RACINE — Sitting side by side at SC Johnson’s Fortaleza Hall on Friday, Foxconn Technology Group Chairman/CEO Terry Gou and Gov. Scott Walker signed a contract that will likely forever change Racine County, southeastern Wisconsin and the state.
Gou and Walker signed the state’s $2.85 billion Foxconn incentives contract with House Speaker Paul Ryan, SCJ Chairman and CEO Fisk Johnson and about 400 others watching at the company’s world headquarters campus. The audience included at least about two dozen Foxconn employees and executives.
The contract signed Friday spells out the tax credits Foxconn will receive if it follows through with plans for an approximately $10 billion manufacturing plant in Mount Pleasant to build liquid crystal display panels and finished products. On Wednesday, the Wisconsin Economic Development Corp. board approved the contract with Taiwan-based Foxconn, the world’s largest contract manufacturer of electronics.
Foxconn hopes to employ up to 13,000 people at the manufacturing campus which was expected to total 20 million square feet, according to previous figures given. However, Friday Foxconn upped that to an astounding 32 million feet, the size of 15 Lambeau fields.
That campus will have much more than LCD manufacturing. There also will be a tool-and-die plant, an assembly plant and a packaging plant.
The construction of the Foxconn campus alone is projected to create about 10,000 construction jobs.
The company’s chosen area, where acquisition specialists have been negotiating purchase agreements with property owners, is on 1,198 acres between Interstate 94 and Highway H and between Highway KR and Braun Road.
Referring to SCJ, the host of Friday’s event, and Foxconn, Walker said: “What a concept: We’ve got a global powerhouse on either end of the county.”
“We’re going to take the world over when it comes to high technology,” Walker said.
He said Foxconn is expected to do an estimated $1.4 billion in business per year with Wisconsin companies — quadruple the volume that Oshkosh Corp. does.
Immediately after Gou and Walker signed the contract, the governor presented Gou with a Wisconsin license plate that reads “FOXCONN.”
Show and tell
Gou took to the podium to a lengthy standing ovation wearing a white Wisconn Valley cap, a cap that was in abundant supply after the signing event. His first words were: “It is great to be home.”
Gou did less talking than showing, with videos about what Foxconn plans to do in Mount Pleasant and what it can do in general.
A representative for Gou said the campus will be producing 6,955,200 displays per year, enough panels to cover one-third of the City of Milwaukee.
He also said Foxconn will be building 2,362 pieces of equipment weighing 70,000 tons in total, the weight of an aircraft carrier.
A short video followed those statistics, showing a rapid time-lapse representation of the construction of the proposed Foxconn campus.
Other videos followed, showing what Foxconn technology can do and how it can bring improvements and solve problems across many industrial sectors.
Through speakers and videos Foxconn officials said, for example, that for the security sector it can produce high-precision surveillance cameras and facial recognition technology that can greatly improve identification of criminal suspects — or help locate a missing child at an amusement park.
For the health care field, Foxconn showed how it can help doctors in endoscopic surgery with crystal-clear images so they can cut and remove just cancerous tissue while leaving healthy tissue alone. It can also provide the technology for remote doctor consultations as well as for digital microscopes.
Gou said the campus “will enrich people’s lives.”
Another video gave a glimpse into what Foxconn’s manufacturing floor will look like, with “self-organizing, intelligent manufacturing.” The complex will also include an experimental and training center.
“We are working closely with many regional partners and manufacturers,” Gou said.
Ryan noted that Johnson and his family have been “providing generations of really good-paying jobs right here in southeastern Wisconsin. And we are now about to kick off a whole new chapter, with a new, iconic employer, doing the same for the people here in southeastern Wisconsin.”
“You ever heard of this term ‘brain drain?’ ” Ryan said. “This reverses brain drain.”
And Ryan lavished praise on Gou by saying, “’Visionary’ doesn’t even skim the surface with this man.” He said that Gou started his company in 1974 with $7,500; it now employs about 1 million people around the world.
Reed Cordish, assistant to the president for intragovernmental and technology initiatives, represented the White House and President Donald Trump, who is traveling in Asia.
“This is about returning our manufacturing strength to where it should be,” Cordish said about the Foxconn development and called Gou “truly one of the world’s great entrepreneurs.”
The incentives contract
Under the terms of the contract, released publicly for the first time Wednesday, the company will be able to collect up to $1.35 billion in construction-related tax credits if it creates a gradually increasing number of manufacturing jobs, up to 8,450 through 2025.
Foxconn also will be able to collect up to $1.5 billion in tax credits if it creates up to 13,000 manufacturing jobs by 2022 and maintains that number through 2032. The jobs must pay at least $30,000 per year and average $53,875 annually.
Gou is pledging to personally back 25 percent of the amount that would be refunded to the state should the company default. Publicly traded parent company Hon Hai Precision Products would back the rest.
Though Walker and Gou agreed previously on a $10 billion investment by Foxconn, the contract only requires the company to invest $9 billion in the state to be eligible for tax credits.