Gov. Wants To Renegotiate Foxconn Deal, 13,000 Jobs 'Unlikely'

RACINE COUNTY, WI — Wisconsin Gov. Tony Evers says he is skeptical that Foxconn will keep its promise of creating 13,000 jobs in a promised $10 billion electronics manufacturing plant to be built in Racine County. Now he wants to re-do the state's $3 billion deal with the company.

“I think at this point in time that would be an unreal expectation when they’re downsizing the footprint of what they’re doing,” Evers told reporters at his office in Madison on Wednesday.

In speaking with reporters, the Democratic governor went on to say that he is interested in how to "figure out how a new set of parameters should be negotiated." The parameters he is speaking of are reference to a $3 billion incentive package that GOP lawmakers signed into law in November 2017.

News of Evers' intentions infuriated GOP lawmakers, who served as the state's top negotiators and deal-makers with Foxconn over the past two years.

“Since the election, I have been concerned that Governor Evers would try to undermine the state’s contract with Foxconn. Luckily, WEDC negotiated an ironclad contract with expectations from both sides," Speaker Robin Vos (R-Rochester) said. “As Foxconn works to create 13,000 jobs in Wisconsin, I’m open to hearing if any flexibility is needed to achieve that goal, which I hope is the intent of Governor Evers.”

Plan Alters

Even before the ink dried on the state's contract with Foxconn, company leaders touted their new Gen 10 ecosystem — a significant technological advancement over existing flat-screen technologies. Then in 2018, the company said they were scaling back their Wisconsin factory from Gen 10 down to Gen 6. Compared with a Gen 10 production facility, a Gen 6 facility makes smaller-sized LCD screens. If a Gen 10 plant produces 75-inch TV screens, a Gen 6 facility produces cell phone and tablet-sized screens.

One day after news broke that Foxconn would be changing plans for its $10 billion LCD screen manufacturing plant came a new report that the Taiwanese electronics manufacturer was suspending work in Racine County.

And then days after that, Racine County residents were whipsawed again, when the company announced they were building a Gen 6 facility after all.

"After productive discussions between the White House and the company, and after a personal conversation between President Donald J. Trump and Chairman Terry Gou, Foxconn is moving forward with our planned construction of a Gen 6 fab facility, which will be at the heart of the Wisconn Valley Science and Technology Park," company officials said.

GOP Calls Deal 'Solid'

The Foxconn deal, spearheaded by the GOP and approved in in Sept. 2017, puts the WEDC in the position as chief negotiator in the contract between the State of Wisconsin and Foxconn.

“The contract is simple. If Foxconn doesn’t perform to its obligations under its contract with the
state, Foxconn it doesn’t receive any incentives from the state. If Foxconn underperforms, it
leaves incentives on the table," State Sen. Van Wanggaard (R-Racine) said in a statement to Patch. “What job creator, what person, would come to a state that goes back on its promises? Evers should keep his campaign promises and respect the deal that was made.”

Nothing New

But news of Evers' intentions are nothing new. During the run-up to the 2018 Governor's race, Evers implied that Foxconn - and the resulting financial incentive package are here to stay, though he said there could be some wiggle room when it came to negotiations.

According to a Milwaukee Biz Times article, Evers said that he would look at renegotiating parts of the contract with Foxconn with an eye on fortifying the state's position on wages, Milwaukee-area hiring, public transportation and the plant's energy efficiency. He said he would do so by using local transportation projects as negotiating leverage against Foxconn.

"I would really focus on compelling them to be good corporate citizens," he said at the time. "I don't believe they want to be viewed as bad actors," he said. But shortly afterward, Evers ratcheted up his rhetoric in the Biz Times, indicating a much stronger stance than before.

"That's a lousy investment," Evers said in the Biz Times of Wisconsin's $2.85 billion incentive package that Walker's administration passed in November 2017. "Foxconn has already backtracked on several of its promises and is not being held accountable by Walker. When I'm governor, we'll hold Foxconn's feet to the fire and make sure that Wisconsin is getting the best return on investment possible."

Evers has also gone public with his intention to revise air pollution regulations around the plant. "I've had many scientists look at that approval process and they've found many flaws with that decision made by the Department of Natural Resources,"Evers told the Wisconsin State Journal during the campaign. "So I would take that information and the approval and say, 'How can we get from here to here?'"

GOP Blocks Evers From 'Screwing Deal Up'

Republicans responded by reaffirming their intention to limit Gov. Evers' powers when he assumed office in January 2019. During the last few weeks of former Gov. Scott Walker's tenure, control of the Wisconsin Economic Development Corporation — the state organization with primary oversight over the state's $3.3 billion contract with Foxconn — was shifted from the Governor's office to the State Legislature, which is firmly under GOP control for the foreseeable future. Under the bill, which passed on a party-line vote, Evers was blocked from being able to choose who leads the WEDC in addition to other taxpayer-funded incentive packages provided to businesses in exchange for job creation.

Evers had promised to disband the WEDC and replace with a state Commerce Department.

"We are not going to allow Tony Evers to come in and screw up the Foxconn package," Vos said in a Journal Times report. "I will never let that happen. It is too important to our region, it is too important to our state and I feel like we already, in good faith, negotiated and worked on this deal with one of the world's largest corporations, and just because we had an election, doesn't mean Wisconsin is going to break its word."