Crony Capitalist Deal in Wisconsin Stumbles, but Officials Still Eager to Hand Out Taxpayer Subsidies
The massive crony capitalist deal the state of Wisconsin struck with computer chip maker Foxconn is falling apart because the company isn’t upholding its’ part of the bargain. As such, it won’t be getting its first tranche of taxpayer subsidies:
In a Monday letter, the state informed Foxconn that the company wouldn’t get the first installment of the $3 billion because Foxconn wasn’t holding up its end of the deal. Under Foxconn’s 2017 agreement with the state, Foxconn would be eligible for the first round of subsidies if it hired at least 520 full-time employees to work on the LCD panel factory by the end of 2019. Foxconn claimed that it had cleared this bar by hiring 550 employees in the state. But Wisconsin found that Foxconn had only 281 employees who counted toward the requirement.
Foxconn was supposed to spend $3.3 billion on the project by the end of 2019. Instead, Foxconn had only spent around $300 million by the end of the year.
Foxconn was supposed to build an LCD panel factory based on the industry’s new Generation 10.5 standard. This standard uses enormous sheets of “mother glass”—roughly 10 feet (3 meters) square—to provide LCD panels for large televisions. Each glass sheet is typically cut into several displays. The factory was expected to cost $10 billion to build and eventually employ 13,000 workers in Wisconsin. The state now says that Foxconn won’t come anywhere close to meeting those targets.
Even though the promised jobs aren’t coming, and there’s no indication they will come any time soon, Wisconsin officials say they are willing to make a new deal, complete with billions of taxpayer subsidies.
Image Credit: By Jericho [CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons