Foxconn Announces US Manufacturing Plant in Wisconsin

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monkeymagick

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In what will be a major boon to the state's economy, Foxconn announced plans to build a LCD-panel plant in Wisconsin (warning auto-play video). The Taiwanese electronics giant plans to invest $10 billion over four years into the project, making it the most expensive development in the state's history. Up to 13,000 people would be considered for employment with the state awarding $3 billion in incentives over 20 years if Foxconn can fulfill its promises. The company is currently looking for a 20-million square foot location in the southeast of Wisconsin --suicide nets not included.

Foxconn, formally known as Hon Hai Precision Industry Co Ltd (2317.TW), said in a statement that the investment "signifies the start of a series of investments by Foxconn in American manufacturing in the coming years."
 
chenw said:
Interesting to see how a boss from a "live to work" background will manage a "work to live" workforce.
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Suicide prevention hotlines and anti-sucide nets.

And who "lives to work" for crap tier min. wage assembly work anyways? If you're getting paid mid 6 figures I could sorta understand it since then you're getting paid enough you can fun stuff like play bumper cars with Mercedes or something.

But on min. wage?

"I live to work....so that once a month I can go to the movies with my friends with my pockets stuff full of Sour Patch Kids so I have something to eat!!! Yeeaaaah 'Murican dream baby!!!"

The parodies write themselves I guess.
 
So 3 billion divided by 13,000 equals about $230,000 in subsidies per job "created," or over $11,500 per job per year. As a small business co-owner I wouldn't mind an 11.5K bonus from the state for myself, my partner, and each employee hired every year for the next 20 years. Of course, other people are going to have to pick up the slack from this sort of gigantic tax dollar giveaway to a large multi-national and with taxes on the rich in Wisconsin seemingly being cut every year on who will that crushing debt responsibility fall... ?
 
chenw said:
I don't mean it literally, but the culture background between Terry Guo and US workforce is undoubtedly world's apart, so I am wondering how the great Terry will manage it.
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If you didn't mean it litterally you should've put it another way entirely. "Culture" is also a whole other can of worms from what you were referring to when talking about "live to work vs work to live" too.

Culturally and economically companies like Foxconn have been able to exploit hordes of Chinese who lived in absolutely terrible poverty and even they're getting to the point where Foxconn's treatment and pay for labor is getting intolerable. So what does that say to you about Guo's cultural background?

Personally I don't think you can say anything at all really based on that information about his cultural background, really you'd need a bunch more personal information about his views on things in general, but it does say a lot to me about his leadership qualities and the way he'll tend to run a business. None of it being good for anyone except for himself and a few others at the top.

But that is typical these days isn't it?
 
Or perhaps what people here are missing is that the Chinese workers are maturing and no longer wish to live to work. The reason people put so much into their work is not what most people falsely believe you just have to think about it and put yourself in the situation. Ask yourself what would it take to get you to work 16 hour days for many years? Then break it down. The answer is hope, or a big payout. Most Chinese people just like the Japanese before them saw hope and a big payout so they were willing to work like dogs for the corporation in the big city. As the decades went on and most realize their was no great payout, there was no early retirement and moving back to the country they begin giving up and being less willing to work so hard. The Chinese are starting to see the rumblings of this in their workforce. So they are starting to hedge bets.
 
Teenyman45 said:
So 3 billion divided by 13,000 equals about $230,000 in subsidies per job "created," or over $11,500 per job per year. As a small business co-owner I wouldn't mind an 11.5K bonus from the state for myself, my partner, and each employee hired every year for the next 20 years. Of course, other people are going to have to pick up the slack from this sort of gigantic tax dollar giveaway to a large multi-national and with taxes on the rich in Wisconsin seemingly being cut every year on who will that crushing debt responsibility fall... ?
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They're just going to hit up the tax payers of course. 13,000 people with jobs paying state income tax. Then whatever they spend, they get sales tax. They buy houses, property tax. They buy vehicles, registration fees.

Then you have other jobs that could be created due to them moving in. Construction jobs, landscaping jobs, transportation jobs, utility jobs, etc to support the construction, maintenance, and whatever else required to keep them operating. Also jobs created to support the influx of workers. Be it local businesses needing more employees or other businesses opening up operations within the area.

