Renegotiate the Foxconn Deal
Need firm guarantees on number of jobs and range of wages.
Scott Walker and the Republican leadership in our state are rushing our taxpayers into a deal with Foxconn that will cost Wisconsin taxpayers up to $3 billion, with no guarantees of performance by Foxconn. It is overwhelmingly opposed by the business press, including Bloomberg, who described it on August 3rd as “irrational public policy,” and an “awful way to lure jobs.” Bloomberg said:
Companies often come back again and again, as blackmailers tend to, seeking yet more blandishments. And nothing stops them from walking away when times get tough.
Under the deal, Foxconn would not need to obtain state permits ordinarily required to discharge dredged materials into local wetlands. Nor would Foxconn have to submit to standard environmental impact studies and other state environmental regulations.
Large cities in China are becoming uninhabitable because of pollution. Yet Walker will relieve them from Wisconsin environmental regulations that bind other Wisconsin companies.
This deal, done in haste, is based on the desperation of Scott Walker. He turned down more than $800 million in federal train money, a partial return of federal taxes paid by Wisconsin citizens, to establish his doctrinal purity to potential conservative Republican presidential delegates around the country. He even paid a large settlement to let Wisconsin out of its initial obligations to a private company with respect to the train. That $800 million would have created more than 4,000 high-paying jobs constructing the train. He also turned down hundreds of millions of dollars in Medicaid money, to contrast himself with Governors Chris Christie and John Kasich who had accepted the Medicaid money and were running against him in the Republican primary for President.
The Republicans argue that while Foxconn is a net loss for the state, it’s worth it because satellite industries — restaurants and suppliers — will pop up in the area as a result. This is highly speculative and doesn’t justify a desperate deal.
In addition, Foxconn itself has a slippery record in living up to its commitments around the world. It has also shown actual contempt for its employees. The Foxconn CEO, Terry Gou, was quoted in 2012 at a company party held at the Taipei Zoo, where he described his one million employees worldwide as “animals.” Gou then had Chin Shih-chien, the Director of the Zoo, participate in Foxconn’s parent company’s annual review and spoke to his executives about how to manage animals based on their temperaments. Gou said “I am managing one million animals every day and it’s such a headache.” Gou will regard Wisconsin workers as the same.
A man who views his employees as animals will also view the people negotiating against him as animals, in this case sheep to be shorn. Walker has simply agreed to virtually everything Foxconn demanded, out of political desperation, to give the illusion of job creation which wouldn’t be realized until well after the 2018 election.
The Republicans are giving the impression of 13,000 jobs being created at an annual average wage of $53,000. But there is nothing in the Memorandum of Understanding that requires Foxconn to produce 13,000 jobs, or any jobs, and the word “average” is misleading. If Bill Gates is talking to a homeless person, their average net worth is $40 billion. That’s because Bill Gates’ net worth is $80 billion, and the person to whom he is speaking has a zero net worth. We don’t know how many high salaried executive, engineer, and even investor compensation is included in that figure, and how low the pay of most of the jobs really will be.
At the same time, the state should explore whether Foxconn is legit in this case, despite its slippery history, and whether a fair agreement can be reached. We bargain from a position of strength, not desperation. We possess the perfect location. We are right in the middle of the country, and the Racine county site is situated along major interstate and rail lines. The proposed plant would be close to Mitchell Field and O’Hare Airport. Racine and Kenosha counties can deliver 35 million gallons of spare water capacity between them, and Foxconn’s flat screen production is water intensive. Finally, we offer proximity to Amazon’s warehouse for the sorting and shipping of Foxconn products.
The correct approach for Wisconsin in my view is to remove Walker’s desperation from the equation, and focus in a professional way.
Professional negotiators who have the good of the state in mind, rather than Walker’s, should reopen the dialog with Foxconn. At a minimum, there should be no waivers of regulations that bind other businesses in Wisconsin. There should be firmer guarantees on the number of jobs and the range of wages. The amount demanded by Foxconn should be countered with something more reasonable. The $3 billion demanded is excessive — it is far more than any amount that the state could hope to recover in return.
