Foxconn, the Taiwanese firm with a checkered history once billed as putting Southeastern Wisconsin on the road to become a major tech center, was recently in the news again. This time it was because of President Biden’s visit to Wisconsin where Microsoft is purchasing land from Foxconn that failed to meet its promises. 

National TV news broadcasts reviewed pictures of the 2018 Foxconn groundbreaking ceremony; showing Foxconn CEO, Terry Gou, along with Governor Scott Walker, arguably the most divisive governor in recent Wisconsin history, former House Speaker Paul Ryan in whose congressional district the project exists, and President Trump, the self-proclaimed business expert, who wildly proclaimed this project to be potentially the “Eighth wonder of the world.” Really, the eighth wonder of the world? You can’t make this stuff up.

In 2017 when the Foxconn Tech Group announced it was considering coming to Wisconsin, Governor Walker who was running for reelection got excited, and promised to subsidize the outfit before the legislature had even acted. But that was soon to happen. The project was hailed as a $10 billion investment creating 13,000 jobs. Foxconn was to receive between $3 to 4 billion dollars in subsidies paid in increments over fifteen years if it met its targets. Had it been paid out, it would have been the largest subsidy ever given to a foreign firm in U.S. history.

The state legislature passed a $2.8 billion tax incentive package that required Foxconn to meet specified hiring and capital investment benchmarks during the following ten years.

The deal required the town of Mt. Pleasant in Racine County to purchase the land required. This involved the removal of homes, the last of which was just recently purchased. Mt. Pleasant and Racine County committed to spending $806 million for sewer, water, and other costs, of which they reportedly have spent about $260 million. By 2021, Wisconsin spent $683 million on a manufacturing campus that never came to full fruition.

The deal was controversial from the start, supported by Republicans and some regional Democrats, but generally opposed by most Democrats. The vote in the State Senate was 20 to 13 in favor with only one Republican opposing it. The vote in the Assembly was 64 to 31 in favor with only two Republicans opposing it. Interestingly, Southwestern Green County’s Assemblyman Todd Novak, one of the few Republicans to ever stand up to Governor Walker on anything, was one of the few Republican legislators with the common sense to oppose that scheme.

Given the history of Foxconn with its string of broken promises in other regions and countries, if the deal sounded too good to be true, it was.

As time passed and little substance was happening, the deal was negotiated down; 13,000 jobs became less than 1,500, the $10 billion investment became $672.8 million. It is unclear what the current employees are actually doing. 

Even though politicians of the region generally supported the deal, it did not receive universal local support. Supporters cite that Foxconn is the largest local taxpayer. But some who were forced to sell their homes feel that they were subject to a “bait and switch” scam. Much of the land designated for the project remains undeveloped. What to do with it?

It appears that it’s Microsoft to the rescue. Microsoft has completed the purchase of 1,000 acres of land for its Mt. Pleasant data center. It now owns around two square miles in Racine County. Microsoft president, Brad Smith, recently announced plans to invest $3.3 billion in the Mt. Peasant data center campus between now and 2026, providing 2,300 union construction jobs. Related Microsoft initiatives in Wisconsin include a manufacturing-focused AI Co-Innovations Lab at the UW Milwaukee campus, and working with tech colleges and local organizations to train and up-skill AI workers.

Based on the checkered history of Foxconn vs. the incredible record of Microsoft, who would you prefer to put your money on? In which company would you prefer to purchase stock? Which business would you most trust to provide good jobs?

The same Republicans who chastise Democratic office holders for “picking winners,” subsidizing green energy, and enacting laws addressing climate change are the same politicians who claim to be “business savvy.” As President Biden quipped during his recent visit to Racine, referring to the men with the golden shovels at the Foxconn groundbreaking, “They dug a hole, and then fell into it.”

It was Governor Walker who hailed the Foxconn deal, but rejected federal money for high speed rail from Milwaukee to Madison, money that would clearly have done some good. His delusion included believing himself to be presidential timber. As he blew his sizable war chest in Iowa, even Iowa conservatives wouldn’t buy into Walker’s pipe dream, abruptly ending his presidential bid.

It was former House Speaker Ryan who sold himself as a policy expert. He has a long history of trying to destroy FDR’s New Deal that is responsible for the Social Security program. Privatizing Social Security, along with Medicare made possible by LBJ, never was a good idea. And we still have some Republican politicians trying to take away those programs.

And the third Republican in those photos of the Foxconn groundbreaking with the golden shovels was then-President Trump, who viewed that project as potentially the “Eighth wonder of the world.”

Wisconsin Senator Johnson, in a tight race with Alabama’s Senator Tuberville for title of the U.S. Senate’s most obtuse member, weighed in on the Foxconn ground breaking with a June 28, 2018 press release, “…I want to congratulate President Trump, Governor Walker, and Speaker Ryan for the commitment and vision to make this possible.” Johnson’s college business degree has done nothing for his own vision which has always been less than acute. Johnson’s vision precludes him from distinguishing between January 6, 2021 “tourists” on a stroll, from thugs breaking through police lines into the U.S. Capitol on a mission of destruction.  

Foxconn did indeed live up to its name. They outfoxed Governor Walker and his Republicans on a monumental con job. It’s time for Republican politicians who claim to be business savvy to stop lecturing Democrats on business matters.

— John Waelti of Monroe, a retired professor of economics, can be reached at jjwaelti1@tds.net. His column appears monthly in the Monroe Times.