If the business stays open for a long time, they'll make their money back. If they cut and run after 20, the state could be out a lot of money. Unless someone else decides to move into the factory after Foxconn leaves. Only time will tell if it was a wise choice for the state or not.
 
krotch said:
13,000 people with jobs paying state income tax.
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Supposedly the 13,000 jobs number is kind've inflated. Different articles are claiming the actual jobs created at the factory is around 3,000 and the other 10,000 is a estimate of how many would be involved in buidling the factory. Not sure which is true.

krotch said:
Only time will tell if it was a wise choice for the state or not.
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Its almost always a bad choice. Especially since Foxconn has been known to break its deals with various countries or cities when setting up factories.

“I just shake my head every time it happens, it just gives me a sick feeling in the pit of my stomach,” said Sean O’Byrne, the vice president of the Downtown Council of Kansas City. “It sounds like I’m talking myself out of a job, but there ought to be a law against what I’m doing.”
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mesyn191 said:
Supposedly the 13,000 jobs number is kind've inflated. Different articles are claiming the actual jobs created at the factory is around 3,000 and the other 10,000 is a estimate of how many would be involved in buidling the factory. Not sure which is true.
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I couldn't imagine the factory itself has 13,000 jobs, but I don't know. I have no idea how many thousands they'd have to assemble things. I do think that's the overinflated number for jobs that will support the building of the plant and then support the employees when it's operational. Course probably over half will be temp jobs that disappear when construction is all done.


Its almost always a bad choice. Especially since Foxconn has been known to break its deals with various countries or cities when setting up factories.
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I think that's why they're trying to tag a 20 year deal on it, but ya. I do agree with you, it's usually a bad choice.

Luckily, in my home town. It's worked out with the Chobani factory in Twin Falls, Idaho. $54 mil in incentives for 400 jobs. $450 million dollar factory. Opened up in 2013 with 300 jobs. They recently did a $150 mil factory expansion with no tax incentives. They employ over 1000 people now.

I wouldn't have bothered with Foxconn though. Too much of a gamble.
 
PR Piece both for the state and the company. Hugely subsidized per job created.
 
Trump gets kicked out...factory closes same day.

Any idea when building it starts? I guess in no hurry. No rush to find the right location...
 
--suicide nets not included.
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Moment I read the text of the title of the article... that was my first thought... "I wonder if they will have those like they do in China"
 
Teenyman45 said:
So 3 billion divided by 13,000 equals about $230,000 in subsidies per job "created," or over $11,500 per job per year. As a small business co-owner I wouldn't mind an 11.5K bonus from the state for myself, my partner, and each employee hired every year for the next 20 years. Of course, other people are going to have to pick up the slack from this sort of gigantic tax dollar giveaway to a large multi-national and with taxes on the rich in Wisconsin seemingly being cut every year on who will that crushing debt responsibility fall... ?
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I believe this $3 billion comes as the form of tax breaks, not subsidies. So this isn't costing WI that much money, that's how much tax revenue would be collected from Foxconn if they didn't give the breaks. Want to know how much tax revenue WI would get if they didnt' ink this deal??????

$0.00

So what WI is giving up is the full amount of tax revenue, for a smaller revenue (positive revenue still) and the addition of thousands of jobs.
 
jardows said:
So this isn't costing WI that much money,
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Tax breaks are future revenue so its perfectly legit to think of it as costing the state money.

jardows said:
Want to know how much tax revenue WI would get if they didnt' ink this deal?????? $0.00
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WI has other sources of tax revenue so their revenue wouldn't be $0. The state itself can always tax its rich people or businesses if it needs more revenue. That they (and many other states (ie. Kansas)) refuse to is a big part of their budgetary issues.

Also if Foxconn reneges on the deal before WI gets their $3 billion in tax revenue back (which will take around 40yr or so assuming 3K jobs created and a 30% nominal tax rate on employees with a $50K/yr salary) then WI will be in the red on the deal.

