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Aides Say Foxconn Will Change Economy

They insist that Foxconn will lose out on state incentives if it doesn't deliver.

AP Photo

MADISON, Wis. (AP) — Gov. Scott Walker's top aides offered legislators another round of assurances Tuesday that a Foxconn Technology Group plant in southeastern Wisconsin would transform the state's economy but promised the company would lose out on state incentives if it doesn't deliver.

Foxconn has proposed building a $10 billion facility to produce liquid-crystal display panels in Kenosha or Racine counties. The Taiwanese company has said the factory could employ up to 13,000 people. Walker has drawn up a bill that would hand the company $3 billion in incentives, including tax credits based on jobs created and capital investment, exemptions from environmental regulations and exemptions from state and local sale taxes on construction materials.

The Assembly approved the bill last week, but the Senate has been moving more cautiously. The Legislature's Joint Finance Committee, made up of both representatives and senators, held a public hearing on the measure Tuesday in Sturtevant, near where the plant might locate.

No one from Foxconn attended. Committee Democrats peppered Department of Administration Secretary Scott Neitzel and Wisconsin Economic Development Corporation CEO Mark Hogan with questions about whether Foxconn will deliver on its job promises, whether the company will employ Wisconsin residents and the environmental exemptions' effects on the landscape.

Neitzel called the plant a "once-in-a-century opportunity" for the state. He insisted that job tax credits will be tied to the number of jobs created. If the company creates only 3,000 jobs, the tax break would be smaller, he said.

Hogan added his agency is negotiating "clawback" provisions in a contract with Foxconn executing the legislation. Such provisions would require the company to repay at least some tax credits if it doesn't build the plant or create jobs.

Neitzel acknowledged that the plant will be highly automated but that simply means the jobs will be "fairly high-end," he said. More than 90 percent of the facility's employees will be Wisconsin residents, he predicted.

"(The facility is) creating a whole new ecosystem," Neitzel said. "It's creating an industry that's not here."

Sen. Lena Taylor of Milwaukee said she can't believe some lawmakers have voted on the bill without seeing the WEDC-Foxconn contract. She also said she's worried about the environmental rollbacks.

The bill exempts Foxconn from environmental impact statements and permits for filling state wetlands. The measure does require the company to mitigate two acres of wetlands for every one acre lost, a higher standard than the 1.2 acres mitigated for every acre lost found in current state law. The company would still have to obtain air and water pollution permits but all that didn't assuage Taylor.

"I just don't believe this cake is done baking in the oven," she said.

Environmentalists also warned the committee that eliminating environmental impact statements would rob the public of the chance to see the facility's overall effects and the bill could set a precedent for other companies to demand similar environmental exemptions.

"This bill is sending a bad message," said Amber Meyer-Smith, a lobbyist for Clean Wisconsin.

Rep. Gordon Hintz of Oshkosh said he's worried that Foxconn has made big investment pledges around the world that haven't materialized. He questioned what happens when liquid-crystal displays become obsolete.

Neitzel responded that Foxconn wants to locate in the United States because the nation is the world's largest electronics consumer. He reiterated Foxconn won't get the payroll tax credits if they don't create jobs.

Julia Campbell, a senior at Whitefish Bay High School, urged the committee to reject the bill. She called the incentives "an irresponsible bet" and warned 13,000 people would be out of work if the plant closes or Foxconn replaces them with robots.

"My generation will be the one to clean up this failed project," she said.

Republican Rep. John Nygren, the committee's co-chairman, said people want guarantees but the only one thing everyone can count on: Foxconn will find another state if Wisconsin can't pass the bill.

Walker gave a presentation Tuesday promising the facility would keep college graduates in Wisconsin and help startups and existing businesses that could become part of the plant's supply chain.

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