Pay dirt?

Trump and Walker break ground on Foxconn

by

Farmland extends to the horizon in every direction. A colossal-sized American flag is being held up by the long metal arms of two Caterpillar excavators. The Stars and Stripes are flanked by a row of Case tractors on each side. A stretch of the land has been flattened and groomed just for the occasion. It’s the future site of Foxconn’s 22-million-square-foot manufacturing campus — a facility which promises to bring thousands of jobs to Wisconsin and perhaps earn Gov. Scott Walker a third term in office.

But today, it’s just the most fortified dirt field on the planet.

The impending visit of President Donald Trump for the groundbreaking ceremony for the LCD screen factory has prompted the closure of the narrow, rural road that leads to this desolate spot near the village of Mount Pleasant. Secret Service agents with large weapons stand on towering construction equipment. The press has been bussed in and wait inside a white tent for the show to begin.

Former four-term Gov. Tommy Thompson is one of the first dignitaries to arrive. When asked if he would have championed an unprecedented $4.5 billion public aid package to lure the Taiwan-based Foxconn to the state — as Walker has — Thompson shoots a look like he’s spotted a trick question. He thinks about it for a second.

“You can’t argue with success,” he says as he walks away.

Foxconn is promising a $10 billion investment in the state: 11,000 construction jobs will be created just to build the LCD screen factory, which, once it’s up and running, could employ up to 13,000.

If all goes as planned, Foxconn will receive $4.5 billion in public assistance in the form of tax breaks, subsidies and just straight-up cash. The state incentive package for the foreign company includes $1.5 billion to offset payroll costs and $1.35 billion for capital expenses. The state is also expected to spend a few hundred million on road improvements to serve the massive manufacturing plant and is exempting Foxconn from paying sales tax on $150 million worth of construction materials. Racine County gave Foxconn $50 million to buy the land for its campus. The village of Mount Pleasant is handing over another $763 million to subsidize the project.

Under the rosiest scenario, taxpayers will fork over nearly $350,000 for each of the 13,000 jobs Foxconn has promised.

Trump isn’t due to arrive for another hour. Assembly Speaker Robin Vos, who represents the area, is snacking on kringle — the state’s official dessert. He’s chatting with Racine Mayor Cory Mason, who was one of four Democrats to vote for the Foxconn deal when he still served in the Assembly.

“Kringle brings people together,” says Vos between bites. “I think most of the state has been looking forward to today.”

All of the Democratic candidates for governor oppose the Foxconn deal. Madison Mayor Paul Soglin has said Walker is “going to shiver whenever he hears the word Foxconn” heading into the November election, believing it's a “giveaway” that will backfire with voters.

Vos acknowledges that support for the project has been tepid. He mentions the recent Marquette Law School poll which found 46 percent of those surveyed think the state is paying more than the Foxconn plant is worth and 40 percent think the company will be worth at least what the state is paying.

“I think here today we are showing that a great economic development project can be good politically. But that’s not why we are doing it. Frankly, the polls show the opposite because people need to be convinced,” says Vos. “Once the cranes are in the air and once thousands of good paying jobs [are created], there’s going to be an awful lot of folks with egg on their face who have been so negative about this project.”

Even though many Democrats see Foxconn as potentially Walker’s undoing, Mason says “days like today are why I got into politics.”

“Democrats are for jobs. Democrats are for good paying jobs. And this is tens of thousands of them coming to our area. It’s an exciting day,” says Mason. “I love the juxtaposition of Case tractors — the oldest company in Racine — being front and center to help build the newest addition of innovation in the area…. Today we are on the national stage. It’s important enough of an announcement that the president, speaker of the House and the governor are all here to kick this off. Foxconn will now call Racine County home. That’s exciting, historic news.”

Gov. Scott Walker is all smiles as he strolls in with Foxconn CEO Terry Gou. Officials slap Walker on the back and give him a thumbs up as he walks by. He brags about the state’s low unemployment number before making the case for the project to reporters.

“An independent report showed a $51 billion economic impact for the state over the next 15 years,” says Walker. That means an $18 return for the economy for every dollar of incentives we put in: 18 to one is pretty good.”

Walker is citing a report from the Metropolitan Milwaukee Association of Commerce released earlier this year. However, the report pegs the public investment in the project at $2.85 billion — just the state’s cash payments to Foxconn. If you use the $4.5 billion figure — which includes tax breaks, infrastructure improvements and local government subsidies — the math works out to a $11 to $1 return over 15 years.

Rep. David Bowen (D-Milwaukee) — who attended a protest march against the Foxconn deal later in the day — says the company is already flaking out on its promises. The day of the groundbreaking ceremony news broke that Foxconn has scaled back its original plan for a state-of-the-art “Generation 10.5” factory and will instead build a smaller, less costly plant first.

“People are fired up. They clearly see that Republicans are trying to pull a fast one,” says Bowen. “Just today, [Foxconn] wants to scale back their plans yet they don’t want to scale back the subsidies. I think that’s a sign that we are in trouble.”

Bowen thinks even if Foxconn delivers on its promises, the billions being offered in aid would be better spent on public schools, transportation and the UW system. A 2015 report shows UW-Madison alone creates a $15 billion impact on Wisconsin’s economy annually — $24 in economic activity for every dollar of state tax money invested in the university.

“We are selling out the future of our state for a huge unknown,” says Bowen. “I vehemently oppose anyone who supports this deal. I think it will backfire for Walker and the Republicans. Especially if the plans continue to change as they just did today.”

Walker and the other dignitaries move into position as Trump’s motorcade comes speeding up to the groundbreaking site. The president is joined by House Speaker Paul Ryan and the first official Foxconn employee hired in Wisconsin. The press pool which travels with Trump storms in and muscles into the sea of cameras already set up by the local news outlets. Five gold-plate shovels are thrust in the ground as Trump enters the scene. The President digs a little dirt, poses for a few photos and it’s over. As he’s walking back to his bulletproof Cadillac, Trump responds to reporters shouting questions at him from 60 feet away: “It’s going to create a lot of jobs. A lot, a lot, a lot of jobs.”

And with that, the hoopla ends and the traveling press pool literally sprints back to the white vans waiting for them. They are heading to another Foxconn event where Trump will give a speech. This reporter tries to grab a seat on one of the press vans only to be stopped by a Secret Service agent. “Nice try,” he says.

At that moment, a man in an SUV pulls up to the white tent.

“Is Donald Trump still here? He’s supposed to swim in my pool,” says the man, who won’t give his name, but his license plate starts with “Mike.”

He lives about a mile and a half away from the future Foxconn site but is not among the homeowners being forced to sell their house to make way for the factory. He’s a fan of Trump and supports the project.

“I think it’s great. This is a wonderful opportunity,” says the man. “The first Chinamen that offers me $350,000, I’m out of here.”