Political Irony

In July 2017, Donald Trump announced that Taiwanese manufacturer “Foxconn will build a state-of-the-art manufacturing facility for the production of LCD panel products in Wisconsin”. The 20-million square foot campus was supposed to cost $10 billion and employ 13,000 workers. Trump bragged that this was proof of his ability to revive American manufacturing.

Former Wisconsin governor Scott Walker lured Foxconn by giving them a stunning $4 billion in tax breaks, which means that the taxpayers were ponying up over $300,000 per job. I’ve often been a critic of luring big companies with corporate welfare, because such schemes simply move jobs from one place to another, rather than creating new jobs. In addition, the loss of tax revenue for schools and other needed infrastructure often means that fewer new jobs will be created in the future. Indeed, Walker made deep cuts to the state university system and under him, Wisconsin ranked dead last of all the states in new-business start-up activity.

But it gets worse. Foxconn just announced that they will not build a manufacturing facility in the US after all, saying “In terms of TV, we have no place in the US. We can’t compete.” Instead, it will be more profitable to build the panels in China and Japan, ship them to Mexico for final assembly, and import the finished product to the US, because of the high cost of labor in the US. Duh.

Foxconn will instead build an R&D facility in Wisconsin, but rather than 13,000 jobs, the number is likely to be around 1,000 workers. Despite what Trump said, these will not be manufacturing jobs, they will be “knowledge” positions, the kind of jobs for which you need highly educated workers.

Trump’s base is screwed again. Will they notice?