
Wisconsin’s $4.1B Foxconn factory boondoggle - gok
https://www.theverge.com/2018/10/29/18027032/foxconn-wisconsin-plant-jobs-deal-subsidy-governor-scott-walker
======
bonestamp2
> The LCD screens being made by Foxconn require benzene, chromium, cadmium,
> mercury, zinc, and copper ... The Walker administration had also exempted
> Foxconn from the state’s usual environmental rules, allowing it to discharge
> materials into wetlands...

WTF? Wisconsin is a beautiful state with rich wetlands and farmland. Letting a
Taiwanese* company fuck that up for 13,000 jobs that will never pay back the
incentives makes no sense, other than a small tick on Walker's re-election
campaign resume which he is now shying away from anyway. This project needs to
be cleaned up or killed before it starts to literally kill people in
Wisconsin.

~~~
rayiner
The article is painting a pretty misleading characterization of the wetlands
issue. Foxconn isn't being permitted to "discharge" heavy metals into
wetlands. Foxconn is being permitted to fill certain isolated wetlands (
_i.e._ wetlands that are not connected to rivers or lakes that would put them
under federal jurisdiction) with the requirement that they create 2 acres of
additional wetlands elsewhere for every acre they fill in:
[https://journaltimes.com/business/local/dnr-foxconn-to-
creat...](https://journaltimes.com/business/local/dnr-foxconn-to-create-more-
wetlands-than-it-fills/article_8c9d9440-350a-5042-bd10-3ac18920c02c.html).
That's more than the usual state law requirement of 1.2 acres created per acre
of wetland filled in.

There's no indication, moreover, that Foxconn has received waivers from
ordinary state and federal rules that regulate dumping heavy metals into the
soil. The article misleadingly tries to suggest that by juxtaposing the fact
that the LCD panels "require benzene, chromium, etc." with the fact that
Foxconn has been authorized to fill in certain wetlands.

~~~
strange_quark
Regardless of whether or not they're going to discharge heavy metals, they're
planning on drawing up to 7 million gallons of water _per day_ from Lake
Michigan outside of its basin on what amounts to a technicality in the Great
Lakes Compact. Also the factory itself is going to be so large and built on a
flood plain that it could cause flooding just over the border in Illinois
because rainwater won't have anywhere to go.

~~~
danso
FWIW, the allowance of 7 million gallons/day from Lake Michigan is apparently
a "0.07 percent increase in the total surface water withdrawals from Lake
Michigan", according to the state's Dept. of Natural Resources:

[https://www.jsonline.com/story/news/politics/2018/04/25/dnr-...](https://www.jsonline.com/story/news/politics/2018/04/25/dnr-
approves-diverting-lake-michigan-water-wisconsins-foxconn-plant/551542002/)

~~~
strange_quark
Sure, but it violates the compact. The compact only allows use of the water
inside the basin. What's going on here is the factory is going to use water
from Racine (which is on the lake) and therefore allowed to draw the water
even though the factory itself is outside the basin.

------
uxp100
> In both cities, the company said it wanted to attract top talent from area
> universities. But Milwaukee, Green Bay, and Eau Claire are homes to some of
> the state’s lesser universities, and it was unclear why these graduates
> couldn’t simply drive down to the Racine plant to apply for jobs.

What? Eau Claire is 260 miles away from Racine. Green Bay is 150 miles. An Eau
Clare location can attract people who want to stay near Minneapolis. And the
Downtown Milwaukee location is a more desirable place to work to Milwaukee
metro residents than out in Sturtevant, home of that one Amtrak stop.

You can't put a 4 square mile factory downtown, but I'm not sure why all your
engineers have to work at the factory.

Also, lesser universities? They mean not Madison. But if you're ruling out
Madison (maybe they figure a Madison to Milwaukee commute is reasonable), they
seem like good choices. Maybe La Crosse lost out to Eau Claire because of
proximity to Minneapolis?

~~~
HillaryBriss
OTOH, wouldn't FoxConn just hire any qualified person who applied from
anywhere? they're not limited to UW grads or even Wisconsin residents.

