Wednesday, February 6, 2019

Bloomberg reveals Foxconn is even more of a fraud than you think

Wanted to give you a look at Austin Carr's in-depth bombshell at Bloomberg news, which indicates that things at Foxconn are even more messed up than we know.

Carr’s article starts with the photo op in June 2018 with President Trump, Scott Walker, Paul Ryan, and Foxconn CEO Terry Gou in Racine County. The handful of workers that were there were dealing with products sent over from Mexico, and many of them were making the jobs-credit minimum of $30,000 a year, or were temps and/or tech college interns.

Then Carr says those menial employees were given a bait-and-switch by Foxconn once the politicians and the media went away.
Shortly after Trump’s visit, things got worse. A Foxconn manager at the factory, which then had only about 60 people working there, abruptly called about 15 of them—all interns —into a room to say they should seek other jobs because there wasn’t enough work to hire them full time, according to multiple people present. Two sources recall the manager telling the group, cryptically, that there were forces outside the company’s control affecting the Wisconsin project. A number of the interns, who’d received praise from Trump and shaken Gou’s hand just weeks earlier, were stunned. “It was upsetting for people,” says James Pitman, one of the former interns. “They had hyped a lot of shit up. We were used as a publicity stunt.” Foxconn says that’s insulting and that the internships ended as scheduled.

Carr notes that Foxconn was set up as a win-win, but not necessarily for Wisconsin workers and taxpayers. Instead, it was intended to allow Gou to avoid some of the problems associated with looming Trump tariffs (while setting the table to get concessions from TrumpWorld), and it would allow the Trump and Walker Administrations to have a flashy project that was intended to give an image of “job creators” to the public.
From the outset, Foxconn’s plans for U.S. expansion have been nakedly political. The first call to the Wisconsin Economic Development Corp., the state jobs agency that oversaw the deal, came in April 2017 from Jared Kushner’s Office of American Innovation at the White House. “It was from a blocked caller, and the lady on the other end mentioned a $10 billion investment,” says Coleman Peiffer, former WEDC director of business attraction. “It sounded like a wild goose chase.”

Still, when the White House dangles $10 billion, you take the meeting. Days later, Walker talked with Gou in the office of Reince Priebus, then Trump’s chief of staff. Foxconn had told the White House it wanted to create thousands of jobs somewhere in North America, and based on a recent trip he’d taken with Priebus, who’d grown up in the state, Trump suggested Wisconsin.
And the project would also be located in the district of Assembly Speaker Robbin’ Vos, with the photo ops taking place ahead of the 2018 elections. What a grand coincidence!

Once Walker, the GOP-controlled Wisconsin Legislature and the Wisconsin Economic Development Corporation (WEDC) signed off on the absurd handouts of the Fox-con, Carr says the company went off and did what it wanted. This included adjusting the scope and products involved in the project, which surprised the dupes at WEDC.
Foxconn’s changes surprised public officials tasked with monitoring the project, whose contact with the company had become strained, according to a source close to the WEDC. This source says agency head Hogan has at times seemed out of the loop on the company’s plans, that “Foxconn doesn’t tell us anything” has become a refrain within the office, and that state staffers informally discussed whether the switch to a Gen 6 plant constituted a breach of contract, because the agreement specifically required a Gen 10.5. “What was originally proposed and signed into contract is a project that no longer exists by Foxconn’s own admission,” says state representative Gordon Hintz, the Democratic minority leader and a vocal critic of the deal. The WEDC says its communication with Foxconn has been excellent.

As Wisconsin’s gubernatorial election neared, Walker remained resolute in his defense of the project while his opponent, the state schools superintendent, Tony Evers, called the Foxconn investment “horrible” and vowed to disband the WEDC for its oversight failures. On the eve of the election, the Wall Street Journal reported that Foxconn was considering bringing engineers to Wisconsin from China instead of hiring locals. Foxconn denied the story, but state officials realized there was nothing in the contract to stop that.

On Nov. 6, Evers narrowly defeated Walker in the governor’s race, partly because of the unpopularity of the Foxconn deal. According to internal messages viewed by Bloomberg Businessweek, Foxconn managers in Wisconsin stayed up late into the night rooting for Walker to catch up. When Evers won, they joked to each other that they’d have to find new jobs.
Wonder why they’d think that? Maybe because a new sheriff in town (aka the Evers Administration) that wasn’t politically beholden to the Fox-con meant that the facts about this white elephant couldn’t be hidden much longer.

Other parts of the article talks about how the Foxconn assembly site seems thrown-together, with no ability to make their own LCD materials, few if any contracted customers, lower-than-acceptable wages, and an increasing amount of robots. It underscores that there was no real planning what would actually happen at the Racine County plant. Foxconn just wanted to use the idea of the project to get positive PR in America, grab as many subsidies as they could, and they’d worry about creating actual jobs later.

