As Wisconsin entered its current era of divided government — with Democrats in control of the executive branch and Republicans in control of the Legislature — Senate Minority Leader Jennifer Shilling, D-La Crosse, described the two parties’ new relationship as an “arranged marriage.”
If Democrats and Republicans are stuck in an arranged marriage, Gov. Tony Evers and Foxconn are locked into an agreement that outlasted the relationship that willed it into existence.
The multibillion-dollar deal — agreed upon by former Gov. Scott Walker’s administration and the Taiwanese electronics giant — was left for Evers to monitor and enforce, although Walker was the one who had championed it while Democrats like Evers were skeptical.
It’s kind of like starting a new relationship and finding out that your significant other invested in a business with their previous partner — and the business is just getting off the ground. You might hate the deal — and the fact that it was your significant other’s ex, and not you, who negotiated the terms — but you can’t hope for it to fail without hoping for your significant other’s investment to fail. Wisconsin is, of course, the significant other in this scenario, and really, you couldn’t ask for a better one.
Evers told reporters this week that he wants to renegotiate Wisconsin’s contract with Foxconn, arguing that it’s “unrealistic” to expect the company to fulfill its initial promise to create 13,000 jobs.
This comes after months of confusion swirling around just what, exactly, Foxconn plans to do in the Badger State.
Under the terms of Wisconsin’s contract with Foxconn, the company is 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 won't be paid out or may be clawed back.
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.
Although Foxconn originally billed its planned Wisconsin facility as a Generation 10.5 liquid crystal display (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.
Foxconn has repeatedly said it remains committed to working with Evers and to meeting the terms of the deal.
Evers’ comments were met with immediate criticism from the Legislature’s Republican leaders.
Senate Majority Leader Scott Fitzgerald, R-Juneau, said a move to renegotiate the Foxconn contract would create uncertainty and likely deter other businesses from coming to Wisconsin.
“This completes the original narrative that the governor has wanted to undermine the Wisconsin Economic Development Corporation from day one,” Fitzgerald said in a statement.
Assembly Speaker Robin Vos, R-Rochester, said during an appearance on WISN-AM radio that renegotiating the contract could only make the deal worse for Wisconsin.
“It is beyond my level of understanding to think that a governor of Wisconsin is basically rooting for the failure of the largest economic development in our state’s history,” Vos said.
Evers flatly rejected that characterization during an interview on WKOW-TV’s “Capital City Sunday,” accusing Republicans of “huffing and puffing” on the issue.
The governor said his comments weren’t an announcement of anything new; rather, they echo conversations his administration has had with WEDC and Foxconn “over time.” Evers said he’s following Foxconn’s lead on its business plan.
Evers’ priorities, he said, are to ensure taxpayers are protected and environmental standards are upheld, and to help make the project as successful as it can be.
“We are working directly with Foxconn on this,” Evers said on the show. “This isn’t the Evers imposition of Foxconn, this is Foxconn, WEDC and the Evers administration looking at what’s best for that company and for the state of Wisconsin. So to try to pit me against Foxconn, that’s ridiculous, because there is no pitting to be had.”
The governor’s attitude is encouraging. Regardless of whether he would have chosen to strike the deal, it’s now up to him — and Foxconn, of course — to make it a success.
And the fact is, things have changed since the contract was signed. Not only does Wisconsin have a new governor, but Foxconn itself has changed its stated business plans. Why shouldn’t both parties sit down together and discuss whether there are changes that can be made to acknowledge these new realities and make the project as successful as it possibly can be?
Vos and Fitzgerald are right, of course, that Evers shouldn’t unilaterally pledge to change the terms of the agreement. But so far, that’s not what’s happening.
As in any relationship, communication is key. If we take both Foxconn and Evers at their words, they are maintaining a regular line of communication. In a statement released last week, Foxconn said the company is “open to further consultation, collaboration and new ideas” with the Evers administration. This bodes well for future developments — and potential renegotiations.
Foxconn’s priority is to succeed in its business efforts and turn a profit. The priority of Wisconsin’s governor is to protect and advance the interests of the state and its residents. Under the previous administration, Foxconn and the state of Wisconsin saw an opportunity to partner with each other to advance each party’s priorities. Those goals can still be achieved, and further discussion, collaboration — and yes, maybe negotiations — can help make them more attainable.
Jessie Opoien is opinion editor of The Capital Times. firstname.lastname@example.org and @jessieopie.
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