The following is presented as part of The Columbian’s Opinion content, which offers a point of view in order to provoke thought and debate of civic issues. Opinions represent the viewpoint of the author. Unsigned editorials represent the consensus opinion of The Columbian’s editorial board, which operates independently of the news department.
At the White House celebration of a planned new factory in Wisconsin — “the size of three Pentagons” — the Great Negotiator was all smiles. That would be Terry Gou, CEO of the Taiwanese electronics giant Foxconn.
The guy standing next to him was Donald Trump. The president said Foxconn would invest $10 billion and create up to 13,000 well-paying manufacturing jobs. He later called the project “the eighth wonder of the world.” That was 18 months ago.
The ninth wonder of the world is that anyone took Foxconn’s word seriously. Foxconn has a history of making flashy job announcements and then not providing the jobs. The American side got a foretaste of disappointment last month when Gou’s special assistant, Louis Woo, told Reuters, “In terms of TV, we have no place in the U.S.” Only then did Foxconn publicly announce a change in plans. The Wisconsin plant would be more focused on research and development.
An uproar followed, and Foxconn changed its wording. Yes, there would be R&D but also some screen manufacturing. Even with that revision, this means there won’t be anywhere near 13,000 choice blue-collar jobs. And that assumes you believe a word the company says.
Six years ago, Foxconn announced it would invest $30 million in a plant in Pennsylvania. It didn’t. Later, it said it would spend $5 billion in India and create 50,000 jobs. So far, nothing. It said it would invest up to $10 billion on an electronics plant in Indonesia and then lowered the figure to $1 billion.
In hammering out the deal for an “advanced manufacturing facility,” Americans got rolled. Wisconsin’s Republican governor and Legislature put state taxpayers on the hook for more than $4 billion in incentives. This would have amounted to a subsidy of $15,000 to $19,000 per job per year.
Dangling taxpayer dollars
I note that this screwy attempt to buy jobs was the handiwork of Republicans not because Democrats don’t do stupid deals — they do — but because handing out taxpayer subsidies goes against what conservatives say they believe in. Rather than improve the business climate for all employers, Wisconsin Republicans chose a “winner” on whom to shower the taxpayers’ money.
These are the same state leaders who claimed they had run out of funds for the University of Wisconsin. Politicians are buying bragging rights about creating jobs. The hope, of course, is that the public doesn’t understand how much it’s spending for those jobs.
The only rationale for building in Wisconsin was as protection in the event of a trade war with China. Gou probably now figures that Trump’s trade war isn’t going to go far.
Trump tweeted recently, “Great news on Foxconn in Wisconsin after my conversation with Terry Gou!” Boy, does Gou have him pegged.
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