And the Walker and Trump Administrations were more than glad to play along, figuring they could also trick the public with these Potemkin Villages that would give the rubes the false hope of “jobs for the future!” The Bloomberg article indicates that facade continues to this day on Racine County. Foxconn knows that they aren’t going to be anything close to the presence they told Wisconsinites they would be, but they and their WisGOP allies can’t admit it in public.
Last fall, the company’s hiring targets began dropping internally, three sources say, and executives could offer little guidance as to their long-term needs in Wisconsin. Even at Foxconn’s downtown Milwaukee office, its U.S. headquarters, recruiters were slow to extend formal offers, rarely offered competitive pay, and requested that some candidates train in Taiwan for as long as a year. The company also appeared to be bringing in foreign staff to fill certain roles. While Foxconn says it’s only used workers with H-1B visas in Wisconsin on a short-term basis, a Foxconn H-1B filing viewed by Bloomberg Businessweek lists a manufacturing engineer hired to work at the Wisconsin facility through September 2021…

Foxconn has dismissed a number of Wisconsin employees in the past several months, and managers there have discussed significant budget cuts, says a source familiar with the situation. Foxconn acknowledges turnover, but says its retention rate since November for full-time employees is 95 percent…

Almost every current and former Foxconn employee interviewed for this story predicted there will never be anywhere near 13,000 workers in Wisconn Valley. As of press time, there were only 122 job listings on the company’s website, many at least five months old. Still, in some ways, Foxconn is keeping up appearances. On a recent visit to the Mount Pleasant plot, an array of trucks, cranes, and construction workers were digging up dirt on an expanse of snow-blanketed farmland.
I’d like to say this Bloomberg article shocked me, but it really didn’t. The only thing shocking about Austin Carr's article was how pathetic and transparent Foxconn’s attempts to “keep up appearances” are, and in how GOP and WEDC officials appear to be so cynical and clueless, which made them the perfect marks for this scam.

If Chairman Gou and Foxconn are all about grabbing as many subsidies as they can, then why can’t Wisconsin give them a $100 million check and have them go on their way? It sure would be better than shelling out $400 mil in the next year for these sparsely-populated factories and a few hundred jobs that any business could have added for much less money (all Foxconn needs is to have 520 people working by the end of this year to cash in its jobs and facility subsidies for both 2018 and 2019).

If we cut Foxconn a check, we wouldn’t have to waste time and money to try to claw things back in 5 years once Foxconn falls short of maintaining the higher employment goals in those years. Plus, Foxconn could then concentrate their efforts to find another desperate group of idiotic elected officials to bilk millions out of, while Wisconsinites could close the books on this bad chapter in our history before it becomes outright horrific and bankrupting.

Here's the link to the Bloomberg article again. I know I've borrowed a lot from it here, but there's still a lot more I haven't even mentioned. Read all of it, and pass it on.


  1. Tony Evers' lip-service against the contract is misleading.

    Evers knew the Foxconn scam is widely unpopular during the campaign.

    But Tony Evers has consistently — during the campaign, the transition and now — declined to vow to challenge and work against what appears to be an unenforceable and unconstitutional contract.

    Consider even after the Rueters report, Evers was silent.

    It was only after Trump and Foxconn execs made public their ridiculous assurance that Evers went public, avoiding public forums where he would be forced think on his feet, ala Scott Walker.

    Evers' remarks reduce this $ multi-billion boondoggle to a "messaging" problem.

    "It’s just a matter of their communication strategy being more consistent," Evers said. "I’m comfortable that they’re still committed to the state, they’re committed to this Generation 6 technology, but that doesn’t mean that we (won’t) encourage them to be more transparent and consistent in their messaging." (Milwaukee Journal-Sentinel)

    Tony Evers will sell out Wisconsin.

    Evers' policy is the same as Trump's, Walker's and Republicans in the legislature, notwithstanding lip-service.

    Dems are afraid to publicly call out Evers because of a misguided ethic of not criticizing the governor.

    This is to the people's detriment.

    How much you want to bet Tony Evers does not field questions from the public on the Bloomberg piece?

  2. My perspective from inside a state agency is that there is so much to fix that FoxConn may be the least of Evers problems at this point. Walker and the GOP took a sledge hammer to state agencies and there is a lot of chaos that needs sorting. A lot of people need to be hired just to run the state. I wonder if (and hope) that FoxConn will be addressed in September when Evers can actually take more control over it. I don't blame him for not commenting on it. A lot people in that part of the state actually believe in Vos and think FoxConn is going to happen and 13,000 jobs will be created. They also think that if FoxConn doesn't happen their property values are going to plummet. There is a lot of fear. Articles like this are great. Lawsuits are great. And I look forward to the new governor addressing this as it becomes possible for him to do something other than issue a statement.