Bottom line, we should absolutely pursue this in a reasoned and professional way, but we should not simply turn over the keys to our treasury to a foreign company with a slippery record.
This column originally ran in the Journal Sentinel.
Matthew Flynn is a Milwaukee attorney.
More about the Foxconn Facility
- The State of Politics: Foxconn Biggest Deal in State History - Steven Walters - Aug 21st, 2017
- Statewide Online Tool Assists Wisconsin Companies Seeking to Do Business with Foxconn - Gov. Scott Walker - Aug 21st, 2017
- The Senate Must be The Grownups in the Room… Again. - State Sen. Tim Carpenter - Aug 21st, 2017
- Op Ed: The Many Broken Promises of Foxconn - State Rep. David Bowen - Aug 20th, 2017
- Rep. Goyke Statement on Foxconn Special Session Bill - State Rep. Evan Goyke - Aug 18th, 2017
- Wisconsin Budget: Foxconn Could Take Till 2058 To Pay Off - Jon Peacock - Aug 18th, 2017
- Governor Walker Releases Statement on Bipartisan Assembly Passage of Wisconn Valley Special Session Legislation - Gov. Scott Walker - Aug 18th, 2017
- Republican Agenda Puts Corporate Welfare Package for Taiwanese Company Ahead of our Public Schools - State Rep. Dianne Hesselbein - Aug 17th, 2017
- Rep. Sinicki Votes No on Foxconn Package - State Rep. Christine Sinicki - Aug 17th, 2017
- Statement from Rep. Barca on the Assembly Passage of Foxconn Bill - State Rep. Peter Barca - Aug 17th, 2017
- Facts on Foxconn Trump Proponents’ Protestations Deal Would Benefit Wisconsin - One Wisconsin Now - Aug 17th, 2017
- Foxconn Debate Cheat Sheet - State Rep. Gordon Hintz - Aug 17th, 2017
- $3 Billion Foxconn Boondoggle Sells Out Wisconsin’s Future to Foreign Corporation - State Rep. Lisa Subeck - Aug 17th, 2017
- Op Ed: How to Get a Better Deal From Foxconn - John Torinus - Aug 17th, 2017
- Data Wonk: Will Foxconn Deal Fight Poverty? - Bruce Thompson - Aug 16th, 2017
- Governor Walker Moderates Foxconn Roundtable Discussion in Green Bay - Gov. Scott Walker - Aug 16th, 2017
- Op Ed: Where Will Foxconn Find Workers? - State Rep. Gordon Hintz - Aug 16th, 2017
- Vukmir: The time is now for Foxconn - Assistant Majority Leader Leah Vukmir - Aug 15th, 2017
- Foxconn tax break could exceed $1 million per job - State Sen. Jennifer Shilling - Aug 14th, 2017
- Paul Ryan Challenger Opposes $3 Billion Corporate Handout to Foxconn - Cathy Myers - Aug 14th, 2017
- The State of Politics: 10 Tough Questions About Foxconn Deal - Steven Walters - Aug 14th, 2017
- Campaign Cash: Did Foxconn Lobby Illegally? - Wisconsin Democracy Campaign - Aug 12th, 2017
- Statement from Rep. Barca Regarding Republican Amendment to Foxconn Bill - State Rep. Peter Barca - Aug 11th, 2017
- Statement: Amendment to Special Session Assembly Bill 1 - Wisconsin Assembly Speaker Robin Vos - Aug 11th, 2017
- Op Ed: Renegotiate the Foxconn Deal - Matthew Flynn - Aug 11th, 2017
- Murphy’s Law: Walker’s Desperate Deal With Foxconn - Bruce Murphy - Aug 10th, 2017
- Foxconn Deal Flounders in State Legislature - One Wisconsin Now - Aug 10th, 2017
