Foxconn situation reiterates reality of ‘too-good-to-be-true’

By Gene Kemmeter
Work is in progress on the site of the new $10 billion Foxconn project in southeastern Wisconsin in Racine County. The project is expected to generate 13,000 new jobs in a plant to build LCD screens for cellphones and televisions, and will result in Foxconn receiving $3 billion to $4 billion in state taxpayer subsidies, depending on the number of new jobs created, which amounted to 82 by the end of 2018.
State officials were jolted last week when Foxconn announced it would shift emphasis from the manufacturing workforce originally promised to hiring mostly engineers and researchers because the cost of labor was so high. By the end of the week, President Donald Trump, who had championed the project, announced the plant would be a manufacturing facility as originally stated.
Construction on the approximately four-square-mile site for the facility was started last year. Mount Pleasant and Racine County borrowed $355 million and used the threat of purchasing the land under eminent domain to get most landowners to sell at the fixed price. Local governments also acquired property for roads to provide easier and safer access to the site along Interstate 94.
Foxconn has promised big projects elsewhere before, but never really got beyond the initial construction phase. Foxconn promised a manufacturing hub with 100,000 new jobs in Sao Paulo, Brazil in 2012. Today, that Foxconn site employs less than 3,000 people, with vacant properties on a campus site cleared for the promised Foxconn development.
Foxconn announced in 2013 that the company would invest $30 million and build a plant initially for 500 workers in central Pennsylvania. Pennsylvania officials boasted about it, but the factory has never been constructed yet. Foxconn also promised to build factories in Vietnam, Indonesia and India, but none of those have come to fruition either.
Every community needs jobs, good jobs that pay a living wage. Low-paying employment creates problems, leaving communities in the lurch. Based on previous experiences, officials probably need to concentrate on small- to medium-sized companies that pay decent wages and have a record of stability to bring about job growth.
Fortunately, Portage County has been blessed with that situation in recent years. Major developments have included expansions by stable local institutions instead of major firms promising the sky.
Mindless growth will not lead to lower taxes despite the promises. That never seems to work. Too often, the promised Shangri-la is littered with large empty buildings and suffering. The fairy tale fails to thrive.