Foxconn Technology Group’s investments in the US have fallen short of promises made in 2017, when US President Donald Trump hailed the firm’s promises to build a factory as a sign of America’s manufacturing revival.
Politicians had said the deal could eventually generate 13,000 new jobs.
But it has brought fewer than 300 jobs so far – well below initial targets, Wisconsin officials have said.
Foxconn had already said it was changing its plans for the plant.
Wisconsin officials identified the job numbers to date in a letter denying Foxconn tax breaks, which the state awarded to the firm, a major Apple supplier, as part of the 2017 deal.
The incentives were conditional on the firm meeting certain investment and job creation goals and generated significant controversy in Wisconsin, an important state in the US electoral calculus.
The move by state officials to withhold the tax breaks comes just weeks before voters in the US head to the polls to decide if Mr Trump deserves a second term as president.
Mr Trump, whose campaign slogan in 2016 was “Make America Great Again”, has sought to present his time in office as a boon for the US economy.
But even before the economic collapse triggered by the pandemic, employment in the manufacturing sector had remained relatively flat.
Democrats in Wisconsin seized on the figures as further proof of deal-making gone awry, noting that the state had spent $1bn supporting the project.
“This cements Foxconn’s legacy as one of broken promises, a lack of transparency and a complete failure to create jobs,” said Wisconsin State Representative Gordon Hintz, a leader of Democrats in the state and a critic of the project. “Republican politicians should be held accountable.”
Iveson says $17.3-million federal housing investment puts Edmonton on the right track to end homelessness – Edmonton Journal
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“The goal was to create urgency around accommodation for everybody this winter and urgency around bringing the right kind of units online in a matter of months rather than years and so I think we’ve accomplished that with the federal government’s announcement,” he said. “I think we’ve made considerable progress within the last eight or nine weeks and anyone who wants to come in from the cold will have a place to do it within that 10-week timeframe. So I’m pleased with how it’s come together.”
Now that the funding is secured, Iveson said the city will work with social agencies over the next few weeks to “go shopping” for the right sites.
“We’ve been in discussions with a number of hoteliers and also looking at some of the modular sites that the city had previously approved so the money will move quickly and as soon as we have a decision point on that we’ll bring that forward, but our goal will be to move that within weeks,” he said.
Iveson said the city will also be aggressively pushing for a portion of the other $500 million that will be granted to specific projects. A few projects are already in the works, Iveson said, pointing to four planned supportive housing complexes that will provide 150 units. Projects under this stream must be completed within one year of a signed agreement.
The city is working to open up a 24-7 temporary shelter at the Edmonton Convention Centre by Friday, which will accommodate up to 300 residents overnight. The Mustard Seed and Hope Mission are also looking to expand their overnight shelters in order to serve more people at larger spaces while maintaining appropriate physical distancing amid the COVID-19 pandemic.
Investment approaches to continued uncertainty – Investment Executive
“The average client portfolio is riskier today than it has been historically because you’re not getting the natural diversification” that bonds provide, said panellist Luke Ellis, CEO with London, U.K.–based Man Group plc, a global investment management firm with offerings that include quantitative portfolios. As a result, asset allocation must be reconsidered, he said.
Ellis also warned of the challenge of identifying winners and losers in a world of massive government spending. The market is not efficient when fiscal policy helps support weak companies, he said.
Neil Cunningham, president and CEO with Ottawa-based PSP Investments, one of Canada’s largest pension investment managers, said PSP is reducing government bonds in portfolios in favour of emerging market debt, private credit and high inflation–linked infrastructure projects with little operating or credit risk. Adding in these assets increases risk, so the firm reduces equities to stay within risk limits, he said.
More generally, as a long-term investor, Cunningham aims to distinguish between noise and longer-term trends. The U.S. election, he said, is noise: “We’re much more concerned with the trends that get accelerated by Covid,” such as de-globalization, greater e-commerce adoption and working from home.
Cunningham also suggested investors follow the long-term trends of ESG and diversity and inclusion because governments, employees and customers will consider these factors as they legislate, work and shop.
Mohammed Alardhi, executive chairman with Manama, Bahrain–based Investcorp, a global manager of alternatives, highlighted the need to diversify within sectors and geographies, noting that investors in oil-producing regions were particularly hard hit by the pandemic.
Cunningham described investing in a U.K. pub business just months before the economic shutdown. No one expected a business that stayed open during the Blitz to close, he said. The lesson: “Unless you diversify both geographically and by sector, you’re bound to get hit by something you didn’t expect.” Unexpected downturns also require investors to ensure they have sufficient liquidity, he said.
Panellists also considered trends arising from geopolitics.
The outcome of U.S.-China tensions will be key for many portfolios over the next decade, depending on the position investors take, Ellis said.
