UPDATE, 1:07 p.m.
Mark Hogan of the Wisconsin Economic Development Corporation sent the following statement, which we publish in full:
“Over the past 45 years, Foxconn’s success has been based on the company’s ability to foresee and adapt to technological advancements. Foxconn’s long-term success both globally and within Wisconsin is centered around the alignment of its business model with ever-changing global economic conditions, including evolving customer demands. WEDC’s performance-based contract with Foxconn provides the company the flexibility to make these business decisions, and at the same time, protects Wisconsin’s taxpayers. As has been reported, Foxconn will not qualify for tax credits until, at the earliest, 2020, and then only if the company meets its annual job creation and capital investment requirements. Our ongoing discussions with company officials reflect Foxconn’s continued commitment to the State of Wisconsin.”
UPDATE, 12:35 p.m.
According to WTMJ news partner Milwaukee Business Journal, the chairman of Foxconn has assured the Evers Administration they are still committed to Wisconsin, and that the original article by Reuters on their potential changes to the Mount Pleasant plant have inaccuracies.
Original story
The head of the Milwaukee Metropolitan Association of Commerce believes the state of Wisconsin should have few worries about the planned changes with Foxconn’s development in Racine County.
“Wisconsin is well protected,” said Metropolitan Milwaukee Association of Commerce President Tim Sheehy on the Steve Scaffidi Show.
The state is making a major investment to Foxconn in up to $4 billion in tax breaks which are contingent upon certain hiring benchmarks about the development in Mount Pleasant that was supposed to be an LCD display manufacturing facility.
According to Reuters, Foxconn is switching its focus on new employment in Racine County toward research and development, not manufacturing, and that hiring goals of 5,200 new jobs by next year may not be achieved.
“At the state level, the contract very clearly lays out both the wages that have to be paid out as well as the capital investment that has to be made before incentives are paid out from the state,” Sheehy told Scaffidi.
“At the local level, you have to understand Foxconn has signed up for a long-term tax incremental financing district.”
Sheehy explained that the shift from manufacturing to research and development at the Wisconsin facility stems from the industry Foxconn is involved in, a “disruptive, dynamic, global industry.”
“Their plans are going to evolve and change. It’s not necessarily comforting to everybody, but this is the reality,” Sheehy said.
“It’s clearly changing their thinking or affecting their thinking, in terms of what is best suited for the campus and investment here in Wisconsin.”
That investment, Sheehy said, involves some decision to locate offices in Milwaukee, Green Bay and other areas – things that were not part of the Mount Pleasant plan.
“There are things that are coming to fruition that were not in the plan two years ago, and there were things not coming to fruition that were in the plan,” said Sheehy.
The Foxconn move and the tax breaks provided to them became a major political issue, both when the development was announced with a major ceremony with President Donald Trump and fellow Republicans in then-Governor Scott Walker and then-Speaker of the House Paul Ryan, and with campaign discussion about the issue with Democratic Governor Tony Evers who defeated Walker in November.
However, Sheehy praises Evers for his approach on Foxconn in recent weeks.
“Clearly…the Foxconn project has been a political football, kicked back and forth during the election. It’s always challenging…to get to the business facts. I give Governor Evers and his administration a lot of credit for how they’ve approached this.”
In the end, Sheehy believes that for Foxconn to successfully pivot its plans to the current landscape of its industry is a better move than to have a mainly-manufacturing plant which will lead to Foxconn failing in Wisconsin.
“We want the partnership to be successful,” said Sheehy. “We don’t want them to make an investment that isn’t going to be successful.”