~~~
tfehring
Any qualified person who's willing to move to the Milwaukee area. If you're
not from Wisconsin and you're willing to move out of state after graduating,
of all the places you could move to, why on earth would you choose Milwaukee?
I like Milwaukee, I went to UWM for undergrad, and I might have stuck around
after graduating if the job market were better. But if I weren't from
Wisconsin (and especially if I were from somewhere with a warmer climate), I
don't think I'd even consider it.

------
simias
The “AI 8K+5G” buzzword bonanza is marvelous. I'm surprised they haven't
thrown cryptocurrencies and IoT in there for good measure. I'm also surprised
to read that:

>The Walker administration had also exempted Foxconn from the state’s usual
environmental rules, allowing it to discharge materials into wetlands and
reroute streams during construction and operation. The state also exempted the
company from doing an Environmental Impact Statement.

How is that even a legal possibility? The state's administration can just
decide to suspend these rules on a case-by-case basis without any kind of
supervision or accountability?

~~~
jpfed
>How is that even a legal possibility?

Walker didn't do it unilaterally; the legislature passed a law to exempt
Foxconn specifically. They are considering giving Kimberly-Clark a similar
deal:

[https://madison.com/wsj/news/local/govt-and-politics/gop-
law...](https://madison.com/wsj/news/local/govt-and-politics/gop-lawmakers-
call-extraordinary-session-on-foxconn-style-aid-
package/article_9b94b4bc-0972-553d-8c6b-379cebbd1269.html)

Wisconsin is under one-party control, which makes many things legally
possible.

------
jtlienwis
What I find funny is that Wisconsin already makes a large number of the
components needed for LCD monitors, TVs etc. 3M in Menomene makes the difusers
that spred the light in back of the screen. There is TTM in Chippewa Falls
that makes pcb boards that are needed for the electronics. There are IC design
houses and computer makers (Cray Computer and HP) that can design the
electronics. Foxconn buys the equipment to make the LCDs from the Japanese
(Nikon) and they hire the workers to run them. Why not just eliminate the
middle man (Foxconn) and make our own? I'm not sure the cost would have been
much more.

~~~
Sephr
Newer LCD displays will forgo the diffuser for mini-LED FALD backlights.

------
Animats
What a sucker of a governor. "But all the other subsidies, worth more than $1
billion, will be paid regardless of money invested or jobs created."

(See also: most stadium deals.)

~~~
bilbo0s
I'll just say that while I realize that Wisconsin is extremely corrupt, in
looking around the nation I've started to get the feeling that most of the
other states are likely as corrupt as ourselves. The difference is that in
Wisconsin we, at least, still have people that get mad about it, and
occasionally we even have mass protests.

The main problem here, (and it's frustrating), but the main problem is that
due to the way the system is structured, we can do nothing about all the
corruption. I don't like always being on the national news because of the
latest governmental thuggery, neither does anyone among my family and friends.
(And I was born and raised in small town Wisconsin.) There's just so little
the average person can do, so you just sit in Markesan, or Racine, or
Independence, or LaCrosse or wherever and you just stew in your anger.

Then it even gets thrown in your face on Hacker News.

~~~
danans
> I'll just say that while I realize that Wisconsin is extremely corrupt

Can you be more specific about what you mean by "corruption" in this instance?
Repeatedly pointing to a faceless "corruption" de-focuses the conversation
from the specific issues with this deal, including the magnitude of the
subsidy, and what might be the lack of recourse for WI residents against
Foxconn.

Is it to suggest that Gov. Walker had expected, or at least decided it was
acceptable if Foxconn significantly altered their plan in a way that
undermined the deal, in return for a short term political "win".

If not, then what is the "corruption" you are referring to in this situation?
Weren't the terms of the deal, including the latitude it offered the parties,
fully public?

> The difference is that in Wisconsin we ... have mass protests.

Wisconsin is not the only place that has protests over corruption and
mismanagement. It's a common occurrence, especially at the local level, in
many places.

~~~
Animats
Fight back by calling the governor a sucker as frequently as possible.
Republicans are supposed to be good at business. When a governor gets taken to
the cleaners like that, it means they're too gullible for the job.

~~~
danans
If he was a sucker in this deal, then can he have been corrupt?

Or if he is corrupt (as in he knew that it was a raw deal for WI but carries
forward for personal benefit), can he be a sucker?

