Remember Foxconn? Then-governor Scott Walker of Wisconsin lured the Chinese company to create “up to” 13,000 jobs in his state, with subsidies paid by Wisconsin taxpayers that could total as high as $3 billion. Foxconn was going to build a $10 billion factory complex to produce liquid crystal displays and other tech equipment that it now makes in Asia.
As the Prospect reported in an investigative piece last September, the taxpayer cost per new employee was estimated at $230,000, or five or six times the normal figure in such deals.
Though the 13,000 jobs were an estimate, not a formal commitment, President Trump touted that number at a groundbreaking ceremony last year with Walker, then-House Speaker Paul Ryan, and Foxconn CEO Terry Gou.
Well, that was then.
It now turns out that Foxconn will hire a maximum of 1,000 Wisconsinites, and is not building a factory at all. The company now describes its Wisconsin facility as an R&D center, combined with the possibility of some low-skill final assembly jobs.
There are several morals of this story. One, which we already knew, is never to trust Scott Walker or Donald Trump, either separately or together. Moral two is to keep your hand on your wallet whenever corporate execs hold you up for tax subsidies.
But the more important moral is that if the U.S. is to have a real industrial policy to reclaim U.S. manufacturing jobs, it is utter folly to rely on white knights in the form of Chinese companies. Making American manufacturing great again is not at the top of their national agenda.
Better to spend the money directly, on industrial strategies that benefit companies that are committed to producing in the U.S. It remains to be seen how much of the tax breaks were already squandered and what might be recouped.