Jeramey Jannene
Eyes on Milwaukee

Foxconn Loves Wisconsin, Walker

Gou says governor is top reason Foxconn coming. Abele has county site in play.

By - Jul 27th, 2017 09:39 pm
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Foxconn chairman Terry Gou and Governor Scott Walker hold a memorandum of understanding. Photo by Jeramey Jannene.

Foxconn chairman Terry Gou and Governor Scott Walker hold a memorandum of understanding. Photo by Jeramey Jannene.

“We are ready for something like this like we’ve never been ready before.”

Those were the words of Governor Scott Walker shortly before he welcomed Foxconn chairman and founder Terry Gou to the podium at a contract signing ceremony held at the Milwaukee Art Museum this evening. Walker had just finished ticking off a stump speech-style list of changes his administration has helped push through, which according to the governor includes lowering the tax burden, reducing the regulatory burden, eliminating frivolous lawsuits and making it easier to train members of the workforce.

Walker, fresh off an event at the White House on Wednesday evening with President Donald Trump, Vice President Mike Pence, Speaker of the House Paul Ryan, Senator Ron Johnson and Gou, spoke at length touting the deal his administration has struck with Foxconn. If all goes according to plan, the deal, for which the final language still hasn’t been released, is expected to bring 13,000 direct jobs, 10,000 construction jobs and 22,000 indirect and induced jobs to the state in exchange for up-to $3 billion in tax credits according to the governor. Foxconn will invest $10 billion in a massive factory that will manufacture high resolution LCD screens.

The governor introduced Gou as “one of the most remarkable business leaders in the world.” A large compliment, but not near the one Gou was about to drop on the room packed with Milwaukee and Wisconsin movers and shakers.

Gou, who founded Foxconn in 1974 and now employs over 1 million people primarily in Asia, explained why his firm is choosing Wisconsin to open their first North American factory. One might have expected him to lead with tax breaks, available workforce or a massive supply of fresh water, but that wasn’t the case. Gou exclaimed “I’ve never seen this type of governor or leader yet in this world.”

Gou praised Walker for flying to Japan to tour a Foxconn facility even though it was on a weekend. He also told a story involving Walker not eating dessert at a meal in early July when Foxconn executives were in the state. Gou noted that he was told by Wisconsin Economic Development Corporation CEO Mark Hogan that Walker heads home to his wife Tonnette every night, where she prepares his favorite dessert. The first lady then made an appearance on stage to embrace her husband and wave to the crowd. Hard working and a family man.

The Foxconn chairman declared “this is our home, my home, Wisconsin” before explaining that the east coast is the financial hub of the country and the west coast is the software hub of the country. Gou noted that these are like wings, and the project — named “flying eagle”– and America both need muscle to help them fly. He views Wisconsin as that muscle.

The deal is a major coup for Walker, who now appears to be a shoo-in for re-election in the fall of 2018. If the election gets anywhere near close Walker can just run the footage of Gou praising him on a loop.

Walker and Gou weren’t the only individuals speaking at the podium at the ceremony. We Energies CEO Gale Klappa, who chairs the M7 initiative, emceed the event. Mayor Tom Barrett welcomed Foxconn to Wisconsin and “the fresh coast.”

Following the speeches, Walker and Gou signed a memorandum-of-understanding outlining the deal between Wisconsin and Foxconn. The legislature still must approve the deal.

Foxconn also signed memorandums-of-understanding with Rockwell Automation (signed by CEO Blake Moret) and the Ginseng Board of Wisconsin.

Ginseng, popularly consumed in China, is grown en masse in Wisconsin. Walker joked earlier in his speech that Gou was excited at the notion of doubling Wisconsin’s ginseng production, and Gou noted he has high-tech ideas to do so in his speech. The board gave Gou a 70-year-old ginseng root regarded as one of the rarest they have ever seen.

Milwaukee County Assembly Site

Milwaukee, along with being a great place to throw the welcoming party, may also be part of the deal, it seems. Milwaukee County Executive Chris Abele told Urban Milwaukee that the electronics giant is looking for a second site that comes with easy access to General Mitchell International Airport. While the massive factory they’re expected to build would require a far larger site, Foxconn is reportedly looking for an approximately 250-acre site for assembly work. When asked for available sites, Abele notes he showed Foxconn a site with direct airport access, the former 440th National Air Wing site. Some land acquisition is likely required to make that site work, but Milwaukee County has an outside chance of landing at least a portion of the company’s Wisconsin investment.

A single source close to the project also notes that Corning Inc., a manufacturer of glass, ceramics and related materials, is looking for space in Wisconsin for a factory that could measure up to 1 million square-feet. Corning is a major supplier to the electronics industry.

What Do We Know About The Project?

