Followed by a week of flip-flopping between investment and development plans across Wisconsin, technology manufacturing company Foxconn re-committed to the construction of a Gen 6 fabrication facility in Racine after a talk with President Donald Trump Friday.
The company claimed the decision was finalized after a personal conversation with the White House, in addition to evaluations that helped determine the best fit for their Wisconsin projects.
Local leaders in the county, including Village of Mount Pleasant President David DeGroot and City of Racine Mayor Cory Mason, applauded the announcement.
“We welcome today’s announcement that Foxconn has determined the LCD/TFT technology it will build at its advanced manufacturing campus in the Village of Mount Pleasant,” the leaders said a joint statement. “We remain committed to ensuring that Foxconn’s investment in our community will bring unparalleled economic development, job growth and enhanced quality of life for those in Racine County and throughout Wisconsin.”
However, this resolution was preceded by a series of conflicting amendments to the company’s original plan for growth.
On Wednesday, Louis Woo, special assistant to Foxconn Chief Executive Terry Gou, told Reuters the company plans to shift its focus away from blue-collar factory jobs and instead to research and design positions.
Gov. Tony Evers is tasked with finding an amicable solution with the tech giant.
"The administration is in regular, weekly communication with senior leadership at Foxconn, however, we were surprised to learn about this development,” the Evers administration said in a statement.
Assembly Speaker Robin Vos, R-Rochester, and Senate Majority Leader Scott Fitzgerald, R-Juneau, have led the charge defending the company’s autonomy and accusing Evers’ potential policies of being at fault for the restructuring. The duo empathized with Foxconn and stressed the importance of sticking with it.
“The company is reacting to the wave of economic uncertainty that the new governor has brought with his administration. Governor Evers has an anti-jobs agenda and pledged to do away with a successful business incentive for manufacturing and agriculture,” they said in a joint statement.
The previous administration under former Gov. Scott Walker was part of a team that made a deal with Foxconn that included up to $4 billion in tax incentives for the tech company. Foxconn failed to meet a benchmark of the incentive program, having fallen short of the employment goal in 2018 by hiring 178 full-time jobs rather than the 260 targeted, and failing to earn a tax credit of up to $9.5 million.
Many Democratic representatives have spoken against those who have consistently supported Foxconn, encouraging renegotiation of the deal.
“Even when faced with this clear broken promise from original claims by Foxconn, Speaker Vos and Sen. Fitzgerald have chosen to side with big corporate interests against the people of Wisconsin,” Rep. David Bowen, D-Milwaukee, said. “While legislative Republicans may not ‘blame Foxconn for altering plans,’ the Wisconsinites whose tax dollars are committed to funding this increasingly bad investment at $315,000 per job surely do.”
UW-Madison Public Affairs and Economics Professor Menzie Chinn does not believe the original plan was beneficial for the state.
“It didn’t strike many economists as a good idea in terms of use of state government funds,” Chinn said.
Chinn is particularly worried about the impact the changing deal will have on localities that have begun adapting with the anticipation of more blue-collar work, anticipated changes in housing costs.
“Suddenly you don’t have house prices going up the way people had been expecting. Those people are going to be out,” Chinn said.
Foxconn’s changing promises are not a new trend for the company. The tech giant guaranteed Pennsylvania $30 million to build a factory in Harrisburg in 2013. The factory never came.
“We shouldn’t have been surprised by this … this company does not have a good reputation for keeping its promises,” Chinn said.
Democratic leadership also cited concerns over Foxconn’s ethics Wednesday.
“Every step of the way Foxconn has over-promised and under-delivered,” Minority Assembly Leader Gordon Hintz, D-Oshkosh, said in a statement. “This news is devastating for the taxpayers of Wisconsin.
Additionally, the Evers administration is encountering reports of "side deals" with the tech company that resulted in the plans changing.
Foxconn, the Evers administration and Wisconsin’s Economic Development Corporation all deny these reports.
WEDC Secretary and CEO Mark Hogan, a Walker appointee, defended the deal and Evers’ actions in a statement.
"I have been involved with the Foxconn project from day one and there never have been any side deals and the contract stands on its own," Hogan said. "In addition, there have been no attempts by either the company or the Evers or Walker administrations to renegotiate WEDC’s contract."
It is likely Foxconn will not receive all $4 billion of possible incentives on the table, according to Chinn. This is especially true since last Friday Woo admitted the company’s failure to meet their set hiring goal of 250 full-time employees in order to receive state tax credits, keeping them from seeking hiring incentives from the state.
Regardless, the company’s impact on the state is being felt, for better or worse.