For example, should China be a small part of a portfolio because of the country’s restrictions on foreign businesses, or should it be a large part as the eventual largest economy in the world?
As U.S.-China tensions put pressure on other governments to pick a side, investors will face an increasingly challenging environment, Ellis said.
Cunningham said his firm was increasing allocations to Australasia and emerging markets based on long-term geopolitical trends that will see those economies benefit.
The outlook for investment in Canada
Ian McKay, CEO with Ottawa-based Invest in Canada, also spoke at the session and provided a positive outlook for foreign investment in this country despite an overall negative forecast for foreign investment flows.
Global foreign direct investment (FDI) is expected to decrease by up to 40% this year and by a further 5–10% in 2021, according to the World Investment Report 2020 from the United Nations Conference on Trade and Development.
This would bring FDI flows to “the lowest levels we’ve seen in over 20 years,” McKay said, which will motivate governments, investment funds and agencies to reassess their strategic plans and investing criteria.
As they do so, Canada is proving attractive.
Since the pandemic, Invest in Canada has experienced a spike in interest from global investors in three sectors in Canada: life sciences, associated with a vaccine for Covid-19; the digital economy, in which Canada is a leader in artificial intelligence; and clean technology, such as hydrogen or electric cars and renewable energy.
“In Canada, we have the right ingredients for that — the raw materials, highly skilled workforce, innovative ecosystems and global market access,” McKay said.
Fundamental factors also favour Canada when it comes to attracting investment, such as political and economic stability, an open mindset to free and rules-based trade, and a global supply of workforce talent, McKay said.
Despite the forecast for foreign investment flows, “we are certain that the future is bright for those investors who continue to build and expand their operations in Canada,” McKay said.
Foreign Investment Plummets During Pandemic, Except in China – The Wall Street Journal
Foreign direct investment in China largely held steady during the first half of this year, even as investment inflows into the U.S. and European Union plummeted, in a fresh sign that the world’s second-largest economy has suffered less damage from the pandemic.
Globally, the monthly average for new investments for the first half of the year was down almost half on the monthly average for the whole of 2019, the largest decline on record, the United Nations’s Conference on Trade and Development said Tuesday. But while foreign investment in the U.S. and European Union fell by 61% and 29% respectively, inflows to China were down by just 4%. China attracted foreign investment totaling $76 billion during the period, while the U.S. attracted $51 billion.
The U.S. has long been the top global destination for businesses investing overseas, while China has long ranked second.
Unctad said the modest nature of the decline in foreign investment to China was surprising. Back in March, when China was the epicenter of the pandemic with significant parts of its economy in lockdown, Unctad forecast that it would be the big loser, and expected global flows of investment to fall by 15% across 2020.
However, China’s economy reopened in April just as the U.S. and Europe were in lockdown, and the country has since contained the virus with only localized and short-lived restrictions. By contrast, the U.S. and Europe have seen resurgences in infections that have slowed their recoveries. In the three months through September, China’s economy had already exceeded the levels of output recorded in the last quarter of 2019, according to data out last week.
The resilience of foreign investment in China appears to confound earlier expectations that businesses would seek to reduce their reliance on the country as a key part of their supply chains. But James Zhan, Unctad’s director of investment and enterprise, said it was too early to reach that conclusion.
“One of the main reasons for reconfiguration of global supply chains is to increase resilience, which requires backup plans and redundant capacities,” he said. “A more practical approach companies can take would be building additional production bases outside of China, which means new investment to other countries instead of divestment from China or moving production out of China.”
Across all developed economies, inflows of foreign investment were down 75% in the first half from the 2019 monthly average to total just $98 billion, a level last seen in 1994. In some cases—such as the Netherlands and the U.K.—that decline took the form of a reduction in loans from the parent company to its overseas subsidiaries, which are counted as foreign investment.
With tensions running high, Washington and Beijing have pushed to decouple technology and trade. But American financial firms including JPMorgan and Goldman Sachs are doubling down on investing in China and expanding headcount. Photo Composite: Crystal Tai[object Object]
“In times of crisis, some multinational enterprises would like to keep funds close to home,” said Mr. Zhan. “Fear that Covid-19 and the quest for funds could lead to tax increase may also accelerate the intra-firm capital movements.”
Foreign investment in developing economies proved more resilient, falling by just 16% to $296 billion.
Unctad said there were signs of a pickup in investment during the three months through September, and it repeated its forecast that flows for 2020 as a whole would likely be 40% down on 2019. But it warned that the second wave of rising infections hitting a number of developed economies could see flows down 50% for the year.
While foreign investment in most countries fell during the first six months, a small number saw an increase. One was Germany, which saw inflows rise 15% to $21 billion, largely due to a small number of foreign acquisitions of existing businesses.
Write to Paul Hannon at firstname.lastname@example.org
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