Iron County Progressive


From The New Yorker Magazine

Did Scott Walker and Donald Trump Deal Away the Wisconsin Governor’s Race to Foxconn?

As the public has become aware of the spiralling costs associated with building a new Foxconn plant in Wisconsin, the deal has become something of a political liability for the governor.


November 3, 2018

In September of 2017, Governor Scott Walker, Republican of Wisconsin, signed a contract that would make his state the home of the first U.S. factory of Foxconn, the world’s largest contract electronics manufacturer. The company, which is based in Taiwan and makes products for Apple, Sony, Microsoft, and Nintendo, among others, would build a 21.5-million-square-foot manufacturing campus, invest up to ten billion dollars in Wisconsin, and hire as many as thirteen thousand workers at an average wage of fifty-four thousand dollars a year. For Walker, whose approval had fallen to the mid-thirties after his aborted Presidential run, the deal was seen as a crucial boost to his reĆ«lection prospects. “The Foxconn initiative looked like something that could be a hallmark of Walker’s reĆ«lection campaign,” Charles Franklin, a professor and pollster at Marquette University Law School, told me. “He could claim a major new manufacturing presence, one that would also employ blue-collar workers in a region where blue-collar jobs are more scarce than they used to be.”

The idea of putting the plant in southeastern Wisconsin originated in April of 2017, during a helicopter ride President Donald Trump took with Reince Priebus, a Wisconsin native and Trump’s chief of staff at the time. Flying over Kenosha, Priebus’s home town, they passed the empty lot that once held the American Motors Corporation plant. “Why is all that land vacant?” Trump asked, according to an account Priebus gave to a Milwaukee television station. “That land should be used.” When Terry Gou, Foxconn’s chairman, came to the White House to discuss Foxconn’s desire to build a U.S. factory, Trump suggested the site in Kenosha. It wasn’t big enough, but the town of Mt. Pleasant, fifteen miles north, pursued the company aggressively, and was ultimately selected by Foxconn in October of 2017.

The project moved quickly. Last June, a groundbreaking ceremony was held in Mt. Pleasant to celebrate a political triumph for Trump and Walker. After depositing a couple scoops of earth with a gold-plated shovel, Trump called Foxconn’s future campus “the eighth wonder of the world” and hinted that its promise of well-paying manufacturing jobs could be a model for other states in the Midwest, which were, like Wisconsin, crucial to Trump’s narrow Electoral College victory in the 2016 election. “I recommended Wisconsin, in this case,” Trump said. “And I’ll be recommending Ohio, and I’ll be recommending Pennsylvania, and I’ll be recommending Iowa.”

But as the public has become aware of the spiralling costs for these jobs, the Foxconn deal has become something of a political liability for Walker, particularly among voters outside of southeastern Wisconsin. Those costs include taxpayer subsidies to the company totalling more than $4.5 billion, the largest subsidy for a foreign corporation in American history. Since Wisconsin already exempts manufacturing companies from paying taxes, Foxconn, which generated a hundred and fifty-eight billion dollars in revenue last year, will receive much of this subsidy in direct cash payments from taxpayers. Depending on how many jobs are actually created, taxpayers will be paying between two  hundred and twenty thousand dollars and more than a million dollars per job. According to the Legislative Fiscal Bureau, a nonpartisan agency that provides economic analysis to the Wisconsin state legislature, the earliest citizens might see a return on their Foxconn investment is in 2042.

There are other costs that have contributed to public skepticism over the Foxconn deal. At Walker’s request, Scott Pruitt, then the head of the Environmental Protection Agency, overruled the objections of his staff to grant most of southeastern Wisconsin an exemption from limits on smog pollution. (Walker declined to respond to interview requests for this article.) The Wisconsin state legislature passed a bill granting Foxconn special court privileges; unlike other litigants, the company can make multiple appeals of unfavorable rulings in a single case, and can even appeal an unfavorable ruling directly to the conservative-controlled Wisconsin Supreme Court. But few costs have caused more outrage than the manner in which Mt. Pleasant’s Village Board of Trustees secured the twenty-eight hundred acres of land, roughly four square miles, necessary to build the Foxconn campus.

To make space for Foxconn’s development, which will also necessitate many miles of new roads, the Village Board has been buying properties, sometimes using the threat of eminent domain to force reluctant homeowners to sell at a price determined by the village. Several weeks before the groundbreaking, the seven-member board went further. By a 6–1 vote, the board designated the entire twenty-eight-hundred-acre area “blighted,” which will allow Mt. Pleasant to issue bonds that are exempt from both federal and state taxes, and may also grant the village a more expansive use of eminent domain to seize the property of the few remaining holdouts, a small if highly visible group, whose property-rights fight embodies a wider sense of disenchantment with the Foxconn deal.

The agreement’s high cost, estimated at nearly eighteen hundred dollars per household, has created a heavy burden for taxpayers, and a political risk for Walker. After the terms were announced, last year, Governor John Kasich, Republican of Ohio, said, “I’ll tell you one thing, it’s not going to take us forty years to make back the investment we make. We don’t buy deals.” A majority of Wisconsin voters have never believed the state was getting its money’s worth, according to polls conducted by Franklin at Marquette. His polling has also consistently shown a majority of voters believe that Foxconn will not help businesses in their area. “The governor’s fortunes are so tied up with his backing of Foxconn,” Franklin said. “When it was first announced it was, in the short term, perceived as this major victory for Walker, the thing that might solidify its hold on the election.” Now, Foxconn is one of the main reasons Walker has trailed his Democratic opponent, Tony Evers, the state superintendent of schools, in nearly every poll since the August primaries.




There are other costs that have contributed to public skepticism over the Foxconn deal. At Walker’s request, Scott Pruitt, then the head of the Environmental Protection Agency, overruled the objections of his staff to grant most of southeastern Wisconsin an exemption from limits on smog pollution. (Walker declined to respond to interview requests for this article.) The Wisconsin state legislature passed a bill granting Foxconn special court privileges; unlike other litigants, the company can make multiple appeals of unfavorable rulings in a single case, and can even appeal an unfavorable ruling directly to the conservative-controlled Wisconsin Supreme Court. But few costs have caused more outrage than the manner in which Mt. Pleasant’s Village Board of Trustees secured the twenty-eight hundred acres of land, roughly four square miles, necessary to build the Foxconn campus.

To make space for Foxconn’s development, which will also necessitate many miles of new roads, the Village Board has been buying properties, sometimes using the threat of eminent domain to force reluctant homeowners to sell at a price determined by the village. Several weeks before the groundbreaking, the seven-member board went further. By a 6–1 vote, the board designated the entire twenty-eight-hundred-acre area “