Economic development officials in Wisconsin say they are more than ready to move on to other matters now that they have renegotiated a massive subsidy deal with Taiwanese electronics manufacturer Foxconn that was widely considered to be one of the biggest economic development debacles in history.
But the impacts in Wisconsin persist, and business leaders and policymakers nationwide are still sorting out what the saga means in the high stakes battle between the states to lure businesses and jobs.
“It’s a big ‘I told you so’,” said Kim Mahoney, the only property owner to refuse to sell her home in Mount Pleasant, Wisconsin, to make way for the project, and now finds her house surrounded by a largely unused factory complex.
“Do I feel good about saying, ‘I told you so?’ No, not at all,” Mahoney said.
Hailed as “the eighth wonder of the world” by then-President Donald Trump, who traveled to Wisconsin for the 2018 groundbreaking, the Foxconn facility was supposed to be a mecca for advanced manufacturing on a sprawling site about 30 miles south of Milwaukee. The company promised to invest more than $10 billion building giant video displays, creating some 13,000 high-tech manufacturing jobs.
The state, under former Gov. Scott Walker and at the urging of the Trump administration, agreed to pay up to $2.85 billion in incentives, plus hundreds of millions more to buy the land and build the infrastructure to support the project. It is believed to be the largest such package ever offered by a state to a foreign company.
But almost immediately there were problems, which Foxconn has called “unanticipated market fluctuations.” The plan to build giant video displays quickly proved unworkable, so the company considered making screens for smartphones instead. Foxconn repeatedly missed its hiring targets, even as the state and local governments shelled out millions to continue developing the site.
Wisconsin slashes bad deal
Walker, a Republican, lost his 2018 re-election bid to Democrat Tony Evers, with the faltering Foxconn deal as a key campaign issue. In 2019, Evers’ administration began talks with Foxconn to renegotiate the incentive deal.
“Transparency and accountability and protecting the taxpayers has always been a top priority,” Evers told CNBC in July of that year.
Finally, in April, the two sides announced a new agreement.
After years of insisting that its initial hiring targets remained intact, Foxconn acknowledged that it would create only about 1,500 jobs. The state, in turn, slashed its subsidy to about $80 million.
“The last deal didn’t work for Wisconsin, and that doesn’t work for me,” Evers said in a statement.
The company, in turn, said in a statement that it welcomed the flexibility the new agreement provided.
“With this flexibility also comes the predictability and stability to know that Foxconn’s material contributions in Wisconsin will be recognized by the State as benchmarks are achieved year-over-year,” the company said.
