Empower Wisconsin | Dec. 17, 2019
By M.D. Kittle
MADISON — Here’s a question the mainstream media should be asking: Could Gov. Tony Evers screw up the state’s transformational economic deal with Foxconn?
Last month, the administration warned Foxconn that the company wouldn’t be eligible for tax credits because it changed plans for a multi-billion-dollar advanced manufacturing plant in southeast Wisconsin, according to written exchanges between the Evers Administration and Foxconn officials.
State Department of Administration Secretary Joel Brennan on Sunday told WISN-TV’s UpFront program that Foxconn officials will have “to come back to the table” to renegotiate a new contract.
While Foxconn said it remains committed to creating thousands of jobs and investing in Wisconsin, the frustration from company officials in the correspondence is palpable.
“Distractions like these leave job creators and job seekers wondering if doing business in our great state is welcomed by Governor Evers’ Administration,” wrote Foxconn’s U.S. strategist Alan Yeung in a Nov. 18 letter to Brennan, according to the Chicago Tribune. The communications were first obtained by tech site, The Verge.
Foxconn earlier this year said it was changing its plans. Instead of making large flatscreen TVs at its proposed manufacturing campus in Mount Pleasant, it would concentrate on smaller liquid crystal display screens for cellphones and other devices.
The Evers team says that changes things, and that Foxconn won’t get a cent of the nearly $3 billion in state incentives the company can earn (through job creation and capital investment targets) until it updates the development deal. This, despite the fact that Foxconn has not retreated on its goals of a $10 billion investment and the creation of 13,000 jobs.
Foxconn has spent more than $100 million in the Badger State to date, awarding at least $350 million in construction contracts and hiring hundreds of people.
Manufacturing experts say businesses are watching the state’s squabble with Foxconn closely. The uncertainty created by the Evers administration does not bode well for future economic development, they say.
“We would like to see the administration dial back the rhetoric and find a way to make this contract work for both parties, and it really seems like it is working for both parties right now,” said Scott Manley, executive vice president of government relations for Wisconsin Manufacturers & Commerce.
As Manley notes, there’s much at stake. Foxconn’s success is the state’s success, potentially impacting a huge ecosystem.
“We have members who are very much invested in the success of this project,” he said. “We have members who are suppliers, members doing some of the infrastructure work, and like any other business, they don’t want to see a major customer pushed out of the state.”
Foxconn’s Yeung in his letter told Brennan that Foxconn is disappointed with what he regards as “immaterial matters” that are a “misappropriation of our collective time and energy as we endeavor to bring significant investments and create jobs for decades to come.” Still, such “distractions” are forcing Foxconn to consider “all available options related” to the contract.
Foxconn has been down this road before.
Former Gov. Scott Walker, who led the unprecedented economic deal that brought Foxconn to Wisconsin, has said that the world’s largest maker of electronics backed out of a plan to build a $30 million factory in Pennsylvania because of a change in state leadership. There’s a good deal of truth in the assertion.
“In the case of Pennsylvania, they changed leadership, they changed who the governor was.”
While Politifact has disputed Walker’s take, what’s hard to ignore is the fact that Wolf, billed as “The most liberal Governor in America,” brought into office an agenda of big tax increases and stiffer government regulations on business. Sound familiar? And, similar to the Evers administration, new contract terms for the Foxconn deal in Pennsylvania.
“From our perspective, we hope that Gov. Evers’ administration proceeds cautiously about declaring a contract signed on behalf of the people of Wisconsin essentially null and void,” Manley of WMC said.