FoxConn: Less is less

As part of its deal with Wisconsin for state monies being handed over, FoxConn’s job numbers are put forward every December (but will not be publicly revealed until March or April of 2020).

Last year, FoxConn was short the 260 jobs it needed for 2018 when it only hired 156 employees. For 2019, FoxConn needs 520 jobs, and the company is claiming it has already met that goal.

Note: If FoxConn manages to have 520 employees in 2019, it also gets the 2018 funds it originally missed out on. Good deal for FoxConn, it seems.

But, media reports by Jake, Murphy’s Law, the verge in October, and the verge in December indicate that FoxConn is doing little more than moving shells on a table: there appears to be nothing actually going on other than some relatively small construction of warehouse-type buildings even while the company claims that everything is fine.

Indeed, the verge’s December review scuttles any possible thought that FoxConn is doing anything considered to be manufacturing at all. All the buildings FoxConn has bought are still empty, and plans that originally should be nearing completion are delayed again and again (the latest is that LCD manufacturing of any kind will not start until 2022).

As a neighbor of mine remarks, FoxConn is a complete mystery. Nothing the company is actually doing seems to make any sense whatsoever from the perspective of trying to be a viable project of some (or any) kind.

As Jake noted on January 1st of this year, even Mt. Pleasant, which still formally embraces FoxConn, is holding off on transferring to FoxConn more of the land that the village previously bought from homeowners for the project. Given FoxConn’s lack of activity, there are questions over whether FoxConn will ever use all of this land. As Jake observes, Mt. Pleasant is facing an additional $112 million of debt in 2020, and so it is facing some serious debt problems:

Take a look at that $86.2 million in debt principal and $9.0 million in interest. Basically Mount Pleasant has to pay off one debt payment by borrowing more money, and they also plan to keep adding $48 million in sewer and other water work, along with other expenses. So $8.4 million in taxes from Foxconn compared to $143 million in expenses that are earmarked to their specific TID district? And a lot more in new debt expenses for the future? Doesn’t seem like a good deal to me.

Even with the extra borrowing, they’re still bleeding the Foxconn district’s balance down from $103.3 million to less than $72 million, which means that if more money and tax base isn’t returning to the Foxconn district in the next few years (and that seems increasingly unlikely), there’s even more debt and more borrowing that’ll have to happen.

Or…the Village will go bankrupt because it can’t (or won’t) keep going further into debt to keep pumping false hope into this white elephant. At that point, state taxpayers would likely be asked to bail out Mount Pleasant, based on this provision that is part of the Fox-con package approved by the GOP Legislature in 2017 and signed by then-Governor Walker.

Given that FoxConn has quietly (see the verge’s December reporting) transferred control of its Wisconsin operations to a subsidiary called Foxconn Industrial Internet (Fii) that is NOT part of the original FoxConn deal, it seems that FoxConn is preparing to walk away and leave Wisconsin suing a shell company that has few to any assets in Wisconsin for all of the broken promises.

I have a bad feeling about this.

Update (10 Jan. 2020): Corrected some typos and re-wrote sections of the paragraph on Mr. Pleasant’s debt problems.

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