Most of the time cities or countries that do incentives to try and get businesses to move to their jurisdiction end up losing out big on the deal. Read this article.

jardows said:
So what WI is giving up is the full amount of tax revenue, for a smaller revenue (positive revenue still) and the addition of thousands of jobs.
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By giving up revenue the state is risking its ability to provide services (ie. schools, roads, fire fighters, etc.) to its existing population. That is almost never a good thing. The revenue will not be smaller, it will be effectively negative for a very long time until $3 billion is effectively paid from woker's income tax.
 
That's not how it works, mesyn191; tax breaks to attract new business are not government expenditures. No matter how long the Foxconn plant is operational, the Wisconsin state government will be better off; if they offered no tax breaks the Foxconn plant would be opened somewhere else, and the state government would collect ZERO additional dollars, compared to what they are making now. With the factory being located there, Foxconn will pay some taxes, and all the workers at the plant will presumably pay more taxes than they would otherwise, as presumably they will make more at Foxconn then they would at other jobs. It is a net gain for the state from the beginning.

For an analogy - suppose you rented out apartments, for $500 a month. But you want to attract more tenants to fill a couple of empty units, so you offer a "rent break" of $15,000 for five years, which of course means they are only paying $250 a month for five years. Are you losing money by offering this rent break, or are you making more money by filling empty units? This is pretty much the same situation.
 
dreadcthulhu said:
That's not how it works, mesyn191; tax breaks to attract new business are not government expenditures.
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They're effectively spending future tax revenue by allowing the company to keep it, IOW giving away the money.

It is, legally speaking, a expenditure and even effects the state's ability to sell its bonds (debt) on the municipal debt market and effects a state's debt levels. There is no getting around this fact.

dreadcthulhu said:
No matter how long the Foxconn plant is operational, the Wisconsin state government will be better off;
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Except the article I posted shows that usually isn't true at all. Real world information trumps your rhetoric and "logic" every time.

dreadcthulhu said:
if they offered no tax breaks the Foxconn plant would be opened somewhere else.....
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Except the state isn't making anything right now and right now the state is the hole for $3 billion on the deal. It will take decades for the deal to be revenue positive. I already did a math example in thread, its not at all hard to understand or figure out if you want a ball park date.

dreadcthulhu said:
With the factory being located there, Foxconn will pay some taxes...
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This doesn't matter until the $3 billion is paid up. Until then the state will be in the red on the deal, which will take around 40yr or so, there really isn't a net gain going on until then either. In order for there to be a net gain there has to be more economic activity generated then there is debt created or at least greater than the debt service payment until its all paid off. And again Foxconn is known for breaking its deals. Pretty much ALL the companies involved in these sorts of deals break them. That is why they usually don't work out. Read the article I linked.

dreadcthulhu said:
his is pretty much the same situation.
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Terrible analogy, you don't understand the situation at all if you think that is what is going on at all.

The land wasn't costing the state any money to begin with (unlike a empty rental unit) and by essentially giving away the tax revenue for several decades the state will have to deal with the infrastructure upkeep costs for the area (which will be higher than normal since the roads will end up getting beaten up by the tractor trailer traffic) at a minimum. If more people move there then there will be increased schooling, policing, etc. costs too but they'll only have the budget for a smaller population to pay for it all with. Which either means increasing other taxes on the workers or cutting state services in one way or another.
 
mesyn191 said:
This doesn't matter until the $3 billion is paid up. Until then the state will be in the red on the deal, which will take around 40yr or so, there really isn't a net gain going on until then either. In order for there to be a net gain there has to be more economic activity generated then there is debt created or at least greater than the debt service payment until its all paid off. And again Foxconn is known for breaking its deals. Pretty much ALL the companies involved in these sorts of deals break them. That is why they usually don't work out. Read the article I linked.
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And that's why Foxconn has to hit their hiring targets before they're eligible for the incentives.
 
Parja said:
And that's why Foxconn has to hit their hiring targets before they're eligible for the incentives.
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The hiring targets don't matter either much, that is theatrics to fool the suckers who don't understand the math or their business practices. They could for instance just hire the necessary people as contractors (charge them for training, work equipment, no benefits, etc.) and use robots to do most of the production and still meet those metrics and the local economy and state revenue would still suffer.