Despite intense media coverage over the past couple of weeks, specific details regarding the deal are still hard to come by. According to a memorandum of understanding signed at the ceremony, the company will invest $10 billion to develop a 20 million square-foot factory to manufacture 8K LCD screens. Those screens will be used not only for televisions, but for healthcare equipment, automotive displays and aviation equipment.

Governor Walker has compared the size of the factory to 11 Lambeau Fields, but Milwaukeeans might be more comfortable with a reference to 20 US Bank Center or Northwestern Mutual towers. Either way it’s big.

Where that massive factory will be built is still unclear, but there is a substantial amount of chatter regarding a roughly 1,000-acre site just northeast of the intersection of Highway 11 and Interstate 94 in Racine County. For those wondering why Milwaukee can’t land Foxconn’s main factory, the entire Menomonee Valley is approximately 1,200 acres. It just won’t fit in Milwaukee.

In exchange for making that massive investment Wisconsin will award Foxconn up to $3 billion in state income tax credits and waive sales tax requirements on building materials. According to statements made by the governor, Wisconsin will only award the credits for hiring and investment that Foxconn actually executes. No jobs, no tax credits. The state also would be able to reportedly clawback tax credits should the firm violate terms of the deal; however, the WEDC under Governor Walker has had a checkered history of doing so.

The agreement stipulates that the company would initially employ 3,000 workers making an average of $53,900-a-year plus benefits. The average figure will be an important one to watch, as a document given to Urban Milwaukee by a top academic notes that the company is expected to have 20 percent of their workforce in engineering positions. Those positions would certainly drive up the average salary substantially.

The legislature is expected to convene into a special session to approve the deal. Today’s event featured attendees from both sides of the aisle including Speaker Robin Vos (R-Rochester), Minority Leader Peter Barca (D-Kenosha), Rep. Cory Mason (D-Racine), Rep. Leah Vukmir (R-Brookfield), Rep. Samantha Kerkman (R-Salem), Sen. Van Wanggaard (R-Racine), Sen. Duey Stroebel (R-Saukville) and others. With the deal being negotiated by only Walker, Hogan and Department of Administration Secretary Scott Neitzel, the legislature is likely as interested as the public in getting their hands on the actual legislation.

Not discussed publicly yet is the substantial amount of other subsidies the company is likely to receive. While a final location will drive those costs, local municipalities and the state education system are going to need to do heavy lifting around transportation funding, infrastructure investment and workforce training.

Wisconsin D.C.

Not lost in all of the hype around Foxconn coming to Wisconsin are the litany of players involved in Washington D.C. that have Wisconsin ties. Wisconsin native Reince Priebus serves as chief of staff to the president and has been credited with suggesting Wisconsin as a potential site for Foxconn. Walker also credited Wisconsin Congressman and Janesville resident Paul Ryan for lobbying for the deal.

The federal government is not providing any incentives to complete the deal. President Trump, in a meandering speech Wednesday night that included thanking casino magnate Steve Wynn for raising money for the Republican party, gave himself credit for the deal. Trump noted “In other words, if I didn’t get elected, he definitely would not be spending $10 billion.”

More about the Foxconn Facility

23 thoughts on “Eyes on Milwaukee: Foxconn Loves Wisconsin, Walker”

  1. Dave Knutson says:

    So, it would seem appropriate that Foxconn might honor Wisconsin’s substantial subsidy of the manufacturing plant by putting their name on the new Bucks stadium…one hand washes the other….

  2. Duane Snyder says:

    All the praise Mr. Gooey was heaping on Walker reminds me of a South Park episode. The sly Japanese executives were very quick at making self deprecating remarks about their “manhood” while praising the size of the typical American “manhood” profusely.

    We can’t possibly stop US firms from outsourcing because you know, free markets. Yet billions in taxpayer money can be given to a foreign firm to (supposedly) build a factory here. The article implies that this virtually guarantees Walker’s re-election. If you were looking at it from Gooey’s Foxconn perspective wouldn’t you want to influence American politics by doing your part to support the free market ideology that diminishes American power in the world while increasing you own? If this is how Trump will get tough on trade and bring back jobs to America it’s just another example of what a world class liar, and typical Republican he is.

  3. Vincent Hanna says:

    While the Journal Sentinel gushes and cheers without any skepticism whatsoever, reality:

    The New Wisconsin Foxconn Plant Will Probably Be Staffed By Robots—if It Ever Gets Built

    “But as Tim Cuplan at Bloomberg points out, $3 billion for 3,000 jobs means the state is paying $1 million per job. But let’s be generous and factor in the construction jobs that would go into building the plant, which the state estimates could total 16,000 jobs, and the long-term estimate of employing 13,000 people at the plant. Those 29,000 jobs would still cost more than $100,000 a person in state subsidies.

