Evers says Foxconn was first to suggest changing contract

Governor expecting company to submit changes in coming weeks

Louis Woo, special assistant to Foxconn chairman Terry Gou, visits a recruiting event at Marquette.

Last updated on July 2nd, 2019 at 09:11 pm

Gov. Tony Evers says Foxconn executive Louis Woo told him at a March meeting that the company planned to suggest changes to its contract with the Wisconsin Economic Development Corp., according to a letter released by Evers’ office on Tuesday.

The letter, dated April 23 and addressed from Evers to Woo, says that during a March conversation between the two men Woo indicated Foxconn would be suggesting changes to the contract “to better align the terms with the evolving project and global marketplace.”

Gov. Tony Evers

“To my knowledge, this was the first time either Foxconn or the State of Wisconsin had mentioned amending or changing the agreement approved in 2017,” Evers wrote, adding that he is “aware” Woo also provided a similar update to Assembly Speaker Robin Vos and Senate Majority Leader Scott Fitzgerald the same day.

Woo is special assistant to Foxconn chairman Terry Gou and has been the top company executive regularly involved in the project.

In a statement issued to the media Tuesday night, Foxconn said it, “has never wavered from our commitment to our contract with the State of Wisconsin and the creation of 13,000 jobs as part of our broader effort to make the Badger state a global technology hub. As part of our ongoing, long-term investment in Wisconsin, we have conducted both routine engagement and good faith discussions with the Evers Administration regarding areas of flexibility within the existing agreement to ensure the company and our workforce will be positioned for long-term success. Throughout these discussions, we have both operated within the existing contract framework and maintained our long-term workforce, salary, and investment commitments. As previously stated, we remain committed to continuing to work with Governor Evers and his team in a forthcoming and transparent manner, and remain open to further consultation, collaboration, and new ideas.”

Last week, Evers said he wanted to seek changes to the Foxconn contract to reflect the scaled down nature of the project. Vos and Fitzgerald have criticized those comments, arguing that Evers is trying to undermine the Foxconn project.

Foxconn issued a statement then indicating it is committed to the current contract, but also open to new ideas.

The company originally committed to creating 13,000 jobs and investing $10 billion in Wisconsin in exchange for $3 billion in state tax incentives. State and Foxconn officials eventually agreed to a contract that set aggressive timelines for the company to create jobs and invest in order to receive the full incentive.

Since the deal was struck, however, Foxconn has scaled back its plans, opting to build a smaller LCD manufacturing plant that provides more product flexibility instead of a larger one aimed at making the biggest display screens in the world.

The company also fell short of its job creation goals. The contract required at least 260 jobs to be created last year for Foxconn to receive any payroll tax incentives. The company created just 178 in 2018. It would need to reach 520 jobs this year and 1,820 jobs next year to receive any payroll incentives over the next two years.

Local officials in Racine County, where the Foxconn plant is being built, have said the company plans on hiring 1,500 employees for the first phase of manufacturing work, which is scheduled to begin production in the fourth quarter of next year.

Louis Woo

Changing the contract could potentially allow Foxconn to earn credits that it otherwise would not be eligible for.

“It is my understanding that Foxconn will be submitting the necessary documention for proposing changes to the WEDC agreement in the coming weeks,” Evers wrote to Woo. “As we have discussed with Foxconn representatives, the state is identifying areas we believe will enable greater flexibility and transparency as the project continues to evolve.

Evers also told Woo in the letter that “Wisconsinites have a keen interest in understanding how many jobs will be created for Wisconsin residents and the types and compensation levels of such jobs.”

“As those details become more clear about your initial phase of work, I look forward to receiving them so that we can all view this project with as much relevant information as possible,” Evers wrote.

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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