
Foxconn Is Reconsidering Plan for Manufacturing in Wisconsin - mikek
https://www.nytimes.com/2019/01/30/business/foxconn-wisconsin-manufacturing.html
======
bilbo0s
I have freely admitted for a while now that Wisconsin is a fairly corrupt
place. (And WEDC, the guys who came up with this, has been among the
organizations I've pointed out the most.) That said, the more this Foxconn
thing goes on, the more I realize how much we've been screwed over in
Wisconsin by Walker and his cronies.

The Foxconn thing never even _sounded_ right from the outset. Four to five
billion? To manufacture LCDs?

I mean, I know I'm a bit more technically inclined than most people in
Wisconsin, but didn't anyone stop and think for a second, "Hmmm... Wait? Isn't
the future supposed to be OLED? This doesn't make any business sense for
them????"

Now these Foxconn guys come back with a story about "R&D"??????

I'm just saying, isn't their entire _business model_ manufacturing _other
people 's_ R&D? So the best you'd get is R&D to enhance their manufacturing
processes maybe? Throw in a small chance at some business process R&D???? (I
know, it's a stretch, but I'm trying to be generous.)

Now again, I realize I'm a bit more technically inclined than most
Wisconsinites, but does anyone else find it more reasonable to do that sort of
R&D in places closer to your actual manufacturing? Even suspending that
disbelief for a moment, you have to ask yourself why you'd need 13,000 people
to do that? You don't. You'd just never do that if you owned Foxconn.

This whole story just doesn't add up. Even from the start, it never did. How
could Walker and his cronies have ever fallen for any of this?

~~~
bduerst
As someone who grew up in rural Wisconsin, I can tell you that there has
always been a streak of anti-intellectualism, but the past few years it has
transformed into something even _worse_.

The suspension of critical thinking that comes from ingesting information,
sourced from anything tagged as "Republican", has left the Wisconsin people
vulnerable to being taken advantage of.

I speak from experience and discussions with people I had last summer. For
example, some didn't believe me when I told them that Foxconn had to put
suicide nets around some of their factories. They believed Foxcon is this
shining star of a company come to save them, because that was what they were
told by Republican leaders.

~~~
waffle_ss
I also grew up in rural Wisconsin, but lived in Madison for several years as
well, and I've seen the other side of that coin too. There's plenty of snobby
progressives who live in their blue bubble, often working for the state gov't
or university, and assume they know what's best for the hicks in the rest of
the state. The /r/wisconsin subreddit is full of the type.

The tribalism from both ends is definitely disheartening.

~~~
bb88
The fact that you label the two sides as "hicks" and "snobby progressives"
only hurts your stance.

I think we can agree that both sides don't typically listen to each other, and
if we're all using language like that then we never will.

Why should I debate you on medicare subsidies, e.g. if you've labeled me a
"snobby progressive" and then have taken the victim role to boot?

~~~
stuart78
I think the poster was using deliberately provocative words to call attention
to the emotional angle of the debate, not making those judgements themselves.

~~~
bb88
Except that it was awfully one-sided and appeared to be labeling actual people
directly (those in r/wisconsin)

~~~
waffle_ss
It was one-sided because I was replying to a comment calling rural
Wisconsinites easily-misled Republican voting robots. It was an attempt to
show balance in the other side's perspective.

------
swozey
This is a fantastic Podcast on the situation and what went down in Wisconsin.
The NDA Foxconn made council members sign to where the council couldn't even
talk to their citizens about it will really rub you the wrong way;

[https://www.gimletmedia.com/reply-all/132-negative-mount-
ple...](https://www.gimletmedia.com/reply-all/132-negative-mount-
pleasant#episode-player)

~~~
quizme2000
The 2 things that will make your blood boil is when the city counsel couldn't
get some residents to sell their property b/c they had nowhere to go, they
declared it blighted/contaminated and forced eviction into actual blighted
homes.

The second is the town took on a massive loan to buy all the land it needed,
it will now default. The state of WI backed the town in the loan and will now
have to pay out for this nonsense.

~~~
mikeryan
This is an inherent problem with city governments. I don’t know how rural
Wisconsin city councils work but I know for damn sure Berkeley’s city council
would be completely out of their depth negotiating a multi billion dollar deal
with the likes of a Foxconn.

~~~
dragontamer
It wasn't a rural city council that made this deal. It was Gov. Scott Walker.
The executive for the entire state.

------
djoldman
See this news release by Mount Pleasant:

"...The local development agreement stipulates that, if, for any reason,
Foxconn’s investment on the campus falls short, the company remains obligated
to support a minimum valuation for the project of $1.4 billion, which will
more than pay for all public improvements and development costs for the
project."

[https://www.mtpleasantwi.gov/CivicAlerts.aspx?AID=219](https://www.mtpleasantwi.gov/CivicAlerts.aspx?AID=219)

~~~
eps
Is there a timeframe on this obligation?