They'd have to keep 3K people @ $50K wages for over 40yr to pay it all off (assuming a 30% nominal tax rate on those wages), if they were actually interested in creating some OK blue collar jobs and paying off the debt given what could be expect from factory work, THAT is what actually matters. There are, as far as I can tell, no real major penalties for Foxconn if they fail to do this, that is they don't have to pay the state back any of the remaining $3 billion if they don't hold up their end of the bargain.

Yeah they'll lose any money they have invested in the plant...but they can just resell the plant or at least the factory/property to recoup any losses there. And realistically with this tax deal it'd be almost shocking if they don't at least break even. Its at least highly favorable to Foxconn, if not incredibly so, which is why they went for it. They stand to make money almost no matter what for little risk.
 
mesyn191 said:
They'd have to keep 3K people @ $50K wages for over 40yr to pay it all off (assuming a 30% nominal tax rate on those wages), if they were actually interested in creating some OK blue collar jobs and paying off the debt given what could be expect from factory work, THAT is what actually matters. There are, as far as I can tell, no real major penalties for Foxconn if they fail to do this, that is they don't have to pay the state back any of the remaining $3 billion if they don't hold up their end of the bargain.
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Umm, no. You do not take into consideration sales tax revenue, property tax revenue (all those new workers coming in for the jobs will need a place to live), all the extra jobs created from the need to service those extra jobs, etc. Wisconsin will immediately see a net gain in revenues, a gain they would not have if they did not give Foxconn this tax break.

The article you posted is shy on facts, makes the same assumptions you do without looking at all data, cherry picks a few people who are onboard with the premise to interview, and only really highlights GM, where some its plants closed in bankruptcy proceedings. Yes, that is a risk taken, but should not be held out as the norm.

If you are one of the people to get hired to work at that Foxconn plant, I doubt you would be so critical of the deal.
 
I wonder if they'll have signs that read "Suicide free for ___ days."
 
jardows said:
Umm, no. You do not take into consideration sales tax revenue, property tax revenue (all those new workers coming in for the jobs will need a place to live), all the extra jobs created from the need to service those extra jobs, etc. Wisconsin will immediately see a net gain in revenues, a gain they would not have if they did not give Foxconn this tax break.

The article you posted is shy on facts, makes the same assumptions you do without looking at all data, cherry picks a few people who are onboard with the premise to interview, and only really highlights GM, where some its plants closed in bankruptcy proceedings. Yes, that is a risk taken, but should not be held out as the norm.

If you are one of the people to get hired to work at that Foxconn plant, I doubt you would be so critical of the deal.
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Then why not give EVERYONE in the State $11,500 per year in cash, tax refunds, and tax abatements? Think how that'll stimulate the State's economy. This is corporate welfare on a grand scale to the detriment of the majority of Wisconsonians for the benefit of Foxcon and secondarily for some of the people who will be working at the factory.
 
jardows said:
You do not take into consideration sales tax revenue, property tax revenue (all those new workers coming in for the jobs will need a place to live)
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Its simplistic but quite accurate and reasonable for a ball park since income tax is a huge part of a state's revenue stream. Many of the other taxes you're talking about are also so variable they're hard to model or even guess at for ball park purposes. Either which way the point is made the pay off time is quite drastic (even if the other taxes amounted to another 100% more tax revenue over the assumed income tax you're looking at a 20yr pay off time) and isn't something you can handwave away as a minor issue.

jardows said:
The article you posted is shy on facts
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You didn't even read the article if you think that. It has tons of facts and directly quotes many of the people directly responsible on a company and state or city level about what happens with many of these deals.

You're going to have to find a solid citation if you want dispute its information, handwaving on your part isn't enough.

jardows said:
If you are one of the people to get hired to work at that Foxconn plant, I doubt you would be so critical of the deal.
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Nope. I've been quite critical of many places I've worked at. Most of them have been fairly crappy. Only a few of them turned out to be OK and that and 2 of those instances was only because I lucked out and had a good managers for that particular dept. who went the extra mile to try and buck what the VIP's were saying because he didn't care about getting a raise or advancement since they'd already been in the business for so long they knew the score.
 
