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Debate starts on incentive package for Foxconn (UPDATE)

By: Associated Press//August 3, 2017//

Debate starts on incentive package for Foxconn (UPDATE)

By: Associated Press//August 3, 2017//

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The Associated Press

MADISON (AP) — Supporters of a planned $10 billion electronics factory that could bring 13,000 jobs in the largest economic-development project in Wisconsin history called it a once-a-generation opportunity during a public hearing Thursday.

State lawmakers are moving quickly to approve a $3 billion tax incentive deal for Foxconn Technology Group, based in Taiwan. The company, the world’s largest contract maker of electronics, announced last week that it plans to come to southeast Wisconsin to open the first factory for making liquid-crystal displays to be built outside Asia. The deal, which Wisconsin leaders and President Donald Trump have heralded as transformational for the state and national economy, requires the state to approve $3 billion worth of tax breaks, which will be contingent on Foxconn’s fulfilling its promises for hiring and spending.

The proposal is moving quickly: Thursday’s hearing came just six days after the bill was introduced. Democratic critics, who don’t have the votes in the Republican-controlled Legislature to stop the proposal, have argued that there shouldn’t be a vote without a detailed analysis from the nonpartisan Legislative Fiscal Bureau.

Democratic Rep. Tod Ohnstad, who represents a part of the state where the factory could be built, said his enthusiasm for the project is “tempered by many outstanding questions.”

Critics have raised alarms about other provisions that would waive environmental permits and regulations to speed up the construction of the plant. Foxconn has said it intends to build a campus with 20 million square feet of office space spread over 1.56 square miles. But critics question whether Foxconn will follow through, noting that it promised in 2013 to invest $30 million and hire 500 workers for a new, high-tech factory in Pennsylvania that was never built.

“We cannot let this opportunity pass us by,” said Scott Neitzel, the top aide to Gov. Scott Walker.

Foxconn CEO Terry Gou submitted a statement that was read by committee chairman Rep. Adam Neylon. Gou said the project would “transform the American electronics industry.”

“Made in America makes sense for Foxconn and our customers and our business partners,” Gou said in the statement.

Foxconn hopes to open the plant by 2020 with 3,000 workers, a number that could increase to 13,000 over six years. Walker’s administration said there would be 22,000 additional indirect jobs created through the plant’s opening, 16,000 of which would be related to construction.

Under the deal, most of the $3 billion worth of tax breaks would be tied to Foxconn’s delivering on its investment and job-creation promises. The money would come as cash payments, ranging up to as much as $200 million a year, and could be recouped if Foxconn failed to live up to its promises.

There is also a provision calling for the state to reimburse local governments 40 percent of the money that they might spend on infrastructure related to the Foxconn project. The money would be recouped only if the proposed plant were not built.

Elsewhere, the bill would allow the state to borrow $250 million for rebuilding Interstate 94, which connects Milwaukee and Chicago and is near where the plant is expected to be.

The committee on jobs and the economy plans to vote on Tuesday to advance the bill to the full Assembly, which is expected to pass it as soon as Aug. 14. It must also clear the GOP-controlled Senate, but Republicans there have said they first want to pass Wisconsin’s month-late budget.

Foxconn is best known for making iPhones and other Apple devices but its long list of customers includes Sony Corp., Dell Inc. and BlackBerry Ltd. In addition to the primary plant in southeastern Wisconsin, Foxconn is also eyeing a location in or near to Madison for a possible secondary site.


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