And if the project is cancelled, it'd be logical that Foxconn will be limited
to costs _incurred to date_. It's not like 1.4B is an open unconditional
check.

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huebomont
I will never get over how "reporting" seems to amount to publishing a bunch of
quotes by people without assessing their credibility. Why give Wisconsin
Republicans, noted bad actors, a free mouthpiece in this article at all, let
alone without context for whether their comments about "economic uncertainty"
under the Dem governor hold any water?

~~~
wahern
Alternatively, the reporter is giving those Republicans rope to hang
themselves. It all depends on how many people in the audience are capable of
recognizing the bullsh*t for what it is.

And don't forget, that number might be small today but could grow much larger
down the road. One aspect of reporting is creating a record. Without a record
there can be no accountability. One function of a newspaper article is to
provide context for quotations, and in particular a timestamp.

~~~
huebomont
yes, but that can all be accomplished while also contextualizing their
comments with the facts of the situation.

------
harryh
So a lot of people seem to be saying something along the lines of "Wisconsin
spent 4+ billion and now they're getting nothing in return."

But WI didn't write a 4 billion dollar check or anything. It was a promise of
tax credits. If it turns out that Foxconn basically doesn't do anything in WI,
then they won't make any money there so they won't owe any taxes so they won't
use any of the credits.

So the whole thing becomes a much ado about nothing sort of situation (aside,
I suppose, from the big waste of time spent negotiating everything).

Is this basically right, or am I misunderstanding something?

~~~
mlindner
You're correct but don't let anything get in the way of ycombinator users
blaming evil large corporations for problems. Most of the top posts appear to
have not even read the article that was posted.

The reason things have changed is because of knock-on effects from Huawei,
IMO. Foxconn would be in a very similar situation if they had proceeded.

~~~
shaki-dora
I’m as willing to blame anything on big corporation as a Marxist flying
United. But in this case I strongly feel responsibility lies with the state
government, which should never have maneuvers itself into a position where it
could be harmed in such a way. That’s what contracts are for, after all.

HN was also harshly critical of Amazon’s HQ2 search/reality show and the
willingness to subsidies successfull corporate giants with race-to-the-bottom
tax incentives.

------
nimish
They got their $4billion handout from Scott Walker and are predictably walking
back on it.

Corruption from the so-called party of "fiscal responsibility"

~~~
bilbo0s
Actually, they didn't get it yet.

That said, yes, there are already millions in "sunk costs" that have already
been borne by the people of Wisconsin. But at a time like this, it's probably
best not to let the "Sunk Cost Fallacy" get the better of you.

~~~
vanadium
They _finally_ finished construction on the I-94/I-41 upgrade (also
accommodating a new Amazon warehouse near Kenosha) a couple of years back, and
this Foxconn agreement meant having to tear it all up again and redo it even
wider than before. It's (IMO) unsafe to drive through in the Winter time.

It's a perpetual mess in Southeast Wisconsin. The problems extend far further
than just the economics of the deal, into perpetual construction, shady
eminent domain and reclassification of generational farms as "blighted", etc.
It's criminal how much this one "deal" cost the area.

~~~
bilbo0s
Don't misunderstand me, I'm a Wisconsinite as well. So I'm incensed by this
whole cluster-F. I was just pointing out that while we have spent millions on
construction and royally screwed over a lot of farmers and people in
southeastern WI, we haven't actually handed over any money to Foxconn yet. So
we may be best advised to take our losses, which I concede are considerable,
and leave the table so to speak.

I'm just trying to be rational.

~~~
vanadium
It's definitely not a knock on you or your position; it's more a knock on
these sorts of politically-motivated, but empty, sweetheart deals. Walker's a
particularly efficient trigger when the subject comes up.

Also, I'm just a bit bitter as someone who travels back to my hometown area
(the Fox Valley) often from Chicago and it's never the same thing twice. ;)

~~~
logfromblammo
I'm not so much bitter as filled with pity, to see all the effort Kenosha went
to to try to recover from the loss of AMC, and then the remaining Chrysler
factory jobs. But the downtown streetcar from nowhere to nowhere takes the
prize for worst idea. The only way for it to be sadder is if it were an
elevated monorail.

The reason people stay is that nowhere better wants them to come. And they can
at least scrape some value out of the traffic between Chicago and Milwaukee,
and from the far-flung commuters, and Chicagoans looking for a cheaper place
to tie up their weekender sailboats during the summer.

13000 jobs would have been a real boon for the area, if they were ever real.
But the Rust Belt is rusting, and states and communities are competing against
one another to be the last spots of steel left, when everything else around is
grimy red holes. Kenoshans will vote for anyone that promises more jobs or
better jobs, no matter how transparently false the story may be. Their dads
built cars, and now they're stuck cleaning the go-karts at Action Territory,
or waiting tables, or commuting for an hour or more each way. So the one who
tells them the most comforting lie wins.

I think it's probably the exact same story in Janesville, after the GM plant
is finally closed for good, with no backsies. In another 10 years, someone
will promise them a big manufacturing plant there, and the voters will fall
for the exact same trick, all over again.

------
helipad
There was a good Reply All podcast episode about this story in early December:
[https://www.gimletmedia.com/reply-all/132-negative-mount-
ple...](https://www.gimletmedia.com/reply-all/132-negative-mount-pleasant)

The inevitably was sadly clear to all but those who had the power to make it
happen.