Could be good for Foxconn especially, subsidies and such nonwithstanding. They'll most likely automate most of the work and then save on shipping time/expense when supplying Apple with parts.

Maybe not many jobs in the end, but one would hope that it means cheaper iPhones.
 
mesyn191 said:
Nope. I've been quite critical of many places I've worked at. Most of them have been fairly crappy. Only a few of them turned out to be OK and that and 2 of those instances was only because I lucked out and had a good managers for that particular dept. who went the extra mile to try and buck what the VIP's were saying because he didn't care about getting a raise or advancement since they'd already been in the business for so long they knew the score.
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I am sorry that you have had such a poor employment experience. I mostly have had good experience working for various companies, and have personally seen the overall benefit of a corporation providing good employment for an area. I have mostly lived in relatively low-income areas (low cost of living too), and have seen the local governments refuse to give any tax breaks to large corporations coming in promising a lot of good paying jobs. Those corporations went to other municipalities that are booming, and have seen great overall prosperity.
 
How much will an iPhone cost if pieces are made in the US? Like 4 grand for the entry level one? I'm not sure what this is trying to accomplish unless the company assumes it will be a year over year loss to report....
 
jardows said:
I am sorry that you have had such a poor employment experience.
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Pretty much everyone I've ever known, and everyone they've ever known, has had a bad employment experience. It is normal.

The whole "disposable cogs in a machine/cubeland" thing has been around since at least as long as I've been in the work force and probably longer, since at least the late 70's. Good jobs that treated employees well and made sure they were taken care of are a thing of the past. Given the management styles that I see promoted today as well as the corporate "logic" that is being spewed by these guys everywhere I don't see that situation improving any time soon unfortunately.
 
ob1 said:
How much will an iPhone cost if pieces are made in the US?
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If you just want assembly labor done in the US it'd maybe add $15-20 to the phone manufacture cost but if you want to make every little part in the US it'd cost a whole lot. Link. I'd expect machines to be doing that sort of assembly labor soon if they aren't already so I think it isn't worth considering.

2-Spindle Assembly Unit based on a DCAM (DEPRAG COMPACT ASSEMBLY MODULE) for the simultaneous assembly of four cell phones.

Total processing time for 4 phones with 6-screws each: 14 seconds!
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Isnt this the same factory that they promised to build in Marcy, NY? Saw some of the details of the deal at one point, and thought to myself why would anyone fall for this scam? Just for a few jobs for a short while and a giant vacant factory? We have enough of those already.
 
hahaha...luv the whining...I copy these and distribute them to non-whiners as comic relief...your right though , Walker should have told Foxconn to fuck off , who needs a job these days anyway , practically anyone can get food stamps , subsidized living expenses , free healthcare off of the backs of others , free telephone , tax credits for not making anything of themselves...all the great leftist "entitlements"...

haha...tell them to take those jobs back the China Walker!...I am sure the other couple of states that Foxconn is in can use the job security...Democrats heap taxes on small business and crush the little business guy and the "small business co-owner" that is whining above has no clue who is reaming him in the backside...not a "personal attack" , just an observation
 
Killahurtz said:
hahaha...luv the whining...I copy these and distribute them to non-whiners as comic relief...your right though , Walker should have told Foxconn to fuck off , who needs a job these days anyway , practically anyone can get food stamps , subsidized living expenses , free healthcare off of the backs of others , free telephone , tax credits for not making anything of themselves...all the great leftist "entitlements"...

haha...tell them to take those jobs back the China Walker!...I am sure the other couple of states that Foxconn is in can use the job security...Democrats heap taxes on small business and crush the little business guy and the "small business co-owner" that is whining above has no clue who is reaming him in the backside...not a "personal attack" , just an observation
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I haven't completely read the WI deal, but the NY deal was idiotic. They will "create" jobs. Not keep them. The state will be stuck paying them tons of money long after those jobs are gone.
 
I would guess that some of these "deals" could have stupid stuff in them , but the cry of evil "tax breaks" is moot and irrelevant to the conversations as no corporations pay "taxes" , those are projected as expenses and rolled into the cost of their product or service. The sooner Americans get educated on business and how it is conducted the better off they will be at having the debate...I have my doubts as to that ever happening .
 
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