The Corner

Economy & Business

Oh Look, Another Case of Corporate Welfare Not Paying Off

A lot of conservatives and Republicans who like former Wisconsin governor Scott Walker were less than thrilled with his support for a massive deal with technology company FoxConn, offering a massive $3 billion incentive package so the company would build a $10 billion facility that could employ up to 13,000.  On this site last year, Jimmy Quinn called the deal “a condemnable example of corporate welfare in its most egregious form.” Jibran Khan denounced the eminent domain elements of the deal. Rick Esenberg and Collin Roth warned that the deal “succeeded in establishing a dangerous precedent.” Kevin Williamson decried “much of the Right falling in behind protectionism, ‘managed trade,’ and corporate welfare for everybody from Boeing to Foxconn.”

And now . . .  it looks like FoxConn might not be holding up its end of the bargain after all. The jobs won’t be in blue-collar manufacturing, they’ll be in white-collar research and development, and they’re projecting just 1,000 hires by 2020, not 5,000.

Gee, who saw that coming? The only good news is that the state might be able to get out of at least part of its end of the deal:

To qualify for the tax credits Foxconn must meet certain hiring and capital investment goals. It fell short of the employment goal in 2018 – hiring 178 full-time jobs rather than the 260 targeted – failing to earn a tax credit of up to $9.5 million.

Wisconsin’s GOP assembly speaker Robin Vos and Senate majority leader Scott Fitzgerald are blaming incoming Governor Tony Evans:

In a short time, Foxconn has made a positive impact across Wisconsin with more than 1,000 new jobs, an investment of $200 million, three innovation centers and one of the largest gifts ever of $100 million to the UW-Madison. We don’t blame Foxconn for altering plans in an ever-changing technology business. It’s also not surprising Foxconn would rethink building a manufacturing plant in Wisconsin under the Evers Administration. The company is reacting to the wave of economic uncertainty that the new governor has brought with his administration. Governor Evers has an anti-jobs agenda and pledged to do away with a successful business incentive for manufacturing and agriculture.

Evers is now in an ironically difficult spot. He could get blamed for the unkept promises of thousands of new jobs if and when he runs for reelection 2022, even though he called the Foxconn agreement a “lousy deal” on the campaign trail last year.

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