory knows it happens.

40 years ago, Caterpillar was going to build a huge addition to their parts plant in Morton, Ill. The building has partly up and the early 80's recession hit. They never did build it and later tore down the building steel structure.

When we lived in Richardson, Tx, Cisco systems was going to build a massive campus. Only partially built. These things happen. Business people make mistakes, just like the rest of us.

[Empidonax]

Originally Posted by augiedogie

Business is far from an exact science. This is not Walkers fault. A business makes a plan and then business conditions change, and plans have to be changed. Anyone with some experience and a memory knows it happens.

40 years ago, Caterpillar was going to build a huge addition to their parts plant in Morton, Ill. The building has partly up and the early 80's recession hit. They never did build it and later tore down the building steel structure.

When we lived in Richardson, Tx, Cisco systems was going to build a massive campus. Only partially built. These things happen. Business people make mistakes, just like the rest of us.

Sure, of course business plans change. But the issue is that Wisconsin taxpayers are on the hook for billions of dollars in subsidies for a "deal" that may not be fully realized. In the meantime, our small businesses are struggling, our schools are struggling, the poor and needy continue to struggle. If UW had backed out on a billion-dollar taxpayer-funded promise, you can bet that we'd be hearing about it for the next several decades. Yes, it's great to have new and more well-paying jobs in the state, but at what cost?

[damba]

Originally Posted by augiedogie

Business people make mistakes, just like the rest of us.

Nope, not the same thing.

The ‘deal’ should have been written with monetary penalties for non-completion, or only certain types of limited/scaled back completion. The public should not be the only one shouldering the burden.

[scott53051]

Originally Posted by Empidonax

Sure, of course business plans change. But the issue is that Wisconsin taxpayers are on the hook for billions of dollars in subsidies for a "deal" that may not be fully realized. In the meantime, our small businesses are struggling, our schools are struggling, the poor and needy continue to struggle. If UW had backed out on a billion-dollar taxpayer-funded promise, you can bet that we'd be hearing about it for the next several decades. Yes, it's great to have new and more well-paying jobs in the state, but at what cost?

In 2018 Foxconn hired 178 employees in Wisconsin who qualified for hiring targets set by WEDC. That is 82 short of the minimum number required to claim credits. As a result, Foxconn said it is not seeking and Wisconsin said it is not paying incentives for the hiring that was done in 2018.

People like to throw the entire interstate rebuild in Racine county into this project but it needed to be done anyways. Kenosha county and Milwaukee county sections have already been widened to 8 lanes and rebuilt but the old 6 lane Racine county section in the middle was never rebuilt.

It does not look like they are backing out of Wisconsin. The parking lot is full at their corporate headquarters in Milwaukee. CEO Terry Gou just received approval to become a minority owner of the Milwaukee Bucks. Foxconn stated it is still committed to its goals of 13,000 jobs and $10 billion of investment in Wisconsin. Contracts have been awarded to 93 companies in Wisconsin and Foxconn denied it was scaling back operations in Wisconsin.

“We continue to make good progress on all fronts related to the Wisconn Valley Science and Technology Park, while simultaneously broadening our investment across Wisconsin far beyond our original plans to ensure the company, our workforce, the local community, and the state of Wisconsin will be positioned for long-term success,” according to the statement.

[Empidonax]

Originally Posted by scott53051

In 2018 Foxconn hired 178 employees in Wisconsin who qualified for hiring targets set by WEDC. That is 82 short of the minimum number required to claim credits. As a result, Foxconn said it is not seeking and Wisconsin said it is not paying incentives for the hiring that was done in 2018.

People like to throw the entire interstate rebuild in Racine county into this project but it needed to be done anyways. Kenosha county and Milwaukee county sections have already been widened to 8 lanes and rebuilt but the old 6 lane Racine county section in the middle was never rebuilt.

It does not look like they are backing out of Wisconsin. The parking lot is full at their corporate headquarters in Milwaukee. CEO Terry Gou just received approval to become a minority owner of the Milwaukee Bucks. Foxconn stated it is still committed to its goals of 13,000 jobs and $10 billion of investment in Wisconsin. Contracts have been awarded to 93 companies in Wisconsin and Foxconn denied it was scaling back operations in Wisconsin.

“We continue to make good progress on all fronts related to the Wisconn Valley Science and Technology Park, while simultaneously broadening our investment across Wisconsin far beyond our original plans to ensure the company, our workforce, the local community, and the state of Wisconsin will be positioned for long-term success,” according to the statement.

I sure hope you're right. It seems that every day there's a new announcement--scaling back, moving forward, and so on.

[augiedogie]

Yes, I'd agree, contracts could have been written with the state over minimum employment numbers. But then, if Foxxconn didnt make the numbers, now you just could end up with legal fees.

Personally, I never felt that great about a deal with Foxxconn. Ive seen documentaries about how they treat people in China, and its pretty bad. But I dont think Sillicon Valley or GM or many other companies are great to do business with. They all strike me as a bunch of greedy liars. But most states play this game of tax incentives to draw large employers, like NYC and Amazon.

[InnovativeAmerican]

https://www.cnn.com/2019/03/18/tech/...sin/index.html

[AguaDulce]

Creepy Foxconn-produced promotional video for the Wisconsin facility:

https://youtu.be/5Qr7vtF4rvE


"With all the talk surrounding Foxconn, it's hard to wrap one's arms around just exactly what is being built in Mount Pleasant. This video provides an illustration of what could be to come at the Wisconn Valley Science and Technology Park."