Foxconn Deal Was Good but Becoming More Expensive

The incentive package of $3 billion that Wisconsin used to entice Foxconn to build a factory in the state was just the beginning.

More incentives have been added to the deal making it over $4 billion, which includes the local government costs for incentives and several infrastructure projects such as highways and roads, power lines and sewer.

Foxconn will also be allowed to skip the established environmental rules along with other oversight it otherwise would be required to follow.

Foxconn, based in Taiwan, is known best as the manufacturer of electronics that builds devices such as iPhones in huge factories across China, where its employees do not just work but live.

The plan was announced last July and the plant will build flat screens and was hailed at that time by President Donald Trump and Wisconsin Governor Scott Walker as the newest sign of the rebirth of manufacturing in America, winning jobs back that for years have been lost to China.

When the plan was announced, Walker said that this deal was a one in a century one for the state and the U.S. Construction of the facility is scheduled to start in 2018.

Jobs at the plant should pay approximately $53,000 annually. Walker at the time of the announcement vowed that the plant would give the state its own Silicon Valley.

However, the low rate of unemployment in Wisconsin has some businesses worried the plant, which could have as many as 13,000 workers, could make it even harder to find workers.

Wisconsin’s unemployment rate is currently 3.2%, which is close to its all-time low. The state only has 102,000 workers who are unemployed.

One government official in Wisconsin said that he is hearing that many employers are having a difficult time filling jobs that are available at this time. Some companies have had to hold off adding additional shifts or are not taking some orders because there are not enough workers and they fear they could not fill the orders.

Amongst the added costs to the project for Foxconn is an advertising campaign that will cost $6.8 million to attract workers from other states to work for companies in Wisconsin including at the new factory.

However, it is the price tag that keeps rising on the deal that has made it very controversial. It is expected to be a big issue during the governor’s race in 2018 where Walker will seek his third term.

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