Author: MacIverNews

Foxconn Deal, Not Biden Brought Microsoft to Wisconsin

By MacIverNews -

Biden took credit for bringing Microsoft to Wisconsin, even though he had nothing to do with it. He then bashed the Foxconn deal, without which Microsoft almost certainly would not have come to Mount Pleasant.

May 14, 2024
By Bill Osmulski

Wisconsin rolled out the red carpet for President Joe Biden last week, when Microsoft announced it would be building a $3.3 billion data center in Mount Pleasant. Everyone bent over backwards to give Biden credit for the deal, even though he had nothing to do with it.

Labor leaders, Democrat politicians, and even former Republican State Senator Dale Kooyenga all did their parts to play up Biden’s involvement.

“Everything that we are doing here in Racine County Wisconsin, is also benefiting directly from the work of this White House and this president,” Microsoft President Brad Smith claimed, citing indirect benefits from the Bipartisan Infrastructure Law, the CHIPS Act, and the Inflation Reduction Act.

Biden, himself, used the opportunity not only to take credit for the announcement, but also to criticize Donald Trump and other Republicans, who initially sought to bring Foxconn to the same location six years ago.

“Look what happened. They dug a hole with those golden shovels and then they fell into it,” Biden said. “Foxconn turned out to be just that, a con.”

The mainstream media fell into line as expected, making Biden the center of the story. The State Journal even ran the headline “Biden lauds new Microsoft center on site where Trump’s Foxconn project failed.” Reporters left out who was actually responsible for convincing Microsoft to come to Wisconsin, and how it was only possible because of the 2017 deal with Foxconn.

Foxconn’s Role

Six years ago, Foxconn was looking for a location in the Midwest for its next big project. President Donald Trump was flying over southeastern Wisconsin, looked out the window, and said “that would be a good site.”

Trump then brought up the idea of investing in Wisconsin to Terry Gou, Foxconn’s CEO. Gov. Walker took it from there. Under his leadership, the State of Wisconsin made a deal with Foxconn for it to build a state-of-the-art LCD factory in Mount Pleasant. The company promised to invest $10 billion and employ 13,000 people, and in exchange it could earn up to $2.85 billion in state tax credits.

Mount Pleasant created a TIF district to build a 3,000-acre business park. The DOT spent $168 million to expand the road network supporting the business park, the TIF spent $258 million for sewer and water upgrades, and American Transmission Company spent $257 million on electrical improvements. The total investment by 2021 was $683 million.

Unfortunately, Foxconn never built that $10 billion LCD factory. Instead, it built a smaller factory to build electrical components for solar panels employing 1,000 workers in Racine County. The company has invested $900 million throughout the state (as of 2021).

The Wisconsin Economic Development Corporation (WEDC), under Gov. Evers’ direction, renegotiated the deal 2021, reducing the total potential tax credits from $2.85 billion to $80 million. Up to that point, Foxconn had not met the requirements for any of the tax credits from the original Walker deal. Under the new Evers deal, Foxconn was able to claim $8.6 million in tax credits for 2021. It’s important to point out that Foxconn did not collect one cent under the Walker deal, and only started to receive tax benefits because of the Evers deal.

Even though the Foxconn project did not go as originally planned, the resulting site preparation and infrastructure improvements would not go to waste. WEDC recognized that the business park was a “premium site” in the region, and that Foxconn was only using a third of it.

WEDC, local leaders, and the business community began aggressively marketing the rest of it to other companies around the country. That’s when Microsoft entered the scene.

Marketing to Microsoft

In March 2023, Microsoft announced it would build a $1 billion data center on a 315-acre site in Mount Pleasant’s business park. In response, the legislature and the governor included a sales tax exemption for data centers in the state budget. That led to Microsoft expanding its plans to a 1,000-acre facility in November 2023. Microsoft broke ground in January 2024.

WEDC stated “Microsoft is expanding on property that was originally earmarked for the Foxconn Technology Group after the Taiwan-based company significantly reduced the size of its planned investment.”

Foxconn quickly pointed out that its “presence in Wisconsin has captured the attention of other businesses and investors that share a vision of the Park that is sustainable for business and community growth.”

At the time, even the mainstream media couldn’t completely ignore the connection.

“Microsoft’s development, if approved, combined with Foxconn’s commitment to create $1.4 billion in taxable value or pay the equivalent would make the financing district that was created to fund the business park debt free by 2037, 10 years ahead of schedule, said Todd Taves, the village’s financial advisor from Ehlers Inc.,” the Milwaukee Journal-Sentinel reported on November 14, 2023.

Enter Biden

Microsoft’s plans in Wisconsin kept getting bigger, and by May 2024, it had decided to build an artificial intelligence hub worth $3.3 billion that would require 2,300 union construction workers and create up to 2,000 permanent jobs. Someone in the Biden campaign smelled an opportunity.

Although Biden had no involvement in the project, he flew into Wisconsin on Wednesday, May 8th to headline the big announcement. The entire event immediately devolved into a Biden campaign rally, with “President Joe Biden Investing in America” banners everywhere.

Despite this fanfare, however, any serious attempt to tie Biden to the announcement is a dead end. For example, Biden bragged about the Regional Innovation Engines grants he authorized in January but left out the fact that none of those grants were directed to Wisconsin.

In October, the Biden Administration designated Wisconsin as a Regional Technology Hub under the CHIP Act. Of course, it was only one of 31 technology hubs created throughout the country, and it was directed to Wisconsin’s biotech industry. BioForward Wisconsin received the $395,550 grant that was to be split among five projects in Madison, Milwaukee, and the Fox Valley. Microsoft’s data center is not one of them.

Microsoft President Brad Smith tried to help make Biden a connection to the project. He said that the Bipartisan Infrastructure Law passed in November 2021 funded the roads that lead to the project. However, those roads had already been built prior to 2021. Smith also talked about how it funded high speed internet, which is also important to AI. Smith, like everyone else, was grasping at straws.

Republican Response

When word got out that Joe Biden planned to turn Microsoft’s announcement into a campaign rally, few Republicans choose to attend. Fewer still called out the president for lying about his role in the deal.

Assembly Speaker Vos pointed out that “Microsoft’s plan to create thousands more jobs in Racine County has very little to do with President Biden and everything to do with the efforts of local elected officials, local economic development leaders and Microsoft, itself.”

Congressman Bryan Steil (R-Janesville) said “the president is looking for any opportunity to come [to Wisconsin], and he’s more than willing to come and take credit for things that he was not involved in and didn’t do.”

Unfortunately, very few people (reporters, Republicans, or others) are willing to point that out.

Ramifications

Republicans certainly did dig a hole six years ago in Mount Pleasant, and Microsoft just laid a foundation in it.

Donald Trump, Scott Walker, Ron Johnson, and all the other Republican leaders who helped forge the Foxconn deal should be taking a victory lap over Microsoft’s $3.3 billion project. Instead, everyone seems mostly content with letting Biden take the win. That’s a big mistake. Wisconsin is the only battleground state where Biden is leading Trump. Letting him take credit for Microsoft, while bashing the Foxconn deal, is going to help Biden put Wisconsin in the bag early and focus on other states.

Furthermore, it’s dangerous to let a company like Microsoft allow Biden to turn its event into a campaign rally. In a very real sense, Biden just enjoyed a $3.3 billion in-kind campaign contribution from Microsoft. That company stands to benefit enormously from that act if Biden wins the elections, and they know they have never to worry about if he doesn’t. Without any fear of repercussions, other companies would be foolish not to follow suit.

And so, if the Republican Party fails to address these two problems, it’s going to face even more serious problems in the very near future.