Walker says Foxconn is state’s biggest incentive to draw company’s supply chain

Rockwell CEO Blake Moret greets Foxconn officials before signing a memorandum of understanding.

Gov. Scott Walker on Wednesday didn’t rule out the possibility of additional state incentives for Foxconn suppliers, but said “it’s pretty clear” many of them will need to be directly adjacent to the company’s campus or in close proximity to do business.

Rockwell CEO Blake Moret greets Foxconn officials before signing a memorandum of understanding.

“We presume the biggest incentive we’ll be providing is the fact that Foxconn will be there,” Walker said when asked if state incentives would be needed to get the company’s suppliers to set up operations in the state.

The governor spoke with reporters via conference call from South Korea as he continues a week long trade mission. The first half of the trip was spent in Japan, where Walker’s meetings included time with Foxconn leadership and suppliers.

“They’re very excited to try to figure out ways they can establish businesses in the state of Wisconsin to be a part of that supply chain,” Walker said.

The state Assembly is expected to vote Thursday on a bill setting up $3 billion in state incentives for Foxconn to build a 20 million-square-foot, $10 billion LCD panel campus in Wisconsin. The project, according to an Ernst and Young report commissioned by Foxconn, could lead to an estimated 11,453 jobs at suppliers to the company.

Taxes paid by the suppliers and their employees were projected to account for more than one-third of the state revenue to be generated by the Foxconn project. The revenue will help the state recover the costs of issuing $2.85 billion in refundable tax credits to Foxconn and any additional incentives could prolong the payback period.

“This whole series of suppliers that we met with will be overall a net gain to the state of Wisconsin because they’ll be coming in and investing and employing people,” the governor said.

Metropolitan Milwaukee Association of Commerce president Tim Sheehy has said Corning Inc. plans to build a $1 billion, 400-job glass manufacturing complex near Foxconn’s Wisconsin facility.

Milwaukee-based Rockwell Automation Inc. has also signed a memorandum of understanding to work together on the campus.

Walker said there has been strong interest in Foxconn and the state of Wisconsin during the first half of his trip.

“Amongst other things, it certainly had our desired effect of putting us on the map globally and having businesses pay much more attention,” he said. “That has opened the door towards a much greater level of interest than what we’ve seen in previous trade missions.”

He also said changes the state Senate made to the Foxconn bill were improvements. One of the Republican amendments approved Tuesday required the Wisconsin Economic Development Corp. to include job thresholds for awarding capital investment tax credits. The other adjusted the process for court challenges related to the project, but kept the automatic stay of an appealed circuit court ruling and provided an expedited briefing schedule.

“I think the changes that were made were good and further allow us to strengthen our hand in terms of making sure we only pay for growth,” Walker said. “The jobs we believe will not only materialize, I believe in the end Foxconn will exceed their goals when it comes to job creation.”

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Arthur Thomas
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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