It appears that the debacle that was Amazon's HQ2 competition, where we were subjected to the disgusting beauty pageant of cities abasing themselves competing for a second headquarters that eventually went to where Bezos owned mansions, is finally bearing fruit.
The horror at the that spectacle, was one of the reasons that Scott Walker's Foxconn deal became so toxic in Wisconsin, which led in large part to his reelection loss in 2018.
Another result is that we are seeing efforts to claw back subsidies from companies that have not fulfilled their requirements, first in Ohio's claw-back demands to GM, and now Wisconsin is threatening to cancel its disasterous deal with Foxconn.
Much as I said with Ohio's decision, about f%$#ing time:
Wisconsin is denying Foxconn Technology Group billions of dollars in state tax credits until officials with the company come to the table to draw up a new contract for the Racine County project — once touted as the “eighth wonder of the world” by President Donald Trump.
The company might also face financial penalties through claw-back provisions included in the existing contract if a new agreement isn’t reached.
In a letter sent Monday to the Taiwan-based company’s Vice Chairman Jay Lee, Wisconsin Economic Development Corp. Secretary Melissa Hughes said “Foxconn’s activities and investments in Wisconsin to date are not eligible for credit” under the more than $3 billion contract first signed back in 2017. The letter also underscores that negotiation attempts between the state and company this summer failed to result in a new contract.
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The company reported in the summer it had created enough jobs in southeastern Wisconsin last year to receive state funds — despite being told almost a year ago that the $3 billion in tax subsidies would not be doled out until a new contract was drafted to match the project. State officials say tax subsidies agreed to in the contract are tied to jobs and capital investment for specific projects, which Foxconn is failing to deliver.
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Regardless of how many jobs were added, WEDC said in the letter, the state is unable to calculate job creation or capital investment tax credits because Foxconn has failed to carry out the project as promised.
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Claw-back provisions in Foxconn’s original contract show that, if the agreement is not amended by the end of 2023, the company could face up to $500 million in recovery payments.
Walker’s contract with Foxconn would provide incentives totaling as much as $3 billion over 15 years if the company reached the 13,000-employee benchmark and made a $10 billion capital investment in the state.
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While originally promised as a Generation 10.5 facility that would build larger panels for TV screens, the project has downsized to Generation 6, which would manufacture small screens for mobile phones, tablets, notebooks and wearable devices.
“Today’s announcement cements Foxconn’s legacy in Wisconsin as one of broken promises, a lack of transparency, and a complete failure to create the jobs and infrastructure the company touted in 2017,” Assembly Minority Leader Gordon Hintz, D-Oshkosh, and longtime Foxconn critic, said in a statement. “Looking to the future, I hope lawmakers will assess projects based on what is best for Wisconsin, and utilize rigorous, independent economic analysis based in reality, rather than chasing pie-in-the-sky projects reeking of short-term political motives.”
Foxconn officials first came to the state in March 2019 to discuss amendments to the contract. Late last year, Evers’ administration told the company it no longer was eligible for tax subsidies under the existing contract, and a new document would need to be drafted. While amending a contract is a common practice, officials have said the state cannot unilaterally change the agreement without Foxconn’s participation.
I so hope that Foxconn gets gigged like a flounder.
This deal was a disaster, and thoroughly corrupt, and it needs to be ended.
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