Foxconn: ‘Willingness to invest should not be questioned’

Terry Gou and Scott Walker look up as the Milwaukee Art Museum's Calatrava wings open.

Foxconn Technology Group says it has demonstrated a willingness to make large investments that “should not be questioned” and the kind of incentives offered by Wisconsin are required to make the company’s planned $10 billion manufacturing campus economically viable.

Terry Gou and Scott Walker look up as the Milwaukee Art Museum’s Calatrava wings open.

“We have demonstrated our commitment to investing internationally through our significant investments in locations around the world so our willingness to invest should not be questioned,” the company said in a statement.

The statement came in response to a series of questions from BizTimes Milwaukee seeking the company’s response to issues raised during debate over legislation that offers the company up to $3 billion in incentives.

The Assembly Committee on Jobs and the Economy has an executive session scheduled for this afternoon on the bill. The Senate version of the bill has been referred to the budget-writing Joint Finance Committee, which could hold a hearing on Aug. 22.

With Republicans in control of state government, the incentive package was expected to pass easily. It has run into some opposition, however, and lawmakers in the Assembly had proposed adding language to encourage the hiring of Wisconsin residents and allocate $20 million to workforce training.

The increased debate over the legislation does not appear to have deterred the company at all, which said in its statement it would make a location announcement “in the very near future.”

“Our commitment to this project and the State of Wisconsin remains as strong today as it was the day we announced our plans to invest in this great state,” the statement said.

“We are committed to this project and to the State of Wisconsin and we are working with Governor Walker and his team to address all outstanding issues. We are making great progress in our discussions and in our project planning,” the statement added.

A Legislative Fiscal Bureau analysis found it would take 25 years for the project, which is expected to create 13,000 jobs with Foxconn and another 22,000 indirect or induced jobs, to generate enough tax revenue to cover the cost of the incentives.

The analysis did note the longer timeline made the estimate ‘highly speculative’ and it didn’t account for other benefits to the state economy beyond the project itself. The break-even point could also be pushed out farther if the company makes significant capital investments but doesn’t reach 13,000 jobs.

Long-term investment

Some lawmakers have raised concerns about whether the company will follow through on its investment, citing examples in Pennsylvania, Indonesia and other locations where Foxconn said it would make large investments that didn’t become reality.

Foxconn’s statement says the company is still interested in making investments in those locations but said governments in those areas have not been able to make the investments needed to make the project possible.

“All major projects by our company and many others are partnerships with the relevant governments and they require investments from both sides if they are to achieve the goals set by our company and by the governments in the locations where we seek to invest,” the statement said.

In particular, Foxconn said partnerships with government are needed for most large companies in its industry “because of the significant infrastructure requirements.”

“That infrastructure is generally not directed at supporting the needs of just our project, but also supports the projects of other companies in the large supply chain that is created around our investments and the other companies that are attracted by the catalytic role our investments play in most of the locations where we invest,” the statement said.

It went on to say that for the company “to make large investments, in any location, we need a government partner who is able to commit the levels of support needed to make them economically viable for our company and, in many cases, also for the many other companies whose investments are attracted by the technology manufacturing hub we establish in those locations.”

The company’s track record and the potential long-term investment by the state have led to some questions about Foxconn’s commitment to locating in the state. The company’s statement pointed to Foxconn’s reasons for choosing Wisconsin including “a talented, hardworking workforce and a long track record in advanced manufacturing” and “an ideal location as a logistics and marketing center for the region.”

“Our investment to build a state-of-the-art LCD panel manufacturing facility in the state will serve as the foundation for our commitment to create a robust 8K+5G ecosystem in the United Sates,” the statement said. “As the foundation for this ecosystem, our commitment by its very nature is long term.”

Environmental concerns

Foxconn also said it is “committing to comply with all environmental standards” in response to questions about the need for waivers or exemptions from certain state environmental permitting as part of the legislation.

The company said Wisconsin’s quality of life will play a big role its effort to recruit and retain the best workforce.

“Preserving the environment is essential to maintaining this competitive advantage for the state and we are committed, through all aspects of our project, to ensure that we will not only contribute to Wisconsin’s economic development, but that we will also play a role in protecting the environment that is so important to the success of our initiative.”

Foxconn’s statement did not address why the specific changes included in the legislation are needed, but it did say it would by implementing a number of measures at the Wisconsin campus including “environmentally friendly product design, carbon emission reduction, process management, energy efficiency and resource management, and supply chain management.”

Wisconsin Economic Development Corporation CEO Mark Hogan and Department of Administration Secretary Scott Neitzel discussed the Foxconn deal Sunday on “UpFront with Mike Gousha,” produced in partnership with WisPolitics.com, and broadcast on WISN-TV Channel 12, both media partners of BizTimes Milwaukee.

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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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