By: Axios
February 07, 2019
In New York, official scrutiny is triggering doubts about the future of Amazon’s much-publicized $3 billion in concessions to build a new headquarters employing tens of thousands. And in Wisconsin, Foxconn has created uncertainty about whether it will fulfill promises to build a huge new factory employing 13,000 people.
Why it matters: Together, the deals cast unwanted new attention on breaks granted to big companies that pledge to hire thousands, often renege, and demand contracts that block disclosure of the arrangements.
The Foxconn and HQ2 stories are part of a pattern across the U.S., according to a new study and interviews with experts.
The study — an examination of 164 deals in Texas since 2003, conducted by Nate Jensen, a professor at UT-Austin, and Calvin Thrall, a graduate student — found that about a quarter of the companies walked back on promised jobs after signing.
Many of the companies that underdelivered had stipulations that shielded them from public scrutiny — contract clauses that allowed them to block the release of details on the deals, Jensen and Thrall found.
Amazon inserted such conditions into its HQ2 contracts with both New York and Arlington, Virginia, says Jensen.