Foxconn Technology Group will have six years to create 13,000 jobs with an average salary of $53,875, according to the terms of a memorandum of understanding that Gov. Scott Walker and Foxconn chairman Terry Gou signed Thursday in Milwaukee.
The initial agreement gives the two sides until Sept. 30 to finalize terms of a “mutually-beneficial agreement.”
The company is expected to complete the first phase of its LCD manufacturing plant within four years and a second phase within two years after that. In return, the state will be providing up to $3 billion in tax incentives, including $1.5 billion for job creation, $1.35 billion for capital investment and $150 million in the form of a sales tax holiday.
The memorandum also commits the state to establishing an electronics and information technology manufacturing zone that would last for 15 years.
Other legislative changes as part of the deal include expanding tax incremental financing limits beyond 12 percent of a community’s assessed cap and “allowing the affected municipalities to use TIF in innovative ways to facilitate the development through reimbursements for infrastructure directly related to Flying Eagle and company expenditures incurred to build FAB 818.”
Flying Eagle is the code name the company gave to its plans for a U.S. LCD plant and FAB 818 is the initial project planned in Wisconsin.
The state is also expected to work with local and regional economic development authorities to secure land for the company.
Assembly Speaker Robin Vos, R-Rochester, said he expects a Foxconn incentive package bill to be introduced to the Legislature within the next several days. He said it would go through the traditional committee process and hopes to have it on the floor of the Assembly by mid-August.
While legislative details and an exact site for the facility remain to be worked out, Foxconn officials joined with state, local and business leaders Thursday at the Milwaukee Art Museum for an event to mark the signing of the memorandum.
Any questions about why the art museum was chosen were answered when Walker and Gou held up a state flag present at negotiations in Japan and in the state capitol as the museum’s Calatrava wings were opened up as a symbol meant to correspond to the Flying Eagle code name.
Gou explained the two coasts of the United States represent the country’s wings with the West Coast dominated by Internet technologies and the East Coast by financial firms. The center of the country represents the heart and the muscle, he said.
“An eagle cannot fly without muscle,” Gou said.
The memorandum of understanding says the project is intended to reinvigorate American electronics manufacturing and improve the balance of trade. Gou said the company was drawn to Wisconsin’s industrial foundation, but added the company also toured facilities like Rockwell Automation, GE Healthcare and the new Milwaukee Bucks arena.
Gou praised Walker for his hard work trying to land the company and said it was a major factor in the company choosing Wisconsin.
“I’ve never seen this kind of governor or leader yet in this world,” Gou said.
Walker, speaking before Gou, said he was impressed with the chairman when he visited him in Japan, noting foreign trips usually involve a little down time before tours and talks begin. With Foxconn, he said Gou met them at the airport and they went straight to company facilities.
“I was blown away, not just with the operation but with the technology,” Walker said.
The governor acknowledged the project, and the planned incentives, are unlike anything the state has seen.
“It’s big, it’s bigger than anything we’ve done before,” Walker said. “This is something that will say to the world ‘we have arrived.’”
