Friday, March 03, 2017

The vaporware industry

Putting tens of people to work on ceremonial groundbreakings that never lead to anything.
“Foxconn is going to spend a tremendous amount of money on building a massive plant,” Trump said the day after the investment was revealed, “and probably more than one.”

But, as Harrisburg learned, the gulf between these eye-popping announcements and what takes place on the ground can be huge — and frequently overlooked.

“They are scrambling to look good,” Mark Selden, senior research associate at Cornell University’s East Asian program, said. “It’s a sign of the pressure that Trump is placing on everyone in the world to deliver on his agenda.”

Companies tend to view these announcements as an opening bid in a negotiation, said Alberto Moel, a senior analyst with Bernstein Research in Hong Kong. Firms know politicians like the splashy headlines. And if everything falls into place — the business climate improves, they extract enough concessions such as tax breaks and free land — they might be able to make it happen.

“It actually puts the onus on the U.S. in a way,” Moel said. “They are saying: ‘I’m along for the ride. Here’s my proposal.’ ”

If the deal falls apart, as it often does, no one is going to talk about it.

“The government themselves aren’t going to remind you of that, Trump has no intention of helping you remember that,” Moel said. “What’s the downside?”
The company makes a big promise contingent upon a package of fine-print concessions and giveaways. That either comes together or it doesn't. Everyone's PR needs are satisfied in any case. By the time the deal is quietly shelved, everyone is off to sell the next circus.  Either way, the pols involved (especially, the Trump variety pols) will go on touting the mere announcement as a great victory regardless of what alternative facts say.

No comments: