Foxconn Plays Politics for Walker?
Company's iffy "innovation centers" in Eau Claire, Green Bay could help reelect governor.
A year ago, when Gov. Scott Walker signed the initial memorandum of understanding with Foxconn, Republicans were convinced the deal — which at that time was a $3 billion subsidy for 13,000 jobs — would assure his reelection.
But then something unexpected happened. In late October a Marquette University Law School poll of southeastern Wisconsin voters found only 38 percent thought the deal would be a net benefit for the state. Two days later a survey by the Democratic firm, Public Policy Polling, found 34 percent of registered voters statewide supported the deal and 41 percent opposed it, with 26 percent undecided.
Suddenly the deal Walker couldn’t stop talking about was one he didn’t want to mention, even omitting it from his reelection announcement speech. As MU Law School pollster Charles Franklin told the Wisconsin State Journal, “To not include a single sentence mentioning Foxconn suggests that there is a perceived downside to Foxconn now that was not apparent in the initial announcement and messaging.”
But the situation only got worse from there. By December the price tag for Foxconn’s subsidy had risen to $4.1 billion, meaning it will cost $1,774 per household in Wisconsin. That included $134 million for roads to the Foxconn plant, money that was being siphoned from the transportation fund in a state that had the second worst roads in the nation.
But the news from the polls continued to be negative. The MU poll in March 2018 found that while 57 percent of registered voters statewide believed the Foxconn plant would benefit the greater Milwaukee area, only 25 percent felt the businesses where they live would benefit from the project. Fully 66 percent said their local businesses wouldn’t benefit.
Clearly Walker still needed help with this issue and Foxconn was soon riding to the rescue. In June Foxconn announced it would be buying a six-story building in Green Bay to create another “innovation center” which will employ more than 200 engineers. When this would happen wasn’t specified (“later this year”, the company said), but Gov. Walker was on hand to declare that this new center would extend Foxconn’s footprint to “northeastern Wisconsin.”
Foxconn representatives told the press the company wants to attract top talent from UW-Green Bay, Northeast Wisconsin Technical College, St. Norbert College, and other schools in the area. Why these graduates couldn’t simply take a job at the Racine plant was unclear.
But the political benefit was. As the Biz Times observed: “Operations in Green Bay also give the company a chance to improve the popularity of a project that polling has shown the public is skeptical of.”
Less than three weeks later, on July 16, Foxconn was back with yet another announcement: it would be opening another satellite in another part of the state. Yes, it would be another “innovation center”, this time in Eau Claire, that would hire 150 people, and begin operations in early 2019. This, Gov. Walker promised, “will keep graduates of UW-Eau Claire, UW-Stout and Chippewa Valley Technical College in the area instead of leaving for other states,” the Eau Claire Leader Telegram reported. So the graduates would rather leave the state than work at the Racine plant?
The Green Bay operation was also being done to “inspire innovative ideas and catalyze cutting-edge solutions from companies and entrepreneurs” in the area, Foxconn CEO and founder Terry Gou declared. Whereas the Eau Claire operation was being done to “inspire innovative ideas, attract talent and catalyze cutting-edge solutions” in the area, as Alan Yeung, Foxconn’s director of U.S. strategic initiatives declared. Yes, it’s a word-for-word repeat. Maybe the company needs to attract and catalyze more PR writers.
All of which left me with some questions for the company. What is the economic advantage for Foxconn of having three different innovation centers spread around the state? And what is the company paying for these buildings in Green Bay and Eau Claire and when will they be closing on the purchase? Will it be after the November election when Walker hopes to be reelected?
Foxconn responded with a long email, declining to disclose the purchase price on the buildings, their owners or whether the purchase will occur before or after the November election. Most of the email offered a description of why so many mini-Foxconns are spreading across the state, and I must note their PR writing is getting better.
No doubt there are potential employees and suppliers to be found in other parts of the state, but are we living in the age of plank roads and mule teams? Or are these potential partners too shy to use computers, email and cell phones or simply drive along those highway connections to Foxconn’s massive Racine campus that we taxpayers are financing. Why must the company instead create satellite connections all over Wisconsin in order to coax these elusive workers and companies from getting aboard the gravy train of the most publicly subsidized foreign company in American history?
Given the massive subsidy Foxconn is getting, it can probably afford to throw a little money at Eau Claire and Green Bay, even if those satellite centers are completely unnecessary. And Foxconn has every incentive to ensure that Walker wins reelection, given that all eight Democratic candidates for governor have condemned the deal and one, Matt Flynn, has promised to fight the deal in court. Foxconn, moreover, has a long history of backing out of projects it announces. If it could back out of deals in India, Vietnam, Brazil and Pennsylvania, why can’t it walk away from Eau Claire and Green Bay? It can merely explain, a couple months after the November election, that economic conditions have changed, or that it is having no problem getting the suppliers and employees it needs for its Racine plant, and so it won’t need those political outposts — sorry, innovation centers — that helped reelect their generous benefactor.
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