With Foxconn’s formal groundbreaking ceremony in Racine County this week, now is a good time to review the basics of this historic opportunity for Wisconsin.
As one of the largest greenfield investments by a foreign-based company in U.S. history, Foxconn’s project will result in the first factory manufacturing liquid-crystal displays in North America, and the only one outside Asia.
The magnitude of Foxconn’s investment is best summarized by the numbers, which have not changed since the Wisconsin Economic Development’s contract was signed in early November. Foxconn’s $10 billion investment will result in a 20-million-square-foot campus on 1,200 acres in Mount Pleasant. The four-year construction phase will create an estimated 10,000 jobs and 6,000 direct and indirect jobs.
We are already seeing the statewide benefits of Foxconn’s historic investment. Contractors in Dodge, Jackson, Marathon, Outagamie, Walworth and Wood counties are among those who have received contracts for the first $100 million worth of work related to site preparation. The Wisconsin companies receiving these contracts are expected to directly or indirectly employ 800 workers from 60 of the state’s 72 counties.
Once fully operational, the plant will have 13,000 good-paying, family-supporting jobs created with an average salary of approximately $54,000, and an additional 20,000 to 25,000 indirect and induced jobs needed to support the operation. Consistent with its “Wisconsin First” commitment, Foxconn will spend about $1.4 billion on annual supply-chain purchases from Wisconsin-based companies. A recent study indicated Foxconn will add $51 billion to Wisconsin’s gross domestic product over the next 15 years, having an economic effect of $18 for every $1 spent by the state on incentives.
Wisconsin won the Foxconn project even though other states had offered more incentives. WEDC’s contract provides Foxconn with incentives worth up to $2.85 billion – $1.5 billion for the creation of 13,000 jobs and $1.35 billion for its capital investment. The tax credits are earned on a “pay as you grow” basis and the company’s reporting information will be verified by an independent third party. The contract lays out minimum annual job-creation levels that must be met before Foxconn receives any tax credits. It also has clawback provisions, supported by the guaranties of both Hon Hai Precision and Foxconn Chairman Terry Gou, should the company not comply with the contract.
The transformational effect Foxconn will have on Wisconsin will go well beyond its manufacturing plant. Foxconn’s presence will provide significant opportunities for existing Wisconsin businesses and our academic partners, and also attract venture capital. We’ve already been given an idea of what the future will hold from Foxconn’s recent announcements regarding its North American headquarters in Milwaukee, its commitment to hiring 3,000 veterans and its $1 million investment in the “Smart City, Smart Future” partnership with our tech colleges and public and private colleges and universities.
Over the past 44 years, Foxconn’s success has been built on the company’s ability to be at the leading edge of new technology. The state’s decision to work with Foxconn is a result of our confidence the company will continue to be at the forefront of demand-based technology changes, as well as of our willingness to seize an opportunity to have the research and development efforts driving those changes happen here in Wisconsin.
Chairman Gou has said that a primary reason for his decision to invest in Wisconsin was our strong manufacturing legacy and the outstanding workforce that has supported industry for generations. Foxconn’s transformational effect on Wisconsin will undoubtedly build on this legacy by opening up tremendous opportunities for future generations of Wisconsinites.
Mark Hogan is the secretary and CEO of the Wisconsin Economic Development Corporation, and played a key role in negotiating the state’s contract with Foxconn.
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