Steven Walters
The State of Politics

Mr. Gou – Your Turn

An open letter to the chairman of Foxconn.

By - Sep 18th, 2017 08:15 am
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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.

To: Terry T.M.Gou, Chairman  – Foxconn

Jiǔwéndàmíng. [Translation: I have heard much about you.]

Starting with $7,500 and a few workers in 1974, you built one of the largest electronics design and high-tech manufacturing companies in the world. Its 2015 revenues were $136 billion. You control your companies from Taiwan, where your parents moved from China in 1949.

You are poised to become Gov. Scott Walker’s partner in either turning southeast Wisconsin into a Midwest Silicon Valley, or Wisconsin’s version of mythical con man Harold Hill, who had residents of an Iowa hamlet donate money for a town band. It was a Broadway play and movie, Music Man.

On July 26-27, you joined President Donald Trump and Walker in White House and Wisconsin announcements of Foxconn’s plans for a huge LCD manufacturing campus in Wisconsin.

Now, Wisconsin’s Legislature and governor have taken the first giant step to live up their end of the deal.

The Legislature passed, and the governor will soon sign into law, the largest financial incentive package any state government has ever offered a private company, let alone a foreign-owned company:

Up to $2.85 billion in tax credits over the next 15 years if – and it’s a big if – Foxconn invests $10 billion in the state, and hires up to 13,000 workers in Wisconsin. State officials say your new plant would require 1,000 acres, have a floor space of 20 million square feet (“11 Lambeau Fields,” “three times the size of the Pentagon”), require 10,000 construction workers and create 6,000 indirect jobs.

Those numbers are so big Wisconsin residents have trouble grasping them.

One example: The state Department of Revenue says all Wisconsin manufacturing property is valued at $14.3 billion. A $10 billion plant would – with just one investment –  boost the value of manufacturing property statewide by 69%.

Champions of the deal say it requires an exciting vision of Wisconsin’s manufacturing’s future.

“Foxconn is committing to create an entirely new industry here – an industry that simply does not exist in the U.S. today,” said Tim Sheehy, president of the Metropolitan Milwaukee chamber of Commerce. “Wisconsin would stand at the epicenter of the evolving digital world.”

But, Mr. Gou, one statewide poll suggested that more than one-third of Wisconsin residents either don’t trust you to live up to your end of the deal or think you are being offered too much of their tax money.

There are several reasons for their doubts.

First, no company executive has stepped forward to be the Wisconsin face of Foxconn. That person would take questions from legislators, offer follow-up assurances and construction and hiring timetables, and explain why some past Foxconn development promises – in Pennsylvania and in foreign countries– have been broken.

Second, Wisconsinites don’t know where the Foxconn campus exactly would be located. Although signs increasingly point to Racine County, having a definite site would be one more sign that Foxconn is serious about its end of the deal.

Third, there are no fine-print details of the final development pact for Wisconsin taxpayers, and reporters, to review. Mark Hogan, CEO of the state’s economic development agency, the Wisconsin Economic Development Corporation, said his agency is negotiating that contract. But it won’t be available before Walker signs the bill authorizing the incentives.

Opponents say just two documents – a handwritten agreement signed by you and Walker and a three-page memorandum of understanding – shouldn’t be the basis of a development package of this size .

Fourth, there is a fear that the Foxconn deal was rushed through the Capitol. The biggest incentives – a “subsidy” and “giveaway,”  according to Democrats who voted against the deal – for a private company in U.S. history was announced on July 26, and cleared the Legislature seven weeks later.

It took more than seven months – between Feb. 8 and mid-September – for Republicans to work out a state budget, which will spend $76 billion through mid-2019.

Democrats said they didn’t have enough details to mortgage state government’s future with $2.85 billion in tax breaks.

“Do you buy a house by shaking someone’s hand? Do you go to car dealership and say, ‘I’d like to buy a car,’ and shake hands?” said Democratic Sen. Tim Carpenter, of Milwaukee. “That’s what we’re doing here.”

Thank you for your time, Mr. Gou.

Zăi huai. [Goodbye.]

