After a week of headlines raising questions about Foxconn's plans for Wisconsin, Gov. Tony Evers said Friday he is comfortable with the technology company's commitment to the state.
"Frankly I think what they said recently has been relatively consistent, it’s just a matter of their communication strategy being more consistent," Evers told reporters in the state Capitol. "I’m comfortable that they’re still committed to the state, they’re still committed to this Generation 6 technology, but that doesn’t mean we won’t continue to encourage them to be more transparent and more consistent."
Shortly before Evers' comments, Foxconn Technology Group said in a statement that it will move forward with plans to construct a Generation 6 facility in southeastern Wisconsin. So-called Gen 6 factories generally produce small LCD screens for cell phones, tablets and small televisions.
Although Foxconn originally billed its planned Wisconsin facility as a Generation 10.5 LCD plant, the company has said since last year that it will instead start by building a smaller Gen 6 plant. Foxconn executive Louis Woo has said the company's southeastern Wisconsin campus will be built in a phased approach.
Evers said he and Woo spoke Friday morning and Woo reiterated the company's commitment to a Gen 6 plant.
In its statement, Foxconn credited "productive discussions between the White House and the company" and "a personal conversation between President Donald J. Trump and Chairman Terry Gou" with its decision to move forward with its Gen 6 plans.
Trump visited Mount Pleasant in June for the project's groundbreaking, calling it "the eighth wonder of the world."
"Our decision is also based on a recent comprehensive and systematic evaluation to help determine the best fit for our Wisconsin project among TFT technologies" (a kind of LCD screen), the statement said. "We have undertaken the evaluation while simultaneously seeking to broaden our investment across Wisconsin far beyond our original plans to ensure the company, our workforce, the local community, and the state of Wisconsin will be positioned for long-term success."
In a joint statement, Senate Majority Leader Scott Fitzgerald, R-Juneau, and Assembly Speaker Robin Vos, R-Rochester, thanked Trump for speaking with Gou.
"We want to thank President Trump for his commitment to Wisconsin workers — our state has an ally in the White House who is dedicated to helping us bring family-supporting careers to our state," Fitzgerald and Vos said. "We also want to thank Foxconn for reaffirming its commitment to the historic investment in Wisconsin. Southeast Wisconsin and the entire state will see an influx of manufacturing jobs and billions in investment that will impact Wisconsin for generations to come."
The confusion surrounding Foxconn's plans for Wisconsin started with a report on Wednesday published by Reuters. In an interview, Woo told Reuters the company was considering changing the focus of its facility in Mount Pleasant.
Woo told Reuters the company expected to hire mostly researchers and engineers rather than manufacturers, citing the high costs of building TV screens in the United States. He said about three-quarters of the jobs in Wisconsin would be in research and development and design.
The following day, the Nikkei Asian Review reported that Foxconn had put construction on its $10 billion Wisconsin plant on hold "as a result of negotiations" with Evers and because of "weakening macroeconomic conditions and the uncertainties brought by the trade war."
Both Foxconn and state officials denied that any attempts had been made to renegotiate the contract, which was approved by former Gov. Scott Walker.
Both Walker and Trump tweeted about the project on Friday.
"Foxconn continues to move forward in Wisconsin!" Walker tweeted.
Wisconsin's contract with Foxconn makes the company eligible for up to $3 billion in refundable state tax credits — the largest subsidy to a foreign company in U.S. history. The incentives are to be delivered on a "pay as you grow" basis tied to job creation and capital investment benchmarks. If the company fails to meet certain benchmarks, benefits may be clawed back.
The company announced earlier this month that in its first year in Wisconsin, it had created 178 direct, full-time jobs — short of the minimum 260 the company would have needed to create in order to qualify for its first round of tax credits from the state.
In exchange for state incentives, Foxconn pledged to invest $10 billion to build a massive LCD panel manufacturing plant in the southeastern Wisconsin village of Mount Pleasant, employing between 3,000 and 13,000 people. The company must bring a minimum of 6,500 jobs to the state to avoid having its incentives clawed back.
Construction on the facility is expected to take five years, with a 2022 completion date. Foxconn is eligible for up to $1.35 billion in credits tied to capital investments and job creation over a seven-year period, with a maximum of $193 million in credits per year. The company is also eligible for a sales and use tax exemption on building materials, supplies and equipment used for construction of the facility, amounting to about $139 million.
Foxconn is eligible for another $1.5 billion in tax credits tied solely to job creation, distributed over a 15-year period. Those credits can be earned on wages for employees earning between $30,000 and $100,000 per year. The company is required to pay an average annual salary of $53,875 in order to qualify for credits.
The company is required to employ a minimum number of people in each year of the deal in order to receive the jobs credits, starting at 260 in 2018. The minimum threshold increases each year until 2027, when it reaches 10,400. If, in any year, the company does not reach the minimum employment numbers, it will not receive the jobs credits.
In order to receive the maximum credits of $1.5 billion by 2032, the company must employee 13,000 people. If Foxconn were to only meet the minimum thresholds, it could earn up to $1.06 billion.
Asked Friday if he believes Foxconn will bring 13,000 jobs to Wisconsin, Evers said, "It's likely not going to be tomorrow, I'll tell you that."
Evers noted that the contract contains protections, but skepticism from the public is natural if Foxconn's messaging isn't consistent or transparent.
"Our goal as a state is to make sure we continue to monitor the progress and … make sure taxpayers are protected, the environment is protected and that there is as much transparency as possible in this process," Evers said.