Foxconn: We Want Our Money Back!

By Mary E. Croy

Trump trumpeted the technology manufacturing deal with Taiwanese company Foxconn as the “eighth wonder of the world” when company executives visited the White House, according to then Chief of Staff and Wisconsin GOP insider Reince Priebus. In 2017, Foxconn reached an agreement with the Walker administration, promising to invest $10 billion in the Mount Pleasant campus and hire up to 13,000 people. 

  •  2017:  The Walker administration offered up to $3 billion in handouts to entice Foxconn to build a factory in Wisconsin. It had also recently reneged on a deal in Pennsylvania where it originally promised to spend $30 million and create jobs for up to 500 people. But Wisconsin would be different: Foxconn claimed it would employ 3,000 people, and increase the workforce to 13,000 people as soon as 2022. Additionally, it promised to give $100 million to UW-Madison to create “innovation centers” and a research institute. The Walker administration pursued these initiatives despite Foxconn’s dark history of worker abuse in China: the company became notorious for employee suicides and for responding to the deaths by installing “suicide nets” outside of dorms at its facilities in China. 
  •  2018: Foxconn moved to evict families from land in neighboring Sturtevant. A dozen homes were destroyed in Mount Pleasant. The Department of Natural Resources approved a water diversion permit allowing up to 7 million gallons of water to be diverted from Lake Michigan. Restrictions were lifted and Foxconn was greenlighted to fill in 26 acres of wetlands in Racine County. At the same time the subsidy estimates ballooned to $4.5 billion. Foxconn scaled back plans—instead of a cutting-edge big screen TV plant, it was announced that the factory would build smaller panels, and the investment by the Taiwanese company shrank to $2.5 billion.
  •  2019:  Foxconn began hesitating on building any plant in Wisconsin. Meanwhile, taxpayers have spent at least $137 million on infrastructure, roads, and buying land for the project. The company hired 156 people during the year. The Wisconsin plant started work as an assembly facility that finishes production of TV displays made in Mexico. Starting pay is approximately $14 per hour with little or no benefits, despite Foxconn having promised that average pay would be $23 per hour when the deal was struck. Mount Pleasant’s bond rating has downgraded because of an anticipated increase in debts. The company also applied for and received a fire code variance to omit sprinklers in some areas of the building.
  • 2020: The company has 520 employees in Wisconsin. Foxconn promises to hire 1,500 people by May 2020. It releases figures that it has awarded around $370 million in construction, about 17% of the $2.1 billion laid out in the original application. Donations to UW-Madison are at $700,000 and the research institute has not yet been built.

So far, Foxconn has refused to renegotiate the agreement. It claims to have fulfilled the goals for 2019, and if the subsidies are approved by the state, it could receive more than $50 million this year. So far the state has not certified the tax credits. As the state and the Taiwanese corporation wrangle, plans for what the factory will make and even if it will begin this May remain uncertain. 

This whole mess shows the fatal flaws in the neoliberal obsession with “public-private partnerships” as ways of building healthy local economies. Instead of relying on the whims of a billionaire sitting behind a desk in Taipei, why not have direct public investment to build needed infrastructure and create services dictated by the will and interest of citizens? Our tax dollars would be more efficiently spent, critical improvements could be made, and our State and ordinary people would be the beneficiaries.

Thanks to Madison Public Library Reference Services for research assistance.

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