Foxconn to invest $10B into Wisconsin manufacturing, jobs
WASHINGTON, July 25, 2017 — President Donald Trump, Vice President Mike Pence, Speaker Paul Ryan and Governor Scott Walker joined with other political and business leaders, including billionaire hotelier Steve Winn and his wife, Andrea, to applaud Taiwanese manufacturer Foxconn’s factory investment in Wisconsin.
Also attending were Wisconsin Assembly Speaker Robin Vos, R-Rochester, state Senate President Roger Roth, R-Appleton, Milwaukee County Executive Chris Abele and Milwaukee Bucks president Peter Feigin.
Foxconn chairman and CEO Terry Gou was also present. The Foxconn plant will make liquid crystal display panels used in computer screens, televisions and the dashboards of cars, initially employing 3,000 workers making an average of $53,900 a year in highly skilled jobs.
“America does not have a single LCD plant to produce a complicated system. We are going to change that,” said Gou at a news conference. “It starts today with this investment in Wisconsin.”
The deal represents a huge opportunity for Wisconsin, but with that opportunity will come risks. Wisconsin legislators will have to decide whether to pass a subsidy package nearly 50 times bigger than any package ever given in the past.
Getting Foxconn to build the plant in Wisconsin will take $1 billion to $3 billion in incentives paid over up to 15 years, sources said. If the deal costs $1 billion and the company creates 10,000 jobs, the government will have spent $100,000 per job.
But it’s about more than the jobs that Foxconn would directly bring to Wisconsin.
Governor Walker’s office says the project could reshape the economy of southeastern Wisconsin, which includes areas from Milwaukee to Madison, and involves not building a factory but a virtual village, with housing, stores, and service businesses—spread over at least 1,000 acres.
At more than 20 thousand square feet, the factory would be one of the largest manufacturing campuses in the nation.
Sources are saying Foxconn could end up using multiple locations in southeastern Wisconsin, perhaps with a factory in one place and offices and research facilities in another.
Walker’s office said the deal could eventually result in up to 22,000 jobs that would be indirectly created by suppliers and businesses looking to locate near Foxconn and serve the company and its workers.
“We saw tremendous interest among a great number of states (in the Foxconn plant) because it means an incredible amount of good wage job growth and an incredible potential for spinoff economic development,” said the White House.
The deal comes as President Trump seeks to fulfill a promise to bring manufacturing jobs that have been lost in recent decades back to the United States.
The Milwaukee Journal Sentinel reports that in China, Foxconn is huge; the company employs some 700,000 people. The firm’s revenue last year totaled about $135 billion. Tom Still, head of the Wisconsin Technology Council, said he believes that every job in a Foxconn plant could bring an additional one to two jobs at company suppliers that would also locate in Wisconsin to be closer to their key customer.
Still said those additional jobs could help to justify massive state and local subsidies to Foxconn. “I think the benefits (of subsidies) need to outweigh the costs and I think they would over time if you construct the deal right.”
State Sen. Bob Wirch, D-Kenosha, said he wants more specifics but expects to back the plan to bring Foxconn to southeastern Wisconsin. “I would have to look at the details, but generally I am in favor of incentives or corporate welfare when it’s attached to jobs,” he said.
But state Rep. Jimmy Anderson, D-Fitchburg, expressed deep skepticism about any potential deal. He said in a statement, “Wisconsin taxpayers should not be subsidizing private corporations at the expense of our children, schools, and roads.”
Anderson also suggested Walker has the wrong priorities, saying he “more than bends over backwards” to give corporations a “multibillion-dollar handout.”
How many jobs Foxconn will deliver to Wisconsin and how much workers would be paid is not known, however bringing the company to Wisconsin would be a win for Walker and Ryan, as well as for Trump.
It would also be a big thank you from Trump, who is the first Republican presidential candidate since Ronald Reagan to win the historically blue state.