In this instance, is it possible he was both corrupt and a sucker? Maybe so if
he was playing WI residents while getting played by Foxconn? Not drawing
conclusions here but trying to play out the implications of what others have
stated here.

------
kevin_b_er
Money to corporations for lies about the jobs in order to win an election.
I've seen this template too many times, this just might be the biggest one
ever, however.

~~~
Nasrudith
This approach is fundamentally one of doctrine and ignoring what actually
attracts companies and it isn't even what companies say it is - those are
usually bonuses they want on top of what they actually need. It isn't taxes
but resources that can be used successfully which itself varies by businesses.
If low tax environments were really what they lusted for above all else they
would start buying up vast swathes of unincorporated land. Basically nobody
except maybe corporate farmers and real estate developers are doing that.

The good news is that desired resources vary. It could be mineral resources.
It could be location. It could be the labor pool. Infrastructure is a large
part of it along with the local labor pool or ability to host one
satisfactorily.

~~~
kbenson
It totally makes sense to provide more direct incentives to the other end of
the spectrum. What if Wisconsin could tell Foxconn that it's offering to
forgive a portion of all student debt for engineering degrees in the colleges
around the area? Or that it would reimburse citizens for technical learning
courses or training programs for likely positions in the area? Or if Wisconsin
was willing to forgive state income tax for Foxconn employees for a certain
number of years (which seems to amount to between 5-6% of income)?

All strategies that increase the attractiveness of the area by actually making
the area a better resource pool over time, and in a way that helps citizens.

------
bunderbunder
It seems like the state could have expected a much higher ROI by just picking
12,000 random Wisconsinites and writing each of them a check for $230,000.

~~~
bytematic
Or just reduce/remove tuition and student debt for uw colleges. That would be
a very interesting experiment

~~~
huragok
Sorry Comrade, that would be socialism.

------
lewis500
The subsidy ratio here is incredible. Alabama has used subsidies to lure
automakers and other factories, but our incentives are peanuts compared to
this.

For example, we are getting a $1.7 billion Toyota-Mazda plant for $350 million
in incentives, creating about 4k jobs. The state has a 4-5% income tax and
9-10% sales taxes, so I'd bet that, even if the 4k number is exaggerated, then
the state and local govts will earn much of that money back within a few years
(provided it doesn't create some pollution disaster).

------
duxup
So frustrating to see politicians on the "conservative" side of things in the
US who should be opposed to this on a fundamental level, jump into handing
over taxpayer money, the environment, and such for what appears to be less and
less.

Also what is with Foxcon's constantly changing plans with all this? It doesn't
seem like they have a coherent plan on what they wanted to do / want other
than gather up taxpayer dollars...

If Foxcon has no coherent plan, the deal should be off.

~~~
sbuttgereit
Why would you be surprised or expect them to be opposed?

I'll be honest, I think you misread what "conservatism" is really about... and
I say this as someone that thought he knew it and considered himself to be a
"conservative" for a long time.

Their pitch is smaller government, but you shouldn't construe that to mean a
non-interventionist government. They see a very active role for government in
1) foreign affairs; 2) economic activity; 3) social policy... in other words,
quite a lot of intervention. The only real difference between the
conservatives and the progressives are the goals of those interventions
(somewhat) and the how up-front they are about their positions.

Once realized that the pitch and the actual goals were saying contradictory
things... I can tell you that I'm no conservative.

~~~
amanaplanacanal
It's really hard to have legitimate political debate when you can't even find
out what people's real political positions are. My gut feeling is that the
blue team is more honest about telling you what they actually believe and
want, but I might just be naive.

~~~
sbuttgereit
[edited: I didn't like pretty much my entire text; updated to be more clear
about the same ideas]

Team Red lies about what principles they hold; there are exceptions, like
abortion, but on the whole they say they're for one thing when in fact they
are largely about another.

Team Blue is pretty up-front about their principles. For Team Blue rules much
more by the ends justifying means. So they'll tell you what they're after
generally, but will lie about/hide the details of what it takes to achieve the
ends or the broader consequences of their goals that might not be readily
apparent.

Both of them want you to have an emotional response to their proposals or
opposition than to try to have you respond rationally to facts. Lying or not,
an emotional response is stronger, harder to dislodge, and avoids pesky
details that complicate an otherwise perfectly painted, if not fully real,
picture.

------
stevecalifornia
No matter what the content, I now find it hard to read articles where it feels
like the author has a personal point to make. This is somewhere between news
and opinion. Perhaps the author's explanation of the facts is correct-- or
perhaps he is interpreting facts for his own personal views. It's hard to tell
so I just end up not really putting much weight into the article.

