Friday, December 29, 2017

Fox-con getting nationwide exposure - as a wasteful scam

Looks like the Fox-con is finally getting the national attention it deserves- as a boondoggle where the desperation of a Dropout Governor is making his state's taxpayers get taken to the cleaners by savvy Taiwanese businessmen.

Take a look at this report from CNN Money yesterday. One problem that the article noted is that the demands for labor from the Foxconn plant will hamper the abilities of companies that are already in Wisconsin, who are already struggling to get workers due to the state's low wages and low amount of candidates available to take those jobs.
But the low unemployment in the state has some existing businesses worried that the plant, which could employ up to 13,000 workers, will make it that much harder for them to find workers. Unemployment in Wisconsin is just 3.2%, near its record low. The entire state has only 102,000 unemployed workers.

"What I'm hearing from my employers is they can't fill the jobs they have available now," said Anthony Snyder, CEO of the Fox Valley Workforce Development Board. "I've heard companies not able to add another shift, not being able to take on orders because they can't fill them. Foxconn doesn't worry me today, but it'll worry me two or three years from now. It's another competitor for the labor we don't have here."
Which sure makes you wonder why we are throwing billions at a foreign company instead of trying to help local businesses and improve the state's wages, infrastructure and services so that the labor actually wants to come here.

The labor availability problems were also hinted at by another recipient of a multi-million dollar Walker/WEDC giveaway - the Haribo gummi bear makers who agreed to add a factory in Kenosha before the Fox-con was announced. So much so that Walker had to reassure the German company that he didn't sell them false hope.
German candy-maker Haribo was concerned about its ability to find workers for its planned Wisconsin gummy bear factory after news broke that Foxconn Technology Group was building a massive facility nearby.

Walker said [on December 1] Haribo “absolutely” was concerned and he met with company officials to calm their fears.

Haribo is planning a gummy bear factory that will employ 400 people in Pleasant Prairie. Foxconn’s big campus will be just 13 miles away in Mount Pleasant.

Walker told reporters that Manpower helped make the case to Haribo that, despite the close locations, the two companies are in different markets for workers.
In addition to the lack of available labor, what's also grabbing attention from national media is that the price tag for the Fox-con keeps growing. This jumps off of a report that Urban Milwaukee's Bruce Murphy put together last week that added up the local subsidies and added state infrastructure to the $3 billion in state tax incentives that already in the Fox-con, and the staggering numbers grabbed the attention of both CNN and this MSNBC producer.

Let's go back to Murphy's article where he puts the costs together.
Meanwhile the Village of Mount Pleasant and Racine County agreed to give Foxconn $764 million in tax incentives. The measure also commits the state to paying 40 percent of local governments’ expenses for the plant “if ever called upon to do so.”

The state will also spend $30 million on a new two-mile road east of I-94 to be called “Wisconn Valley Way,” and aimed at easing traffic congestion near Foxconn’s plant.

And last week we learned the Walker administration will also siphon $134 million from the state transportation fund to widen and improve several local roads near the future Foxconn factory, as a report by the nonpartisan Legislative Fiscal Bureau disclosed. The Department of Transportation didn’t give the fiscal bureau an exact estimate for the local Foxconn roadwork when it was requested, but the bureau found the information “referenced in a grant application for $246.2 million in federal funds for the nearby I-94 project,” the Wisconsin State Journal reported....

The Foxconn development has also pushed the state to spend $252 million to expand I-94 from six to eight lanes from College Ave. in Milwaukee County south to Highway 142 in Kenosha County. While it was anticipated this would eventually be done, it was far from guaranteed, given huge shortfalls in the transportation fund and delays in other projects. What is certain is that the I-94 widening and $134 million in local road improvements by the state will lead to longer delays or cancellations of other projects in the state...

Meanwhile American Transmission Company has announced it will build a new substation to provide electric power to Foxconn at a cost of $140 million, which will then be charged to the 5 million customers of We Energies in southeast Wisconsin. The project “essentially would ask the public to contribute still more to Foxconn through higher electric rates,” the Journal Sentinel reported.

And this isn't even adding in the costs for Racine County and other governments to buy the properties of landowners, and the extra costs that go into paying contractors to make those acquisitions. I go back to this memorable part of an outstanding article from October in Belt magazine from Wisconsin journalist Lawrence Tabak.
On October 11, some 100 affected people, many of them senior citizens, gather in Mt. Pleasant’s municipal hall to learn more about their fate. The session is conducted by Madison-based Peter Miesbauer, heir to G.J. Miesbauer & Associates, “right of way acquisition specialists.” One of a growing list of contractors brought in by Mt. Pleasant to work the Foxconn deal, Miesbauer patiently listens to the often quite specific questions and answers in repeated generalities, restating the statutory definitions of property acquisition and the statutory requirement that the buyouts will represent “fair market value.”

With eminent domain letters in hand, but no indication of tendered offers, the sense of frustration in the room is palpable.
Hmm, maybe that's why we've seen Scott Walker try to spin other economic BS stats instead of talking about the Fox-con in recent weeks. Because the scope and costs of this scam continue to grow, and the foolishness of Walker's "strategy" of throwing massive amounts of taxpayer dollars at corporations in exchange for a few headlines (and campaign donations?) looks worse by the day. And it'll cause a lot more heartbreak and frustration in 2018.


  1. Eight lane highways, improved multi lane local roads, one would think a really good high speed interurban combined with light rail feeders would not only be more economical, but more desirable in the future and sure to attract millennials, but alas......

    1. Interestingly, Haribo has just paid the Village of Pleasant Prairie over $20 mil for the site of their factory.

      Meanwhile, Foxconn is basically having their site cleared and given to them. I find that worthy of a raised eyebrow.

      And both factories will have major subsidies from both WEDC and the local,governments to build roads and infrastructure

  2. Ugg. Where do I begin? Do you believe the republican (tea party remember them?) state unemployment numbers. Don't buy the hype. Racine, actually the whole 1st Congressional District, pauie ryan's district, is crawling with unemployed, and Under-Employed. You see just as many Illinois car plates as you do Wisconsin. People working 2 or three Low-Wage jobs. Shared apartments and rental houses. Here and there a "pocket" of the so called middle class. walker wants to take Wisconsin taxpayer money and spend it on ad campaigns attaching Dems in Chicago saying, "Thanks Illinois Democrats!For all the Great Jobs coming to Wisconsin" < that ad with Scooter is already running in Chicago and SE Wisconsin on TV, internet, and radio. BTW, foxCONn said it will hire 3,000 in 4 years. , and don't forget about the toxic waste Making LCDs requires heavy metals such as Mercury, Cadmium, Chromium, Zinc, and Copper.& 22 MILLION Gallons of water from Lake Michigan a day! This is a coup. Nothing less.