~~~
apetrovic
Also worth listening is a follow-up with the reporter (Sruthi Pinnamaneni) on
The Verge podcast:

[https://www.theverge.com/2018/12/11/18136020/foxconn-
wiscons...](https://www.theverge.com/2018/12/11/18136020/foxconn-wisconsin-
deal-reply-all-vergecast-interview-sruthi-pinnamaneni)

------
sizzzzlerz
This whole sordid affair is so reminiscent of how wealthy sports team owners
play cities against one another to see which of them is willing to finance the
most of their billion dollar wet dreams. Las Vegas, I'm looking at you! And
Phoenix, you're next. Seattle, well, it's too late. You've already be scammed.
Invariably, its a classic case of socializing the costs and privatizing the
profits.

~~~
cr0sh
As someone who lives in Phoenix, I'm pretty certain it's too late for us as
well...

------
jtlienwis
Corruption started its latest incarnation in Wisconsin with Tommy Thompson.
Approved the state lottery which led to casinos ( Chicago mafia controlled).
Now, almost every month their is a fiduciary in some county or city government
that gets caught with their hands in the till because of their casino losses.
As for Foxconn... I keep saying this. We have almost all of the tech you need
here in Wisconsin (or the upper midwest) for making our own lcd industry. 3M
in Menomone Wi makes the Vikuity backlight material. We have pc board
manufacturing (TTMI) in Chippewa Falls. Lots of electronic design talent at
companies like Cray and HPE. So. Get in line and order the LCD production
equipment from Nikon in Japan and start making some. What exactly do you need
a contract manufacturer like Foxconn for?

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RobLach
The numbers here are staggering. The state of Wisconsin under Scott Walker
subsidized this project at a rate of $14,000-$19,000 per citizen, not
including the environmental and infrastructural impacts.

I wonder how much economic stimulus to existing businesses would be created by
dropping $15k into everyone’s pocket.

~~~
refurb
Giving a tax break to get a company to move to your state doesn’t cost you
anything if not offering it means you get no new jobs.

~~~
mikeash
Basic game theory: you should always defect, because you’re always better off.
Yet the ideal outcome happens when nobody defects.

This is why the states should agree (or the Feds somehow impose restrictions)
not to make these sorts of deals.

~~~
refurb
So what’s the incentive for governments to become more efficient, need less
tax money and attract more business?

I like the fact that states can choose to compete for companies.

~~~
mikeash
I’m not proposing to ban lower taxes, just company-specific deals like these.
A state wants to have a more friendly business environment to attract
companies? Great! Just don’t negotiate tax breaks for a single factory.

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guard0g
How many people here actually realize Foxconn is not a company from China, but
from Taiwan?!!

~~~
DoubleCribble
"Taiwan, officially the Republic of China"...[0]

[0][https://en.wikipedia.org/wiki/Taiwan](https://en.wikipedia.org/wiki/Taiwan)

------
swebs
I'm glad political posts are rarely brought up here, because this place can be
every bit as insufferable as reddit.

------
garettmd
"new realities" = -60F wind chill

~~~
rb808
Yeah lol I can imagine the Taiwanese execs used to a tropical climate getting
off the plane thinking WTF.

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m0zg
Well, a lot of people had said this plant was a bad deal for Wisconsin when it
was announced. So they can now rejoice.

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75dvtwin
Not reconsidering anymore, Foxconn will be building Gen 6 LCD plant.

Feb 1st, 2019 \--- " Foxconn Technology Group said Friday it will indeed build
a liquid crystal display manufacturing plant in Wisconsin, following talks
between President Donald Trump and company CEO and Chairman Terry Gou.

The Taiwan-based electronics manufacturer said it will move forward with
construction of a so-called Generation 6 factory, or "fab," which typically
produces screens for cellphones, tablets and small televisions. "

\---

[https://eu.jsonline.com/story/money/business/2019/02/01/foxc...](https://eu.jsonline.com/story/money/business/2019/02/01/foxconn-
now-says-indeed-build-lcd-factory-wisconsin/2744111002/)

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tibbydudeza
Conned by the Fox.

------
sleevis
I wonder if this is Foxconn's way of signaling to Trump that Foxconn wants the
Wisconsin factory to be exempted from paying the new tariffs on imports of
Chinese parts.

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rhegart
Crony capitalism, the Republicans here were awful. I hope others learn from
the mistakes

~~~
vernie
Now now, this is plain ole capitalism.