~~~
eropple
That seems ill-advised to me. Yeah, he has a bias. So does _literally everyone
else_. The notion of unbiased news is 1) fiction, and 2) fiction that exists
to support a status quo that may or may not be to the readers' liking or their
best interests.

An honest accounting of where one stands allows you to calibrate for it.
Dishonest impartiality--and, for reals, _it 's all dishonest_\--robs you of
that ability.

------
njarboe
In an article this long and $4.1 Billion in the title, it would be nice to see
a simple listing of the subsidies. It is hard to know what is really being
given to Foxconn. Seems like a combination of tax breaks and public
infrastructure projects. Spending $300 million to expand an interstate near
the factory a bit quicker that was slated for expansion anyway, should maybe
not really be considered a public subsidy to Foxconn.

~~~
p-squared
My recollection from earlier stories covering this deal is that "subsidy"
actually means "tax break". If that's correct, then the tone of this story is
very misleading.

~~~
simplify
How so?

~~~
p-squared
The term "subsidy" implies that the state is actively paying out cash to
Foxconn. If I'm correct that these are actually tax breaks, then the state is
merely claiming less tax revenue from Foxconn than state law would otherwise
dictate. That's tax revenue that the state wouldn't see _at all_ in the
absence of Foxconn. And if Foxconn's locally-generated revenue ends up being
smaller than originally anticipated, then it would stand to reason that the
effective reduction in tax revenue is reduced as well.

The article goes on and on about wasted subsidy funds (there are other valid
criticisms of the deal, but this is the big one). The Foxconn deal may not be
working out, but if everything is structured in terms of tax then the state
finances are not really getting impacted.

------
booleanbetrayal
It's also pretty evident, by this article's caption picture, that none of
these men had ever used a shovel before in their lives.

~~~
mrfredward
Not to mention the shovels are golden and they are all wearing suits. It could
just as well be a political cartoon about a new Gilded Age if it wasn't real
life.

------
Invictus0
Is there any way for Wisconsin to walk back the deal? If Foxconn isn't
building the plant they said they would, and aren't creating as many jobs as
they said they would, surely there's some way to prevent the disbursement of
the subsidy?

On another note, I wonder what it will take for middle America to let go of
the dream of well-paid manufacturing jobs. I understand the hope and allure,
but it's plain that this ship has sailed long ago. Watching these snakeoil
salesmen literally and financially strip-mine the country is just sad. I don't
know that there is a good solution to the problem, as these states aren't
really set up to sustain knowledge-based industries. How will they pivot into
the 21st century? I can't help but think that 20 years from now, we will still
just see more of the same.

~~~
arcseco
>On another note, I wonder what it will take for middle America to let go of
the dream of well-paid manufacturing jobs. I understand the hope and allure,
but it's plain that this ship has sailed long ago.

Liberalization of global markets has not had that long of a time to run its
course. You speak so confidently that the status quo will run eternal. What is
happening in middle America should be seen as pragmatism, the people of
Wisconsin are beginning to accept their current predicament. They are
accepting a leveling of environmental standards to foster competition with
East Asia rather than choosing to go the way of the Dodo. Is this not what
classical liberals dream of, a leveling of competition across boarders? So
quickly the west is ready to externalize the cost of environmental pollution
in the name of liberalization of markets but hypocritically don't appreciate
the same leveling of standards domestically out of necessity. Perhaps the
coasts should subsidize the cost of living in the mid-west to maintain the
cost of keeping environmental standards well above those in developing
countries.

Please don't turn your nose up at people that are desperate to make a living
and are willing to sacrifice a lot in order to do so.

