Foxconn Plan Approved By Governor

In spring of 2018, Taiwan-based electronics manufacturer Foxconn will break ground in Mount Pleasant in Racine County, and will be in full force by 2020. Governor Scott Walker and Foxconn Technology Group Chairman Terry Gou signed off on Nov. 10, marking the largest signed development in Wisconsin history.

House Speaker Paul Ryan said on signing day, “We want to make sure that the kids that are growing up in Wisconsin, stay in Wisconsin.” Gou added, “We look forward to being a part of the community and contributing to its economic transformation. We will do so while ensuring that the very things that attracted us to Wisconsin – its talented and hardworking workforce, long track record in advanced manufacturing, favorable quality of life and environment – are protected and nurtured.”

Foxconn is the world’s largest electronic maker and has factories planted across the mainland of China. It is known for making iPhones and other Apple devices, and it also manufactures for Sony Corp., Dell Inc. and BlackBerry Ltd. Foxconn has been the main source of investment in Japan’s state of Sharp Corp. and Toshiba Corp.’s lucrative memory chip business. The company was put on mainstream in 1974, where Gou started to make plastic knobs for black and white TVs. It then began to manufacture electrical connectors for IBM and Atari in the 1980s. Foxconn built its first factory in Shenzhen, China, near Hong Kong. It has boosted southern China as an area of manufacturing global electronics, and has over a million workers, mostly working in China.

The contract between Wisconsin and Foxconn includes state tax incentives by Wisconsin, and 3,000-13,000 jobs guaranteed with full benefits by Foxconn. There would be $1.5 billion income tax credits for job creation, $1.35 billion income tax credits for capital investments and up to $150 million in sales tax revenue. It would essentially be 25 years before taxpayers would see the full benefits of this $3 billion investment. Foxconn also stated that it will invest a hefty amount of money in the plant. Walker’s spokesman, Tom Evenson, told the Washington Post, “The company’s investment is $10 billion, which is $6.70 of private investment for every $1 of public funds.” Gou said he will pay out $500 million if Foxconn fails to uphold their end of the deal. The contract was signed between Gou and Walker after the Wisconsin state legislature approved of the deal. “This is a once-in-a-lifetime opportunity that brings high-tech manufacturing back to America, right here in Wisconsin,” Evenson beamed.

Once the company is up and going in Wisconsin, it will manufacture liquid display screens that are used by computers, television, aircraft systems and other products, according to Walker’s administration. "TV was invented in America," Gou said at a White House press conference. "Yet America does not have a single LCD factory to produce a complete 8K system. We are going to change that," he finished.

The plant would be 2,000 acres encompassed by Highway 11 on the north, I-94 on the west, Highway KR on the south and Highway H on the east. A two lane road divides into two 1,000 acres extending over 1.56 square miles. The northern section of the plant will be roughly 80 acres. To put it in perspective, the plant will be three times the size of the Pentagon.

While there have been majority support from the Republican side, Democrats have been opposed to this plan because they want Walker to fund other investments, including education and infrastructure. “With a budget that fails to restore school funding and improve local roads, now’s not the time to hand over $3 billion in cash payments to a foreign corporation,” Wisconsin Senate Democratic Leader Jennifer Shilling said in a statement. “Gov. Walker and Legislative Republicans are putting home-grown businesses at a competitive disadvantage while committing taxpayers to decades of economic costs and liabilities.”

Not only do Democrats oppose this plan, but Americans for Prosperity, the political organizing arm of Republicans Charles and David Koch, strongly dislike this investment. "As free market activists who staunchly oppose government tax incentives, we cannot support the expensive refundable tax credits in this package," the group said in a statement in early August. While there are many perspectives on the Foxconn-Wisconsin deal, citizens will be greatly affected by this through taxation, job creation and potential revenue gains. Through it all, there is great optimism that this deal will succeed here in Wisconsin.