Walker’s Foxconn deal is a boondoggle and a fraud for Wisconsin

Wisconsin needs jobs. Walker carelessly rejected thousands of jobs and opportunities when he became governor rejecting the Madison-Milwaukee train line with $810 million already paid for the project. So what does he want to do so he can say he’s creating jobs when he runs for re-election as governor in 2018?

Taiwanese electronics manufacturer Foxconn is promising to build a new facility in Wisconsin in a deal that will provide $3 billion in tax incentives towards a $10 billion plant that wouldn’t be paid back for at least 25 years. Foxconn did a press release that countered Scott Walker’s jobs number exaggeration saying it will bring potentially 13,000 jobs with their statement:

The investment, which will be the largest new greenfield investment made by a foreign-based company in U.S. history, will create 3,000 jobs with the potential to grow to 13,000 new jobs in that state.

Source: Foxconn

As for trusting Foxconn in the first place, consider what happened in Pennsylvania where Foxconn investments were vaporware.

In November 2013, Pennsylvania Gov. Tom Corbett announced that Foxconn planned to invest $30 million in a “high-end technology manufacturing facility” with 500 jobs. The company has a small research operation in Harrisburg, Pa., but the factory was never built.

Similarly, the Washington Post reported in March that Foxconn has spoken of making major investments in India, Vietnam and Brazil, but with results that have not matched the original announcements.

Source: JSOnline

Let’s compare previous subsidized deals in Wisconsin that combine to about 9% of the Walker’s Foxconn deal.

Until now, the largest state subsidy ever awarded to a company in Wisconsin was the $65 million offered by then Gov. Jim Doyle’s administration in November 2010 to Mercury Marine, which was considering moving its factory from Fond du Lac to Oklahoma. That deal involved creating roughly 1,000 jobs and retaining roughly 1,900 more.

Other major awards to companies in the state since 2010 include $62.5 million to Kohl’s; $61.7 million to Quad Graphics; $47 million to Oshkosh Corp; and $28 million to Fincantieri Marine Group.

In total, those state-only awards add up to $264.2 million — less than 9% of the offer to Foxconn — but aimed to create 6,800 jobs and retain an additional 14,200.

Source: JSOnline

In terms of oversight, the epitome of Walker’s corruption and pet project Wisconsin Economic Development Corporation (WEDC) is supposed to provide tracking on the Foxconn deal. This is laughable at best, based on WEDC’s track record.

MADISON (WKOW) — A state incentive package worth up to $3 billion that legislators are considering awarding to Taiwanese electronics manufacturer Foxconn would be be overseen by a state agency with mixed results on tracking such awards and clawing back money from companies that default on them.

The Wisconsin Economic Development Corporation (WEDC) would be tasked with the responsibility of awarding up to $1.5 billion in state income tax credits for job creation and another $1.35 billion for capital investment.

Source: WKNOW

The nonpartisan Legislative Fiscal Bureau’s analysis of the bill found the Foxconn deal would cost Wisconsin $230,700 per worker.

It would take at least 25 years for Wisconsin taxpayers to break even on Gov. Scott Walker’s incentives to lure Taiwanese electronics giant Foxconn to the state, according to a fiscal analysis released Tuesday.

Walker’s bill would exempt construction materials from the state and local sales tax and hand the company up to $2.85 billion in tax credits based on the number of jobs generated. It also would exempt the company from a host of environmental regulations and borrow $252 million to rebuild Interstate 94 near the plant site.

Foxconn hasn’t picked a site yet but the company is eyeing an area just across the Illinois border. If 10 percent of the jobs associated with the plant go to Illinois residents, the break-even point would be pushed back to 2044-45, the analysis found. If 40 percent to 50 percent of the jobs go to out-of-state residents, the break-even point would be pushed well past 2044-45, the analysis said.

Foxconn hopes to open the plant with 3,000 workers. Critics have questioned whether the company really intends to add more employees. If the facility employs closer to 3,000 people, the tax benefits from the project would decline from $115 million to $27 million annually and the break-even point would come well beyond 2044-45.

What’s more, borrowing for the interstate rebuild would leave the state on the hook for $408.3 million in interest and the sales tax exemption would cost the state $139 million.

Source: Chicago Tribune

The Legislative Fiscal Bureau’s “break-even analysis” indicates the massive subsidy boondoggle Republican lawmakers want to give Foxconn would cause the state to lose money each year until 2043.

Walker wants to not only have Wisconsin taxpayers pay for the Foxconn boondoggle, he wants to allow a Chinese company to have free rein to pollute Wisconsin waters as they want without much oversight discharging dredged materials, changing the course of streams, without permits, filling in wetlands and altering natural waterways.

A public hearing is expected in about two weeks on a draft deal exempting Foxconn from state laws that are otherwise mandatory for very large projects that could harm air, water or wildlife.

Walker wants to exempt Foxconn from requirements for an environmental impact statement, a plan demonstrating Foxconn’s water usage would be sustainable and state permits for filling in wetlands, building on lakebeds and diverting streams.

“We are exempting one company from a whole slate of environmental protections without even knowing where the plant is going to be,” Jennifer Giegerich, a Wisconsin League of Conservation Voters lobbyist, said Monday.

“They are just handing autonomy to a Chinese corporation that will then have control over water in this state,” said Raj Shukla, executive director of the River Alliance of Wisconsin.

Source: Madison.com

So what kind of track record does Foxconn have with pollution in China? It’s a disaster even by Chinese environmental “standards”.

Apple’s suppliers in China are under the microscope once again, but not for employee working conditions — rather, for environmental pollution.

Chinese electronics suppliers Foxconn Technology Group and UniMicron Technology Corp. have been criticized by Chinese environmental activist Ma Jun and five nonprofit environmental organizations for polluting nearby rivers with factory chemicals.

According to the environmental groups, water with a black-green color and a chemical odor have been dumped from both Foxconn and UniMicron plants into the Huangcangjing and Hanputang rivers — which feed into the Yangtze and Huangpu rivers. “Sudsy” water is dumped from Foxconn twice a day.
Source: DailyTech

Besides Walker wanting to strap Wisconsin taxpayers with billions in subsidized tax punishment, using an incompetent WEDC to track the Foxconn project and allow dangerous anti-environmental policies to appease a Chinese billionaire is purely an absolute fraud. Voters in 2018 need to ask whether paying $519 per person for Foxconn jobs that have horrible oversight and harmful pollution repercussions is a good idea.