Bruce Murphy
Murphy’s Law

Foxconn Plays Politics for Walker?

Company's iffy "innovation centers" in Eau Claire, Green Bay could help reelect governor.

By - Jul 26th, 2018 10:26 am
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Gov. Scott Walker and Foxconn plan.

Gov. Scott Walker and Foxconn plan.

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.

Walker badly needed some political cover on this issue and Foxconn quickly came to the rescue with a well-timed announcement. In early February the company announced it would be buying a seven-story building in downtown Milwaukee that would become its North American headquarters. The building would also be home to a new “Wisconn Valley Innovation Center. That might help persuade all those naysayers in southeastern Wisconsin who didn’t believe the deal would have any benefits for that region. 

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. 

“Having a presence in different parts of the state helps us recruit potential employees, strengthens our ability to collaborate with entrepreneurs and start-up companies and gives us more opportunities to find value-added suppliers who can contribute to the project’s success,” the company wrote. “Not all the knowledge, expertise, talent and suppliers that will be associated with our significant project, and that are found in Wisconsin, reside in the south-eastern part of the state.”

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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More about the Foxconn Facility

17 thoughts on “Murphy’s Law: Foxconn Plays Politics for Walker?”

  1. Terry says:

    These “innovation centers” are complete election year gimmicks to make it appear like FoxCON is having a “full state impact.” It’s not and everyone in Eau Claire at least knows it. We aren’t as stupid as these corrupt Corporate Sellout republicans think. When they announced this gimmick in Eau Claire they had to ban the public, you know, the voters, We the People. Why? Because everyone was protesting because we hate this boondoggle and don’t want or need Walker’s schemes anymore nor do we want or need some crappy gimmick Corporate Welfare Chinese “jobs” we had to pay 4.5 Billion for! Whether Career Politician Scott Walker wins yet again or not, I guarantee these dumb ass “innovation centers” and any phony jobs will be long gone in a couple of years. Once the election is over they won’t be needed. With 4.5 billion of our money FoxCON can easily afford to buy a couple old buildings and “staff them”with a couple front desk workers, but the subterfuge won’t last because we know this is nothing more than yet another election year gimmick by greasy corrupted Career Politician Scott Walker.

    Dump Walker 2018

  2. michael says:

    What get’s me about the Foxconn deal, is why put it in down in corn field by the Illinois border? If they put it up in say, Brookfield, then folks from Milwaukee, Madison, Fond Du Lac, etc can tap into those jobs. It’s just stupid. Maybe a few people can commute 30 miles from Milwaukee/40+ from Milwaukee suburbs, but no one is driving 100 miles from Madison & Fond Du Lac to these jobs.

    This is a give away to the residents of the north shore of Illinois on the back of WI tax payers.

  3. Bea says:

    This is such blatantly bogus “recruiting” that it is to laugh, and then to cry, at the depths Walker is willing to take corporate cronyism to.

  4. Charlie says:

    The 13,000 jobs estimate includes a significant number of jobs from Corning, which aren’t coming anymore because Corning demanded the state also pay for most of the cost of its potential SE Wisconsin factory. Foxconn was forced to scale down the type of plant it was building without Corning building a plant in SE Wisconsin because the glass panels are too large to ship from Corning’s plant in NY to WI. Instead, Corning is going to source smaller glass from their plant in NY and the Foxconn Racine plant will produce a less unique product. $4.1 billion dollars for less than 13,000 jobs now.

  5. Dumbledore says:

    Although support for Walker could be one of Foxconn’s motives, I think it is also an insidious way for Foxconn to create an enterprise that is “too big to fail” (a phrase I have used in previous posts) even if there are new leaders elected.

    Wisconsin’s $4.5 billion investment is just too big for the overall size and scale of the state and its economic development and infrastructure programs and creates a perpetual dependency. Wisconsin will never be done paying for Foxconn because the company will continue to ask for public investment for training, equipment, infrastructure and more and Wisconsin will pony up because it would be an embarrassment to “lose” Foxconn. This will become a money pit the same as an overpriced speedboat is for a middle class family trying to keep up with the Joneses.