Steven Walters is a senior producer for the nonprofit public affairs channel WisconsinEye. Contact him at stevenscwalters@gmail.com

More about the Foxconn Facility

13 thoughts on “The State of Politics: Mr. Gou – Your Turn”

  1. Dumbledore says:

    One of the unspoken concerns with FoxConn is whether state and local government will consider this to be an investment that is too big to be allowed to fail. When there is a technology change for LCD panels in 8 years, will FoxConn request additional public funds to retool the factory and “protect” any of the existing jobs? If there is some type of energy price spike in 12 years, will FoxConn request public funds to retool its utility infrastructure? And will the state give in because FoxConn and the state’s initial investment will be too big to fail?

  2. SteveM says:

    There is currently one Wisconsin face connected to this deal…one “go to” guy…Scott Walker, with the backroom machinations conducted by Donald Trump.

  3. Adam says:

    @ Dumbledore and SteveM

    Both comments are spot on.

    Dumbledore- It is guaranteed Foxconn will be blackmailing the good citizens of WI far into the future should this boondoggle ever get built.

    SteveM- This whole deal just reeks to high heaven. Us common folks can only imagine all the unethical money changing hands behind the scenes on this deal. Scott Walker, Donald Trump and Terry Gou- three shady peas in a pod.

  4. WashCoRepub says:

    Welcome to Wisconsin, Mr. Gou. We are so appreciative of your faith and commitment to our state, and to the bright future we are going to be building together. You found in our Governor a willing partner who truly ‘gets it,’ and now it will be up to the workforce and educators of Wisconsin to build a long-lasting partnership with your company. Let’s start the hard work together and move forward, showing the world what we can do!

  5. SteveM says:

    Wow, WCR, there’s so much that can be said about your open letter response. I implore one thing, though, please, please, please don’t delete this comment and be willing to defend it past the 2018 election.

  6. revtlee says:

    Cynical me asks “are those business cards printed yet, you know the ones that say Scott Walker, VP of Government Affairs?” oops sorry!

  7. Vincent Hanna says:

    Parse those words from WCR. Ground has not even been broken yet he is already declaring total victory for Walker and passing all responsibility to “the workforce and educators.” So if it all goes to shit they get the blame, not Walker or GOP legislators.

  8. Eric J says:

    This is a precedent in that Wisconsin government awards riches to a foreign manufacturer that it cannot extend to local business and is entirely unsustainable.

    -Will this be Walkers Indian gaming compact that Gov. Doyle was so reviled for ?? One that will haunt us in the near future.

  9. MKE kid says:

    Well, us Wisconsin residents just have to trust Honest Scott. Wisconsin’s economy has done so well with him, aina?

    Could we just set fire on the state now to save money?

  10. will says:

    Did you that Indiana’s foxcomm plant where half of the workers were illegal immigrants and fled when they got wind immigration control was coming and many of the other jobs are temp type jobs. Wisconsin tapers will be paying for housing on campus for the high paying Asian engineers jobs that will be brought to the Wisconsin plant. LCDS will be absolute in the near future. Not one GOP who sign this bill knows how much it will cost each taxpayer, is it around 3 thousand dollars per 5.8 million Wisconsinites? It will not be built after the dust settles and Walker and his cheerleaders will be proven it’s a big scam on the Wisconsin taxpaters.

  11. Screw off Walters you could not run “whorehouse in the Yukon at height of the Gold Rush”. Foxconn put Wisconsin on the World Map for jobs, good jobs, not McDonalds.

  12. old baldy says:

    wcd:

    Always the class guy. Insulting others rather than providing any valuable insight. Atleast you didn’t make any egregious spelling errors.

    BTW, Foxconn isn’t even committed to WI let alone hired anyone yet, so don’t make any silly claims about jobs. The only thing they put on the WI map is the location of who to bribe.

  13. Adam says:

    @Old Baldy-

    One quibble. Foxconn has actually made one WI hire. Scott Walker’s former campaign manger is their new state lobbyist. Nothing nefarious going on here folks. Our government is free of corruption!

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