~~~
restingrobot
I don't think you understand what the environmental concessions actually were.
The article tries to make it sound like they were related to the dumping of
heavy metals, but in reality they are just for the construction of the site
and water usage, (e.g. For every of acre they fill to build, they have to
create 1.2 acres of new wetlands). The company will still be held to the same
pollution standards as every other company in the state.

~~~
arcseco
>The Walker administration had also exempted Foxconn from the state’s usual
environmental rules, allowing it to discharge materials into wetlands and
reroute streams during construction and operation. The state also exempted the
company from doing an Environmental Impact Statement. At stake was a huge
swath of land: the plan calls for Foxconn to eventually own 4.5 square miles
of what had been mostly farmland. Adriaens says these exemptions and the fact
that Wisconsin is allowing Foxconn to operate unusually close to Lake Michigan
are “red flags.”

I am only going off what the article purports as truth.

------
amanaplanacanal
Do huge taxpayer giveaways to attract business ever actually work out? It
seems like we see these kinds of stories over and over again.

~~~
bunderbunder
No. Extremely consistently no.

But all the studies finding that they're a stupid idea never make it onto the
evening news, and sound bites from politicians do.

------
otakucode
With comments like ”There’s a whole lot of people out there scrambling to try
and come up with a reason not to like this, They can go suck lemons. The rest
of us are going to cheer and figure out how we are going to get this thing
going forward.” It's pretty clear what happened. Walker isn't a fan of thing
like 'reason' and 'numbers' and 'facts' and instead likes to commit billions
of others peoples money based on his faith that things will work out if he
just wants it enough.

But what confuses me is Foxconn changing what they said they would do. When
they announced that instead of building the 10.5 plant they had committed to
building, they were going to build a Gen 6 plant, why didn't the state of
Wisconsin say "OK, that's great, give back every last penny of money you have
ever received from us immediately, and then we will begin discussions on a
different deal since you have broken the contract on the first one?" Instead
they just keep giving money to Foxconn no matter what they do? Just how many
shares of Foxconn did Walker and his family and friends get for this?

~~~
restingrobot
If you read the article it explains that Foxconn changed their plans after
Wisconsin refused to subsidize a necessary Corning factory.

I think that people are forgetting that this a subsidy to build. The state is
not "giving" Foxconn money, it's just choosing not to collect taxes/permit
fees/construction costs, for them to put in the factory. Once the factory is
built, there is nothing stopping the state from modifying their corporate tax
laws to recoup this investment much faster.

Also your last statement is just preposterous notion. Governor Walker is not
personally gaining anything financial from this deal. It was a desperate bid
to push his re-election campaign. Personally I think that the deal has soured
so much that it should be cancelled, but the original $3 billion for jobs
sounded very sound. Especially for a very economically repressed location like
Racine.

~~~
Clobbersmith
At ~200k/job, why not just have the state give universal basic income to
everybody in Racine? Don't like handouts? Have them dig a giant hole and fill
it in afterwards.

~~~
ychen306
At this rate of return, they could make college free, and still get a faster
return of investment.

------
pcurve
Wow. I wish there were some type of criminal negligence law that can be
applied to something like this.

------
jorblumesea
I really wish the Rust belt would give up their dream of recapturing a large
manufacturing base and focus on educating their populace for the 21st century.
Imagine if that subsidy money was used in education. It's pretty clear that
mass manufacturing is a race to the bottom (China is now facing competition
from Vietnam), and high tech manufacturing (Germany) will not provide the
amount of jobs needed to offset the ones lost over the past 40 years. While
manufacturing should always be a component of any mixed economy, many of those
jobs are not coming back and we need to retool our workforce.

A highly educated workforce is the best way out.

~~~
cmrdporcupine
For that matter most of the rust belt states have very fertile soils and
plenty of fresh water and historically were great temperate agriculture power
houses before much of that agriculture moved to the year-round-climate cheap-
labor zone of California.

Now picture the world 20 years from now when drought and depleted aquifers
make California not as viable for intense food production as it is now.

Suddenly the east/northeast/midwest around the great lakes look pretty damn
attractive.

------
kevin_thibedeau
Reminds me of GreenTech Automotive which used a similarly subsidized factory
in Mississippi to build street legal electric golf carts nobody would ever
buy.

------
rigged-system
Serious WTF. Is this okay with people in Wisconsin?

~~~
bilbo0s
OK, what is it that you suggest we do?

Wisconsin is corrupt. Very corrupt. What might work for you in squeaky clean
Vermont, or wherever, is not going to work here in Wisconsin.

It's just not.

