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Foxconn Considered Ohio, Michigan for $10 Billion Plant

A skilled workforce was key to the company's decision.

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MADISON, Wis. (AP) — The high stakes contest for Foxconn Technology Group's first North American manufacturing facility, a potential $10 billion investment that could employ 13,000 people, came down to a battle between Wisconsin and neighboring Michigan, new documents released Thursday show.

The Taiwanese company also toured sites in Ohio before Wisconsin won out, thanks to a $3 billion state incentive package that's the largest ever offered to a foreign company in U.S. history, the documents show. Wisconsin Gov. Scott Walker's administration released 20,000 pages of documents related to the deal Thursday in response to open records requests from several news outlets.

The global technology giant plans to make liquid crystal display panels at the southeast Wisconsin plant in Mount Pleasant, located between Chicago and Milwaukee. Wisconsin won the deal last summer with help from President Donald Trump's administration.

Jim Paetsch, vice president of the Milwaukee 7 economic development group, said in a briefing for a May meeting with Foxconn that Wisconsin and Michigan were finalists for the project. In a bid to land the factory, Michigan offered Foxconn a package worth $3.7 billion, including about $3 billion in tax exemptions and $700 million in cash incentives. Some of the newly created incentives were later scaled back by the Legislature, though.

"Our incentive offering will be evaluated not only in absolute terms, but in comparison to the offer Foxconn receives from Michigan, a state with manufacturing assets comparable to Wisconsin's and a long history of making lucrative incentive offers for mega-projects," Paetsch wrote. "Michigan's team, like ours, has surely recognized that the Foxconn project is a generational opportunity."

Walker, a Republican up for re-election this year, has caught criticism from Democrats who argue the incentives Wisconsin offered were too rich. Walker and others have defended the project, noting that Foxconn must hit investment and employment targets to get all of the incentives.

The newly released records shed light on the competition to land the Foxconn project and what steps Wisconsin was doing to out-maneuver its Midwest neighbors.

Wisconsin's chief economic development officer, Mark Hogan, said in a May message that Foxconn toured locations in Ohio near Cincinnati, Cleveland and Columbus. In Michigan, Hogan said they looked at Detroit, Flint and Battle Creek. Foxconn was also considering locating in Pennsylvania and North Carolina, Hogan said.

Hogan said in the email that Michigan Gov. Rick Snyder was involved with the tours and meetings in Michigan.

"The Foxconn team was generally impressed with what Detroit had to offer (some good locations and the availability of engineers) and appreciated Governor Snyder's involvement," Hogan wrote.

In a separate email, Hogan said that Wisconsin needed to play up the fact that Snyder was not able to run for another term this year, creating inconsistency in leadership there. Walker is seeking a third term.

Hogan, in yet another message, stressed that the availability of a skilled workforce was key to Foxconn's decision.

"I would recommend Governor Walker focus on what we are doing in Wisconsin to address the current, and future, workforce needs of our employers," Hogan wrote.

Walker has made workforce development one of his signature issues since Foxconn announced plans to come to the state. Wisconsin has record-low 3 percent unemployment and Walker has proposed spending nearly $7 million on a marketing campaign to lure young workers from the Midwest to the state. He's also proposed tougher work requirements on food stamp recipients to get them into the workforce.

Another document shows that more that at least a dozen potential sites across Wisconsin were considered before Foxconn settled on one in Racine County, not far from the Illinois border.

The Milwaukee Journal Sentinel, reporting on the same records, said Hogan told colleagues in a July email that Wisconsin didn't want to add to its subsidy package by offering the same deal to suppliers.

That could be important as other states look to attract those suppliers by offering their own incentives, the newspaper reported. Walker and Wisconsin officials have been touting the economic development, and jobs, expected to come to the state with suppliers here, an impact that would be lessened if other states lure them away.

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