Foxconn Says It's Suspending Work Because Of Gov. Evers: Report

On Friday, Feb. 1, we updated this story: Foxconn Now Says "Yes" To LCD Factory In Racine County After Talking With Trump

RACINE COUNTY, WI -- One day after news broke that Foxconn would be changing plans for its $10 billion LCD screen manufacturing plant comes a new report that the Taiwanese electronics manufacturer is suspending work in Racine County.

According to the Nikkei Asian Review, "Foxconn's $10 billion investment in display production in the state of Wisconsin has been suspended and scaled back as a result of negotiations with new Gov. Tony Evers," according to documents Nikkei says they've obtained. Nikkei further reported that Foxconn plans to "only halt [the Wisconsin project] for further evaluation and discussion with the new governor."

It's no secret that Evers, a Democrat, had interest in approaching Foxconn to renegotiate aspects of the deal former Gov. Scott Walker, a Republican, helped to put in place before he left office.

According to a Thursday report in the Journal Times, the Evers camp denied both interest and intent to re-negotiate the rules on Foxconn. However, there have been multiple instances in which Evers took an aggressive posture when it came to looking at GOP-constructed deals with Foxconn while on the campaign trail.

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. "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?'"

No More LCDs Foxconn Says

A top Foxconn executive told reporters Wednesday that the Taiwanese electronics manufacturer may not end up making LCD screens in Mount Pleasant, throwing into question the $10 billion factory's future.

Louis Woo, special assistant to Foxconn Chief Executive Terry Gou, told Reuters that Foxconn is evaluating options for Wisconsin, but added that making advanced TV screens in the U.S. comes at a high cost to the company.

"In terms of TV, we have no place in the U.S.," he said in an interview with Reuters. "We can't compete. In Wisconsin we're not building a factory. You can't use a factory to view our Wisconsin investment," Woo said in the interview.

In the report, Woo told Reuters that the company's latest plan is to create a campus of research facilities along with packaging and assembly operations.

Racine County officials responded to the report later Wednesday, saying they've received reassurances from the company that Foxconn's commitment to generating 13,000 jobs is still on track

Village of Mount Pleasant President David DeGroot, Racine County Executive Jonathan Delagrave and Jenny Trick, Executive Director of the Racine County Economic Development Corporation issued the following statement, which says in part:

Contrary to what was reported by Reuters, Foxconn reiterated to us, today, its commitment to building an advanced manufacturing operation in Wisconsin, in addition to its commitment to create 13,000 jobs and invest $10 billion in Racine County. As Foxconn has previously shared, they are evaluating exactly which type of TFT technology will be manufactured in Wisconsin but are proceeding with construction on related manufacturing, assembly and research facilities on the site in 2019.

We understand that Foxconn must be nimble in responding to market changes to ensure the long-term success of their Wisconsin operations. We fully expect that Foxconn will meet its obligations to the State, County and Village.

Officials stated that both the local and state development agreements are legally binding, and include strong protections for taxpayers. The state agreement, they said Wednesday, was largely based on job creation, and ensures that Foxconn only receives state tax credits if it meets or exceeds its targeted hiring amounts in any given year.

The local development agreement stipulates that, if, for any reason, Foxconn's investment on the campus falls short, the company remains obligated to support a minimum valuation for the project of $1.4 billion, which will more than pay for all public improvements and development costs for the project.

War Of Words Ensues In Wisconsin

Wednesday morning, Wisconsin legislative Republicans made short work to blame incoming Democratic Gov. Tony Evers for the latest iteration of Foxconn's plans in Wisconsin. Democrats fired back, saying the deals former Gov. Walker made with Foxconn were not going to stand the test of time.

Assembly Speaker Robin Vos (R-Rochester) and Senate Majority Leader Scott Fitzgerald (R-Juneau) released the following statement on the Foxconn commitment to Wisconsin.

"We don't blame Foxconn for altering plans in an ever-changing technology business. It's also not surprising Foxconn would rethink building a manufacturing plant in Wisconsin under the Evers Administration. The company is reacting to the wave of economic uncertainty that the new governor has brought with his administration. Governor Evers has an anti-jobs agenda and pledged to do away with a successful business incentive for manufacturing and agriculture.

State Sen. Lena Taylor (D-Milwaukee) wasn't buying Vos' explanation for matters surrounding Foxconn's latest news: "To imply that a change in the Governor's office is justification for Foxconn's outright lies to the residents of this state, is ridiculous. It also doesn't fly, since again, Foxconn started reneging on aspects of the deal while Walker was still in office," she said in a statement Wednesday.

"Almost has soon as the ink dried on the Wisconsin deal, Foxconn started walking back their promises. Immediate reductions in screen sizes, hires, Chinese workers instead of Americans, plant operations, assembly workers, and on and on. The only thing that hasn't changed is that this has been a bad deal for Wisconsin since the start. At some point, Republican leadership needs to admit, plain and simple, they got played," Taylor added.

Patch File Photo by Scott Anderson