~~~
thrmsforbfast
Wisconsin had an extraordinarily well-functioning state government in the very
recent past.

~~~
bilbo0s
(sigh)

I've tried to explain this to people from outside Wisconsin before. Why don't
I just repost a sort of run down of just a _few_ of the kinds of things you
can expect to see from our "extraordinarily well run" government here in
Wisconsin:

> _" We've had our share of bent DA's here in Wisconsin. Probably the best
> story I can tell you about is a DA that would allow drug dealers and other
> criminals to "contribute to charity" in lieu of going to jail for their
> crimes. Of course, all of the "charities" they could contribute to were
> controlled by he and his buddies. (This way they could make sure all the
> "contributions" went for the benefit of the local community you see.) It got
> so bad that drug dealers were routing their shipments through that
> municipality because if you get caught, you just paid the bribe. I mean,
> "charity". You didn't have to go to jail.

I won't go into too much detail on this one, because it's disgusting. That
said, we have a juvenile detention facility where the guards were discovered
to have using the boys for... Well, I think you can figure it out. If not just
Google "Lincoln Hills". (but I'd recommend just ... yeah... just not googling
it.)

Moving on, we have something called the Wisconsin Economic Development
Corporation. Basically everyone chips in to a fund, via taxes, and that fund
gives money to entrepreneurs and businesses to stimulate economic growth.
That's the idea. In practice, whatever politician is in power funnels the
money to his/her cronies. They're pretty open about it too. So small
businesses in the state end up having to make do with whatever they get out of
the federal SBA. Because the big political guys take all the money from WEDC.

And that's just scratching the surface with the criminal related stuff.
There's all kinds of political and public spending related stuff that happens
here all the time. There's the typical police corruption that you need to look
out for. Man don't even get me started on Wisconsin's part in the VA nursing
home scandal. Wisconsin is so bad that at one point there were 100's of
thousands of protesters outside our Capitol building in Madison. We're just a
really bent state, and there's not much that can be done about it because of
how we're set up. There's a lot going on up here. Despite what you may have
heard on Netflix, the corruption up here is not ALL about Steven Avery.

Illustrative factoid, there is a restaurant in Madison right on the Capitol
Square. It's pretty conveniently located for the state senators and
assemblypeople. Kind of a nice place too.

What's it's name?

"Graft", I kid you not.

Located on the ground floor of a building full of lobbyists. I mean,
"lawyers". Right across from the Capitol.

I know that sounds just WAY too brazen, but it's a true story..."_

PS - People generally _REALLY_ find the part about the Graft restaurant
difficult to believe. I understand. So I encourage you, don't take my word for
it. Go ahead, Google it.

~~~
restingrobot
Fellow Wisconsinite here. I went to UW Madison when the protests you mentioned
were happening. The 100's of thousands of protestors you mentioned were bussed
in from all over the country. Many of which were bought and paid for by all
sorts of Political motivators. I literally would ask people why they were here
and they would say "because I'm getting paid $10/hr to hold this sign".

If you are going to site examples of a states corruption, at least use
concrete evidence rather than vague allusions. The only real corruption you
listed was an on individual/(small group) basis. This is not an indicator of a
corrupt system, but rather anecdotal evidence of a the most noteworthy bad
apples.

Overall in my very humble opinion I have found that the Wisconsin government
is fairly well run.

Finally I don't see how the name of a restaurant has anything to do with
government corruption. The name is purely based on its location, (within 400
ft from the capitol), and has nothing to do with politics. Also they have
great food, I would highly recommend trying it out!

~~~
thrmsforbfast
Also, those protests weren't about corruption. They were mostly about labor
policy.

------
rconti
> With other small costs added, the total Foxconn subsidy hit $4.1 billion — a
> stunning $1,774 per household in Wisconsin.

Wow. You sometimes hear of things like roadworks project taxes costing a
household $100 per year. But this kind of sum to create a handful of new jobs
and a pittance of additional tax revenue?

------
apexalpha
Why not just hand every single on of them $315k, let the market work it out.

This is such a blatantly bad deal that I don't know if this says more about
the governor or the rest of the state.

------
didibus
I feel bad for Democrats sometimes. It seems they always inherit the worst
mess.

------
qaq
Too long to read is there actual breakdown of tax incentives vs actual $ state
has to spend?

