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Wisconsin lawmakers vote to pay Foxconn $3 billion to get new factory

Joe Mullin
House Speaker Paul Ryan of Wisconsin, greets Terry Gou, president and chief executive officer of Foxconn, before President Donald Trump announces the first US assembly plant for electronics giant Foxconn, in the East Room of the White House on Wednesday, July 26, 2017.
Photo by Jabin Botsford/The Washington Post via Getty Images
The Wisconsin Assembly voted 59-30 on Thursday to approve a bill to give incentives worth $3 billion to Taiwan-based Foxconn so that the company would open its first US plant in the state.
Foxconn, best known for supplying parts of Apple's iPhones, will open the $10 billion liquid-crystal display plant in 2020, according to Reuters. The bill still has to be approved by a joint finance committee and the state Senate.
Both houses of Wisconsin's legislature are controlled by Republicans, and the deal is supported by Wisconsin Governor Scott Walker, a Republican who negotiated the deal.

The vote was largely, but not entirely, along party lines. Three Democrats joined 56 Republicans in supporting the deal. Two Republicans and 28 Democrats voted against it.
Opponents said the deal wasn't a good use of taxpayer funds. The $3 billion incentives package includes about $2.85 billion in cash payments from taxpayers and tax breaks valued at about $150 million. The state is also waiving certain environmental rules.
Supporters, including Walker, say that the deal will be transformational for Wisconsin, pushing its economy toward high-tech manufacturing. Foxconn will spend $10 billion to build the plant. The facility has been planned to employ 3,000 workers, and supporters say that number could grow to 13,000 workers in the future.
The deal was announced last month at a White House event, although it was contingent on Wisconsin approving the massive incentives bill. President Donald Trump praised the deal, saying it was a win for anyone who "believes in the label 'Made in the USA.'"
The LCD display panels will be produced under the Sharp brand, which Foxconn purchased last year.

Democratic opponents of the deal have pointed out that paying $3 billion to get 3,000 jobs means the state subsidy amounts to around $1 million per job.
That's $66,600 per employee for each of the next 15 years, according to an analysis by Prof. Michael Hicks, an economics professor at Ball State University who opposes the deal. Foxconn will pay the workers an average of just over $53,000 per year. (Those numbers are based on the initial count of 3,000 workers.)
"Voters might wish to ask just why each Wisconsin household is stuck with a nearly $1,200 bill to subsidize a company that is half as productive as Wal-Mart, and one-tenth as productive as Harley-Davidson," writes Hicks in an op-ed for MarketWatch. "It is an over-the-top bad deal for Wisconsin."
However, the full $3 billion in incentives only becomes available if Foxconn ends up creating 13,000 jobs. But there's no ironclad guarantee in the deal that Foxconn even meets its 3,000 job promise, so the opponents' "$1 million per job" argument could be true if the factory only ends up employing 1,500 people or fewer.
Even if the plant never expands beyond 3,000 jobs, though, Foxconn will get $1.35 billion for building the plant. Assuming even the beginning stages of the deal come together, Wisconsin will be paying $500,000 worth of incentives per job.
Either way you slice it, the Wisconsin proposal will be the largest-ever subsidy provided by a state to a foreign company, according to Politifact.
Wisconsin lawmakers vote to pay Foxconn $3 billion to get new factory Reviewed by Chidinma C Amadi on 6:42 PM Rating: 5

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