Foxconn's big jobs promises

Foxconn has agreed to invest $10 billion in a massive new plant in Wisconsin. Will it deliver?

Foxconn factory workers.
(Image credit: AFP/AFP/Getty Images)

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President Trump just claimed a big win in his quest "to revive America's flagging industrial sector," said Steven Overly at Politico​. The White House announced last week that it helped broker a deal with Taiwanese manufacturing giant Foxconn to invest $10 billion in a massive new plant in Wisconsin for manufacturing LCD screens. The plant — projected to be three times the size of the Pentagon — is initially expected to create 3,000 jobs by 2020, with an average pay of $54,000. As many as 13,000 jobs could be created over time, state officials said. In return, Wisconsin will provide Foxconn with $3 billion in tax breaks, subsidies, and other economic incentives. It's a "politically potent" deal for Trump, providing long-promised manufacturing jobs to a critical swing state that helped deliver him the White House. Chalk this up as "a huge win for an administration that has hectored foreign and U.S. manufacturers alike to build their wares here," said Adam Lashinsky at Fortune. Foxconn's billionaire CEO Terry Gou met personally with President Trump three times to work out the deal. If nothing else, the president "is proving to be a very fine Commerce secretary."

"Wisconsinites shouldn't bust out the six-pack" in celebration just yet, said April Glaser at Slate. Foxconn, which is best known for manufacturing iPhones in China, is infamous for making big promises to job-hungry communities, only to quietly back out later. In 2013, the company grabbed headlines by announcing it would build a $30 million factory employing 500 workers in Harrisburg, Pennsylvania. But the plant "was never actually built, and there's no sign it will ever happen." Similar deals have fallen by the wayside in Vietnam and Indonesia, while a plant in Brazil that was supposed to create 100,000 jobs ended up employing roughly 3,000. And even if the Wisconsin factory is eventually built, it might not employ humans for long. Last year, Foxconn boasted that it replaced 60,000 workers with robots at a single Chinese factory. "Let's be clear: The big winner isn't the taxpayer. It's Foxconn," said Tim Culpan at Bloomberg. Wisconsin is shelling out between $230,000 to $1 million per job in incentives. "Foxconn isn't building the American Dream — America is building the Foxconn machine."

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President Trump is "sending exactly the wrong message about how America's job-creation machine can best be reignited," said Greg LeRoy at Fast Company. With the White House's blessing, Foxconn pitted Wisconsin against several other states to wrangle what would be the fourth-largest economic-incentives deal in U.S. history. It's yet another example of a "race-to-the-bottom system" that allows corporate giants "to extract the largest tax-break packages possible." Meanwhile, the White House is proposing "huge cuts to other economic, community, and workforce development programs that benefit employers everywhere." Don't blame Foxconn, said John Biggs at Tech Crunch. The manufacturing giant is in the business of making and shipping products as cheaply as possible, and it will do whatever it takes to accomplish that, whether it's building robots or scoring political points with American politicians. "It is not in the business of helping beleaguered economies." The sooner everyone realizes that, the better.

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