    But there’s an even bigger problem than recouping the state’s investment. Foxconn’s history and the future of manufacturing in general both suggest Wisconsinites shouldn’t bust out the six-pack just yet.

    For one, Foxconn has a track record of promising factories to cities in need of jobs and not coming through. It happened in 2013 in Harrisburg, Pennsylvania, when Foxconn promised a $30 million factory that would employ 500 workers. The announcement made headlines, adding to both Foxconn’s and the Pennsylvania politicians’ political capital, but it was never actually built, and there’s no sign it will ever happen. Very little was made of the deal’s quiet death. It also happened in Vietnam in 2007 and Indonesia in 2014.

    Even if a plant gets built, it could fall short of expectations. In 2011, Foxconn promised a plant in Brazil that was projected to create 1000,000 jobs. In 2015, the factory reported it employed roughly 3,000 people, and the company never explained why it fell short of its projections, according to Reuters.

    Last year, Foxconn boasted that it replaced 60,000 workers with robots at a single factory in China. The company even makes its own industrial robots, dubbed Foxbots, that work on its assembly lines. Foxconn was making about 10,000 Foxbots a year in 2015.”

    http://www.slate.com/blogs/future_tense/2017/07/27/the_wisconsin_foxconn_plant_will_be_staff_by_robots.html

  4. WashCoRepub says:

    Governor Walker is an absolute inspiration as to what hard work and persistence can accomplish, for the greater good. What a wonderful week to be a Wisconsinite!

  5. Duane Snyder says:

    So we can’t do anything to prevent the loss of millions of manufacturing jobs because of, you know, free trade. (And besides that manufacturing is a dying industry and all if it will be done with robots anyway so just keep flipping those burgers moron). And we don’t have money for roads, schools, or health care, we are broke because of job killing regulations and Obamacare. But we have billions of dollars for a foreign company, Foxconn, (that bastion of worker rights), headquartered in ‘lil China (aka Taiwan, cradle of democracy). American exceptional ism will always save us in the end anyway, we simply can’t lose. We are the greatest, so much winning I can’t stand it! Scott Walker wins in a landslide!!

  6. Rita says:

    Not one taxpayer dollar should go for this to make Apple products when Apple offshores hundreds of billions of dollars.they have not paid taxes on. Not one visa related job to set up or maintain this automated plant should count towards the number of “jobs” counted when it comes to credits and tax breaks. For any business. There should be a bill introduced on that. LEGISLATURE?. The claim is “Wisconsin jobs”, not bring in foreign workers who set up their automated factory in China and then leave to go on to the next one leaving a skeleton crew to run things. Wisconsin is being raised by Walker to a new level of corruption and environmental degradation. We need Walker out of office even more now, to fight corruption, pollution, and unfair practices and policies for workers and the people of this state.

  7. Adam says:

    “The deal is a major coup for Walker, who now appears to be a shoo-in for re-election in the fall of 2018.”

    Mmmhh. Maybe its good reverse psychology for a left leaning publication to talk like this as the last few elections were talk of how Walker could not possibly be re-elected.
    This certainly is a political victory for Walker, but look where the investments are going to be. Racine, Milwaukee and possibly Dane County. Not exactly Walker territory. Voters in west, north and Fox Valley, which utilmately sway the election one way or the other, will be asking themselves how this affects them directly and why the state is throwing a huge subsidy to a business in SE WI and not their area of the state. The state investment in the bucks arena did not play well out-state and well this is not necessarily analogous to that, out-state is likely to see little direct benefit from this development should it actually come to pass.

  8. Joel Ambelang says:

    Don’t count your chickens before they are hatched.

  9. AG says:

    There’s a healthy weariness/skepticism and then there are others who seem to be rooting for this to fail, just because they hate Walker. The former makes sense but the latter is part of what holds our state back. I wish we could see more coming together for potential big wins like this.

  10. emcd says:

    Republicans and conservatives are quick to boo the Bucks arena project but blindly cheer this one that could involve 3 BILLION dollars in subsidies and tax abatements to lure them here??? Where do you think the 3 billion will come from? Whose roads, schools and local projects will be sacrificed for this photo op and re-election boondoggle? Whose local and property taxes will need to go up to compensate for the loss of state tax revenue to city and county budgets?

    All this with plenty of evidence from other locations that Foxconn often doesn’t come through with promised facilities (example: an agreement announced four years ago to invest in Harrisburg, Pennsylvania, is still pending), and Foxconn is busily filling it’s existing factories with robots rather than humans.

