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Shocking News: Wisconsin's $4.1B Foxconn Giveaway Might Be a Bad Deal

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The Verge has a nice story on this incredibly shocking development.


Realistically, the payback period for a $100,000 per job deal is not 20 years, not 42 years, but somewhere between hundreds of years and never,” wrote Jeffrey Dorfman, an economics professor at the University of Georgia, in a story for Forbes. “At $230,000 [or more] per job, there is no hope of recapturing the state funds spent.” And this was before the subsidy had risen to $4.1 billion, or about $315,000 per job.


But wait, there's more! It's a horrible deal as promised, but even with all that taxpayer money being thrown at them, Foxconn doesn't seem like they'll hold up their end of the deal. 



Foxconn wanted Corning to build a glass factory nearby so that Foxconn could build LCDs for 75" TVs (which you can't ship very far), but Corning wanted a huge subsidy (for 2/3s the cost of the plant). When that didn't happen, Foxconn decided to make much smaller panels, which requires a smaller plant. The reduced plant will probably only require a $2.5B investment, rather than the $10B they first promised.


And even that might not last. Foxconn is now saying they want to work on "AI 8k+5G." It's anyone's guess what that combination of buzzwords means, but what they have said is that it'll probably involve a much more automated, robotic workforce, eliminating most of the blue collar jobs.


Some of the subsidies get paid out when Foxconn makes investments and creates jobs, but they collect at least $1B in subsidies regardless of how many jobs they create.


As a bonus, Scott Walker also gave Foxconn a free pass to destroy the environment, so as you might imagine, there are a few red flags popping up, even without an actual plant existing yet.


If only anyone could have foreseen such an outcome. 

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All this means Foxconn needs far fewer assembly line workers. “If, six months ago, you asked me, what would be the mix of labor? I would pull out the experience that we have in China and say, ‘Well, 75 percent assembly line workers, 25 percent engineers and managers,’” Woo said. But “now it looks like about 10 percent assembly line workers, 90 percent knowledge workers.”


Almost all the actual assembly line work, he added, will be done by robots.

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I live a short hop over the boarder to the south in Illinois from where they're planning on building the plant and my town and a bunch of others have written complaints that the Foxconn plant will exacerbate flooding issues downstream of the Des Plaines River. Not that anyone in Wisconsin cares or will do anything about it.

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Even better: Foxconn is now considering bringing in Chinese labor to staff the new facility. Foxconn denies it, and their word is their bond, so I'm sure it's just a false rumor.


To be fair, this is the exact reason that Tim Cook cites when he talks about why they don't build iPhones in the states. It's not necessarily the low cost of labor, but the supply of labor skilled in manufacturing.

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9 hours ago, SimpleG said:

It now plans to employ just 1,454 people after bulldozing dozens of homes to make room for a factory Donald Trump once touted as the "eighth wonder of the world."


These deals are designed to fleece taxpayers and enrich businesses so I'm unsurprised.

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