Foxconn Factory Fiasco Could Leave Wisonsinites On the Hook For $300 Million - S...
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Foxconn Factory Fiasco Could Leave Wisonsinites On the Hook For $300 Million
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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.
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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 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.
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But I'm sure the money will be repaid in full as promised.
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Twitter was wise to use industry standard abandonment clauses for costs incurred leading up to it. Government officials, never as smart as private businesses. Why not ask Foxcon to put $300m in escrow or just foot the initial payment?
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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.
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Socialize all losses, privatize all profits. It’s an unbelievable deal for a few people and terrible for the rest of humanity.
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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.
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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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Not saying this in my usual smart-ass tone: Do you have any links to support your claims? All I have seen so far is both sides of the political aisle beating their usual "IT'S THE OTHER SIDE'S FAULT. BLAME THEM." drum without any detail to back it up.
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Thats an interesting narrative you’ve bought into, the Foxconn deal was known to be both a bad deal, and a failure well before democrats won the governorship (and probably is a contributing factor to the *why* they won). https://www.theverge.com/2018/... [theverge.com]
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It appears you don't have enough people around you telling you this so it's gotta be me - you suck at thinking and need to get better at it.
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Before signing a deal for a billion dollars or more, read the fine print or at least have someone explain the gist of it.
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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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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Capitalism on the way up, Socialism on the way down.
Rat race, rat win. -
In the Soviet, (i.e. autocratic), States, profit dominates you! [but keep voting GOP no matter what].
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What is clear here is that the desperate Wisconsin officials were greatly overwhelmed by the Foxconn negotiators. Every step of the way Foxconn transferred risk to the local taxpayer. This goes beyond the normal deals put in place to attract business. It is negligence and I am surprised the local taxpayers have not filed suite against those who promoted the deal.
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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.
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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.
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Except that it was clear when the GOP was still in power that FoxConn was not living up to their end of the deal. The deal was made in 2017. By 2018, FoxConn had only hired 156 of the required 260 positions. That says nothing of the lack of progress of construction. At different points, it was found that FoxConn had not even applied for construction permits much less started construction to meet milestones. Yet it was all the new governor's fault that these things happened.
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Except that it was clear when the GOP was still in power that FoxConn was not living up to their end of the deal.
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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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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I don't believe for a nanosecond that he's only worth 300k. I'm a 40(ish) year old pleb sitting in a 8x8 cubicle right now, and my net worth is more than his? Bullshit meter is off the charts.
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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!
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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]
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It's not incompetence if you don't care, only willful negligence. Which frankly, requires competence to get away with. The Republicans weren't incompetent in this story, just evil.
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Wasn't this at least in part something that Trump had a hand in? I'm asking, TFA mentions that it was announced at the White House and Trump called it the 8th Wonder of the World, but doesn't say exactly how he was involved.
I'm just thinking that a lot of people invested in stuff that was backed by Trump, only to end up losing their money.
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If I recall correctly, he wasn't directly involved in any way. He just swooped in afterwards, thumping his chest telling everyone how great the Republican leadership was for getting this deal done.
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filed suite
Filed suit. That lat "e" turns a legal matter into a multi-room pad at a hotel....
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And yet critics of the plan from the beginning warned of this exact scenario where FoxConm would not build a plant and leave the taxpayer with hundreds of millions of unpaid debt. Sunk-cost fallacy or delusion whatever excuse is convenient.
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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.
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. . . with its focus on Racine, the nearest large city . . .
A town of 75,000 to 80,000 people is a large city?
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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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What does the place you grew up have to do with anything?
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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.
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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It's a suburb of Milwaukee and about 70 miles from Chicago.
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Google is telling me there may be a typo.
C C Senior -
Um, you need to edit the headline from Wisonsinites to "Wisconsinites", just sayin...
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to Trump's hot air about bringing manufacturing back to the poor, weak, victimized, suffering red states that voted for him. How quickly people forget. Trump went all in on his ranting and raving as soon as he won the election, making all sorts of threats and promises that had absolutely zero basis in reality. Very few countries or companies took him seriously. Foxconn was one of the few that actually did something, but they were smart enough to realize that Trump didn't really want anything real - he just wanted talking points.
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.-
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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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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If the electoral college system was scrapped and it became a popular vote like most other countries, the republican party would be out the door and dead overnight. The whole country would slowly move left to about where most other western countries are due to increased wealth redistribution from the top to the bottom.
Yeah, I too can't wait for a cultural revolution to sweep through the US, and for us to make a great leap forward. I also look forward to all the crop failures and famine such a move would cau-
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.
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What you write of is so true, and so painful to confirm as our reality.
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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.-
2) if they do default, there are legal courses which the government can pursue. Governments are quite good at this, in fact.
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".
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?
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.
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"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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You suck at thinking.
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"...it's now not clear if the money will be paid."
It's perfectly clear. The money will not be paid.
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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.
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Looks like auto-incorrect did it’s thing on “Wisconsinites” in the headline.
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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
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"pledged to pay back some $300 million in bonds..." Are they contractually obligated or not? Is this like Amber Heard's pledges?
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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
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Easy enough to fix, just ban all Foxconn manufactured products from being imported to the US until they pay their bills. Otherwise, you've been conned by the fox...
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