I absolutely don't understand Foxconn's game there. Was this just a scam from the start? What was the upside for them? Or did they actually intend to follow through and just failed?
Hope that the Governor of Wisconsin stayed a Republican? Now, that's not to say Democrats can't engage in grift, but, the deal was started under a Republican Governor in a notoriously corrupt state where the promise of Foxconn jobs was lauded by legislators, the governor, and the former President as a win for the people of the state, for our country, and a blow to China (that we were taking jobs back).
Foxconn's incentives seemed aligned with promising the moon and if those people were reelected, well, wouldn't compensating Foxconn for those promises and their outcome (the election outcome, not the factories) be fair?
Many people's gut reaction to a whiff of partisanship here or suggestion of corruption or conspiracy is to push back hard. Well, dammit, what did Foxconn want to get out of it except for billions of dollars in ill-gotten tax incentives?
I'm responding so incredulously to you because everyone's motivations here was advertised loudly. It's not a conspiracy if it happens in broad daylight.
It seems clear to me that they wanted to not have to pay taxes in Wisconsin for many, many years to come.
https://apnews.com/article/technology-wisconsin-d3f025e43ab0...
Had those politicians stayed in office, it's possible they would reward Foxconn for participating in the charade that helped them obtain reelection. Is it certain? No, I won't say it is.
But, what else was Foxconn's goal if not to actually realize those incentives without having to make the investment to justify them? They knew they were promised an enormous incentive by the state, and they knew that they would not fulfill their end of the bargain. If they also knew that they wouldn't realize those incentives, why did they pursue them? The simplest answer is that they fully intended to realize them.
Surely at least some of the negotiators of that deal legitimately believed that the other party - the Republican Governor and majority legislature in the state - would play ball?
A lot of the reporting at the time emphasized that Foxconn had a history of doing this in other countries. It seems like a negotiating tactic that evolved in an age of cynical political environments where everyone's proximate goal is to announce a 'deal' with the full expectation that they won't be in a position to take credit (or blame) for the quality of that deal.
What would have happened if this deal had been done in China?
No one would have reported on the failure. The local jobs numbers would have "jumped." Infrastructure would have been "built." Everyone would have gotten a pat on the back and/or promotion for hitting their economic targets.
The weakness of command-style political systems have always been that they incentize systemic lying.
The takeaway is that either (a) everyone who touched the Wisconsin project is an idiot, but an outlier in the company, or (b) the failure to execute in Wisconsin is indicative of the general state of the company.
(a) seems like a stretch, given the project's size and visibility. Ergo, (b).
A $1bn increase in revenue would be less than a 1% increase for Foxconn overall. That suggests they're probably willing to bear extremely high costs to establish new sites, as long as those sites will eventually yield significant revenue. Their negotiating tactics here seem short sighted from my point of view, but when you're as large as they are you create your own conditions.
Edit: Like...this deal seems to allow them to operate any of their businesses in Wisconsin. If they decide not to, they burn bridges in Wisconsin, but they wouldn't care about burning those bridges because burning them means they don't want to do business in the state. It seems like all they lose is their negotiators' salaries, small (for them) facilities costs, and whatever general goodwill they lose.