  11. Adam says:

    @AG

    I’m not sure if you are referring to my previous comment or not. To clarify- I want to see this development move forward as advertised at it could be the spark SE WI desperately needs, but you are also correct that I do want Walker gone.
    It is time for a regime change. One party rule is not healthy for the state and after 8 years of GOP control, what is left for them to do? The DNR has already been gutted and the tax breaks have all been handed out to the wealthiest in our state. What really is there left for the GOP to run moving forward? Their entire platform election after election as far as I can see are to hand out tax breaks to rich people and gut environmental regulation. Done and done here in Wisco.
    It’s time to legalize and tax marijuana, properly fund and diversify the transportation sytsems, reform our prison system and a major push to both reinvest in and improve the PR of our education system from early childhood through secondary education.

  12. RMH says:

    @AG: “The former makes sense but the latter is part of what holds our state back”

    Really, that’s what’s holding WI back? Since I moved here in 2003 I’ve been amazed and sickened by the vitriol and constant mean-spirited sabotaging of this state’s urban areas, especially MKE, often expressed in remarkably clear racist rhetoric. The constant denigrating of public servants, especially teachers, by the Walker minions, talk radio and rural/suburban Republicans is especially appalling.

    This state is governed by a bunch of reactionary and corrupt hacks politically supported by fools who’ve wholesale swallowed decades of rightwing agitprop. I’d argue that what people who oppose corrupt deals like this want is for the corruption and corporate cronyism to end and for the Republican party to become a sane part of governance again.

  13. Eric J says:

    -Everyone is taking their parade lap now.
    -I will be much happier when someone is actually turning dirt for footings for this facility.
    -How does the U.S. manufacturing base suddenly look attractive again when competing with dollars per day employees in China ?
    -Manufacturing left for the advantage of low wages and greater corporate profit. What’s changed with this proposal???

  14. Jake formerly of the LP says:

    A “shop-in for re-election”? ARE YOU KIDDING? When the roads will be even worse, job growth still lousy and major budget deficits looming by this time next year?

    You need to turn off the corporate kiss-assets in MKE media and realize that most people see through this con man.

    This is like Bush strutting on the aircraft carrier on May 1, 2003 saying “Mission Accomplished”. I wasn’t suckered by it then, and I won’t be now. If this is such a good deal, why are they trying to ram it through so fast?

  15. Vincent Hanna says:

    AG we should also be leery of people who are vociferously cheerleading for this without acknowledging any reason to be skeptical or weary while acting like this is a win for the state no matter what the incentives are. They are demanding blind allegiance. That is dangerous, far more dangerous than people who are rightly skeptical. I don’t see anyone here actively hoping for this to be a failure because Walker.

  16. D says:

    I like how people always whine about ‘the Republicans hating cities’ despite Milwaukee and Madison, aside from ‘Escape from New York’ North Side, flourishing. And even there is some movement with Century City.

    The Republicans gift wrapped Milwaukee a huge development with the Bucks arena that would never have been built by anti-wealth, anti-business Democrats. And now Milwaukee gets a juggernaut job creator that will have long lasting impact on the city thanks to Walker and Trump. Even Talgo is back. NML built a huge complex and JCI might be investing in a new tower.

    So in short, stop being so salty and enjoy the ride.

  17. Vincent Hanna says:

    Democrats run Milwaukee D, the city and the county. If Democrats are so anti-wealth and anti-business, why is Talgo back? Why did NML build two huge new towers? Why is JCI considering a new tower? Your argument has some huge holes.

    One could say Madison and Milwaukee are doing well in spite of and not because of Republicans.

  18. Michael Schwister says:

    Nothing like a good dose of socialism to attract “free market” international industrial polluters to our “conservative” State. And we’ll get to socialize the clean-up after the “free market” creates a super fund site with the blessing of the anti socialist free market legislature. Of course the private profits will remain firmly in the hands of the of this corporation as we the taxpayer cough up millions for years to come. I wonder how many more jobs the taxpayers will be willing to finance?

  19. Rnprn says:

    WEDC, Walker math, pay $1 million for a job making $9.20 An hour! What could go wrong!

  20. JUDY koz says:

    If Barrett or Obama had made that deal….all you’d hear is praise from the Dem’s!!!

  21. Jake formerly of the LP says:

    Judy- WRONG! Try again, and not just because Dems would never sign off on such an obvious boondoggle than would hurt the state’s ability to keep investing in education and ability to provide health care to those most in need.

    I do know you would have hated it, just like your Sheep self didn’t like the Milwaukee-Madison-MSP train, despite it costing this state NOTHING.

    But see, we aren’t as lame as you Pom-Pom wavers. We actually have minds of our own. Deal with it.

  22. JUDY koz says:

    I think you’ve been watching too much FAKE news!

  23. Jake formerly of the LP says:

    Judy- I’ll take that as a “yes.”

    Say “Baaaaaa!”, and enjoy paying taxes to Taiwainese corporations.

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