  6. Adam says:

    @Dumbledor-

    While I think this is mostly public relations/ politics related moves, I agree about the too big to fail plauguing us for decades to come. I don’t know it it would become an embarrasment losing them as much as a we need to keep them in WI until the 2040’s to even repay these subsidies.
    I can only imagine Foxconn will be blackmailing the state plenty down the road, pulling the ‘we need more welfare or else we’ll have to move elsewhere’ card. And we will be obliged to pony up if we want to ever recoup the initial investment. A slippery slope Scooter has created for us.

  7. tom says:

    Just another example of how the slimiest politician in WI in decades operates. Walker only cares about Scott Walker’s political future. He does not care about WI citizens. He is slime to the core.

  8. Denny says:

    Why is anyone surprised. Thanks Bruce for putting this in writing for all to see. The fox news cult will not understand, but others should see it for what it is. Walker using public money for his in gain.

  9. Another part of the gimmick to use Foxconn to spread Walker’s wings in reelection bid is publicly emphaized teams that work with the understandable but sad cooperation of institutes of higher learning who hope to keep their engineering students looking with the state and have opened their portals wide to these teams and eve promises of n signing bonuses from Foxconn, though economic skeptics doubt that many of their engineering highers will indeed be from the state.

  10. Paul says:

    Nailed it Mr. Murphy
    – Foxconn can afford to buy one of these buildings in every medium sized town in WI – then turn around and do nothing with it. Foxconn was problably approached by Walker to put these facades in strategic areas. Check the emails. It is indeed another election year gimmic. Which brings me to another thought- is the Foxconn project nothing but a scam to prevent Trump from imposing tariffs on Taiwan.

  11. fightingbobfan says:

    Given Walker’s dismal track record with WEDC, what makes anyone think this will pay off?

    It’s every FUBAR project coming out of that agency looming large and dangerous.

  12. Troll says:

    Does Potawatomi play politics for Tom Barrett. Essentially, giving large sum sof money for a form of transportation that will bring in less money than the Bird scooters.

  13. Thomas says:

    I suspect that Troll is intentionally off point again. Ignore post # 12 in the interest of the issue at hand. Look at that post twice and you could be smitten by contagious stupidity.

  14. Jake formerly of the LP says:

    As fightingbob notes, the fact that WEDC is in charge of “oversight” of the Fox-con should tell you this is a scam.

    All Walker knows is how to grift and read polls, and the obvious desperation is showing. “Hey Foxconn, outstate voters hate that their tax dollars are getting sent to Racine County. Can you do a few photo ops with me in other parts of the state and claim you’re hiring a few people there?”

    It’s also a nice way for Walker donors to dump underperforming real estate like the NML Building, and get an inflated (tax-subsidized) price for it. Win-win!

    Sorry Scotty, people are seeing through it. No wonder you’re down double digits.

  15. James says:

    Curious that an Innovation Center has not been announced for Madison, which is home to a world-class university. Coming next year, innovation centers announced for Northwestern and the University of Chicago.

  16. Tosa Comprade says:

    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.

    And how does the language differ from the oh-so promising “declarations” of the 3rd Ward Start Ups?

    It’s sometimes enlightening and justified when you take Walker to task. Why not use the same standard for Barrett? It seems to me URBAN MILWAUKEE might want to be taking a closer look at City Hall rather than Eau Claire

  17. Michael says:

    Foxconn has not purchased buildings in either Green Bay or Eau Claire. Nor have they made an offer to purchase. All they have done is announced they are buying building. As Murphy writes they have repeatedly backed out on deals in the past. The Foxconn rational for building two three innovation centers makes no economic sense. In addition to the arguments made in the column, corporate R and D normally concentrates personnel together, in close proximity to each other to facilitate cooperation and collaboration.. Economists call it the agglomeration effect. It is why there is a Silicon Valley or why the automobile industry concentrated in Detroit.

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