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Legislature approves $3B incentive for Foxconn

In this Thursday, Sept. 7, 2017, photo, a man plays a video game at Foxconn's exhibition booth promoting its Sharp 8K flat screen TV in Beijing. The Wisconsin Senate approved nearly $3 billion in cash payments for Foxconn Technology Group on Tuesday, Sept. 12, 2017 while also giving the Taiwanese company a slightly less expedited path to the state Supreme Court for certain legal challenges related to a planned massive electronics manufacturing factory. (AP Photo/Andy Wong)

A man plays a video game at Foxconn’s exhibition booth promoting its Sharp 8K flat screen TV in Beijing on Sept. 7. The Wisconsin Assembly approved nearly $3 billion in cash payments for Foxconn Technology Group on Thursday. (AP Photo/Andy Wong)

By SCOTT BAUER
Associated Press

MADISON, Wis. (AP) — The Wisconsin Assembly sent a $3 billion incentive package for the Taiwan-based Foxconn to Gov. Scott Walker on Thursday, signing off on a deal to bring the electronics giant to the state with the biggest subsidy to a foreign company in U.S. history.

The bill approved on a bipartisan 64-31 vote would make $2.85 billion available to Foxconn Technology Group in cash payments if it invests $10 billion and hires 13,000 workers. The Senate approved the proposal on Tuesday.

The Republican governor was in South Korea on a trade mission at the time of the vote but pledged to sign the incentives package into law soon.

Walker, who negotiated the deal and is its lead champion, joined President Donald Trump at a White House event in July to announce Foxconn’s plans to build in Wisconsin, heralding it as a game-changer for American manufacturing.

Assembly Democrats, who didn’t have the votes to stop it, slammed the proposal Thursday as being unfairly rigged to benefit Foxconn at the expense of taxpayers. But Republican Assembly Speaker Robin Vos defended it as an unprecedented opportunity for the state and country.

“What’s rigged is the deal for the taxpayer, the workers, the families and ultimately those of us who have the good foresight to realize when a good deal is put in front of you,” Vos said.

Foxconn is the largest contract manufacturer of electronics, best known for making iPhones. Its long list of customers also includes Sony Corp., Dell Inc. and BlackBerry Ltd. The Wisconsin plant would make liquid-crystal-display panels for televisions, computers and other uses.

The total incentive package is 10 times larger than anything ever approved in Wisconsin and would be the biggest state subsidy to a foreign company in the United States.

Critics have warned that there aren’t enough protections that would ensure taxpayers could recover the state’s payments to Foxconn if it automates production and fires workers. They’ve also said more needs to be done to guarantee that Wisconsin workers and businesses get preference both when the plant is being built and when it up and running. Foxconn has said it hopes to open the plant in 2020 initially with 3,000 workers. It has said the employment figure could eventually increase to 13,000.

The Assembly passed the bill with the votes of all Republicans and four Democrats. Two Republicans joined all other Democrats in voting against the plan.

Opponents objected to a provision that would allow the Wisconsin Supreme Court to take up appeals of certain lawsuits related to Foxconn, skipping the appeals court. No other business in the state is provided such an expedited route to the Supreme Court.

Under the bill, the company would have 15 years to access the maximum $2.85 billion in cash payments tied to meeting the investment and hiring numbers. They can also receive $150 million in sales-tax exemptions on construction materials.

The Walker administration is charged with negotiating minimum hiring numbers to trigger the payments called for in the contract with Foxconn. Foxconn has also not selected the exact site of the plant, but it is directing its attention to property in Racine County, in between Milwaukee and Chicago.

Democrats have also raised alarms about exemptions under the bill that would waive the requirement that Foxconn first have an environmental impact statement before building what could be a 20-million-square- campus. Foxconn would also be allowed to build in wetlands and waterways.

 

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