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Foxconn Makes It Official

Comments | Posted in News | By MacIverNews | Posted July 26, 2017 1:52 PM

MacIver News Service | July 26, 2017

By: Bill Osmulski

[Washington, D.C.] By Wednesday afternoon the news was no longer a surprise, but it was now official. Foxconn will build its new US plant in Wisconsin.

Foxconn announced its intentions to build a US factory back in January. Earlier this month, Assembly Speaker Robin Vos announced southeastern Wisconsin was in the running, and the sighting of a Foxconn jet at the Milwaukee airport fueled the rumors.

This Monday, Mark Belling broke the news that Foxconn would pick Wisconsin on his late afternoon radio show. Wednesday morning, Governor Walker tweeted out that he would be making a big announcement with President in the afternoon.

Governor Walker and Assembly Speaker Vos flew out to Washington DC for the official announcement with President Donald Trump and House Speaker Paul Ryan at the White House. The official memorandum of understanding between Foxconn and Wisconsin will be signed on Thursday.

"This is a once-in-a-century opportunity for our state and our country, and Wisconsin is ready," Governor Scott Walker said in a release. "We are calling this development 'Wisconn Valley,' because we believe this will have a transformational effect on Wisconsin, just as Silicon Valley transformed the San Francisco Bay Area. Foxconn plans to bring the future of high-tech manufacturing to America, and Wisconsin is going to lead the way. We are honored Foxconn chose Wisconsin, and I thank Terry Gou for all he has done to make this happen."

Foxconn is expected create 13,000 jobs with an average annual salary of $53,875 plus benefits. Foxconn has said it will invest $10 billion in the facility. New details released on Wednesday stated the facility will be 20 million square feet, making it one of the largest manufacturing campuses in the world. Foxconn plans to spend $5.7 billion for the construction, which will support 10,000 construction jobs and another 6,000 indirect jobs. Foxconn plans for the plant to be fully operational in 2020.

Foxconn is one of the largest electronics manufacturers in the world, supplying parts to well-known brands like Apple, Sony, and Nintendo. The Wisconsin factory will produce LCD screens for big screen TVs and possibly other devices. At Wednesday's press conference, Gou said the Wisconsin factory will be the first and only LCD factory in the US.

Foxconn decided to begin opening factories in the US in response to the recent slowdown of globalization. The company's president, Terry Gou, explained to investors last year that trade barriers are increasing as more countries focus on domestic economic development.

"In the future technology industry, we need to move closer to our customers and help them achieve faster time to market to create a win-win scenario," Gou wrote in Foxconn's 2016 annual report.

Wisconsin was completing with six other states for the Foxconn factory: Michigan, Illinois, Indiana, Ohio, Pennsylvania and Texas. Foxconn is a non-union company, which potentially gave Michigan, Indiana, Texas and Wisconsin an advantage since they all have right-to-work laws. Wisconsin Manufacturers and Commerce say reforms like that made the Foxconn deal possible.

"The transformative tax, regulatory and litigation reforms enacted over the past six years, like Act 10, the Manufacturers and Agricultural Production Tax Credit (MAC) and Right to Work, have fundamentally changed how the world views Wisconsin. Foxconn proves Wisconsin can play and win in the big leagues," Kurt Bauer, WMC CEO, said in a statement Wednesday.

There will be more legislation required to seal the deal. Some experts predict Wisconsin will have to provide anywhere from one to three billion dollars in incentives.

As of Wednesday morning, state lawmakers had not seen any details about what might be expected. Sources said that will come from the governor's office by the end of the week.

Senate Majority Leader Scott Fitzgerald's office wasn't able to say whether the legislature will address the incentives before, after, or with the budget bill.