Thursday, July 27, 2017

Did Trump Bring Foxconn And $10 Billion Plant Investment To Wisconsin?

The Donald is taking credit for making a deal with Foxconn to build a plant in Wisconsin.  There are good reasons for being skeptical about this deal.  In the first place,  Wisconsin made the deal with Foxconn.  The state will contribute $3 billion in tax credits, job training, and infrastructure investment.  In return, Foxconn will invest $10 billion in the factory.  The state determined that the $3 billion investment was a good deal by estimating to number of jobs that would be created in the plant and in the construction of the plant.  The state may think that investing $3 billion in return for a $10 billion investment is a good deal, but there are reasons to believe that Foxconn will not make the $10 billion investment:

* The $10 billion investment in Wisconsin by Foxconn's parent company is greater than it has spent on capital investment over the last five years.

* Foxconn's parent has pledged to spend $27.5 billion in a variety of international capital investments, including Wisconsin.  That is more than Foxconn's parent company has spent on capital investment in the last 23 years.

The Foxconn announcement was good for Paul Ryan as well as for The Donald.  The plant will be located in Ryan's district.  Politically, it is good for them and for Governor Walker.  We will have to wait to see how the proposed investment turns out.  In the meantime, the politicians will have collected their return on the announcement.  

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