- If ‘Ifs’ and ‘Buts’ Are Candies and Nuts We’ll Have Foxconn Deal Paid Off in 2043 - One Wisconsin Now - Aug 9th, 2017
- Rep. Shankland: Statement on Foxconn Analysis - State Rep. Katrina Shankland - Aug 8th, 2017
- Foxconn Fiscal Analysis Deeply Troubling for Wisconsin Taxpayers - State Rep. David Crowley - Aug 8th, 2017
- Statement from Rep. Barca on New Fiscal Analysis of Proposed Foxconn Deal - State Rep. Peter Barca - Aug 8th, 2017
- Rep. Hintz Statement on Foxconn Cost to Taxpayers - State Rep. Gordon Hintz - Aug 8th, 2017
- Campaign Cash: Bill Has $10 Million Giveaway to Fiserv - Wisconsin Democracy Campaign - Aug 8th, 2017
- Wisconsin Veterans Chamber of Commerce Calls For Foxconn Project to Include Disabled Veteran Owned Businesses - Wisconsin Veterans Chamber of Commerce - Aug 7th, 2017
- Wisconsin Budget: The High Cost of Foxconn - Jon Peacock - Aug 4th, 2017
- What Does the Foxconn CEO Say About His Employees? - One Wisconsin Now - Aug 4th, 2017
- Foxconn Hearing: Big Promises, Little Details, Lacks Transportation Plan - State Rep. David Crowley - Aug 3rd, 2017
- One Wisconsin Now Testimony on Foxconn Subsidy Legislation - One Wisconsin Now - Aug 3rd, 2017
- No Guarantees to Prevent Wisconsin Tax Dollars From Subsidizing Illinois Jobs in Foxconn Deal - One Wisconsin Now - Aug 2nd, 2017
- Unnecessary to Sacrifice Natural Resources for Foxconn - Wisconsin League of Conservation Voters - Jul 31st, 2017
- Statement from Rep. Barca on Foxconn Developments - State Rep. Peter Barca - Jul 28th, 2017
- The Contrarian: Walker’s Reelection Now A Certainty - George Mitchell - Jul 28th, 2017
- Eyes on Milwaukee: Foxconn Loves Wisconsin, Walker - Jeramey Jannene - Jul 27th, 2017
- Governor Walker, Foxconn Founder and CEO Terry Gou Sign Memorandum of Understanding in Milwaukee - Gov. Scott Walker - Jul 27th, 2017
- REALTORS® Welcome Foxconn - Greater Milwaukee Association of REALTORS® - Jul 27th, 2017
- MATC Statement on Foxconn - Milwaukee Area Technical College - Jul 26th, 2017
- Statement from Rep. Barca on Foxconn Economic Development Announcement - State Rep. Peter Barca - Jul 26th, 2017
- Milwaukee County Executive Chris Abele Statement on Foxconn Announcement - County Executive Chris Abele - Jul 26th, 2017
- Global High-Tech Manufacturer Foxconn Announces $10 Billion Investment, Will Create 13,000 Jobs in New Wisconsin Campus - Gov. Scott Walker - Jul 26th, 2017
- Foxconn Frenzy: Proceed with Caution - State Sen. Chris Larson - Jul 26th, 2017
- Shilling cautious on Foxconn announcement - State Sen. Jennifer Shilling - Jul 26th, 2017
- Op Ed: Loss of Talgo Train Hurts Foxconn Deal - James Rowen - Jul 20th, 2017
- Mayor Barrett Supports Siting Foxconn Facility in Southeastern Wisconsin - Mayor Tom Barrett - Jul 17th, 2017
- On the Air: How Likely Is It Foxconn Will Create 10,000 Jobs? - Urban Milwaukee - Jul 13th, 2017
- Murphy’s Law: Walker Building Yesterday’s Economy - Bruce Murphy - Jul 13th, 2017
- Eyes on Milwaukee: Foxconn Lands in Milwaukee - Jeramey Jannene - Jul 10th, 2017