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Foxconn North American Headquarters

Gov. Scott Walker, right, applauds Foxconn's decision to locate in Wisconsin, but taxpayers should beware, given the enormous size of state subsidies to the foreign company.

When Foxconn announced Wisconsin would be the location for its state-of-the-art LCD screen manufacturing facility, questions surrounded the project. How much would it cost? What were the risks? What kind of investment were we asking Wisconsin taxpayers to make?

As details came out about the enormous cost of the project, we learned that under the best case scenario, Wisconsin would not break even on its investment until 2043. With $4.5 billion in public costs, including the largest tax subsidy by a state to a foreign corporation in our country’s history, this price tag seemed too steep. And risky.

Was it a good idea for Wisconsin to gamble billions in state tax dollars on LCD screen production? Would there be demand for this technology in 5, 10, or 25 years?

Time and time again, we were told Foxconn would be spending $10 billion on the construction of a Generation 10.5 large panel manufacturing facility and that it would be hiring 13,000 workers when this facility was completed. The economic analysis from the Wisconsin Economic Development Corp. used numbers based on the construction and operation of this specific facility. That was the proposal agreed to by the governor in July 2017. That is what the Legislature voted on in September 2017. And that is what the contract was based on when it was approved in November 2017.

But that is not the project that is happening anymore.

After initially denying reports in May about changes to the scope of the project, Foxconn has now confirmed it will instead be constructing a smaller screen Generation 6 plant, not a Generation 10.5 plant as originally planned.

Yet Foxconn and Gov. Scott Walker continue to say they plan to create 13,000 jobs and invest $10 billion in Wisconsin.

The problem is the facility Foxconn is now building only requires a $2 billion to $3 billion investment and does not require a local supply chain, according to industry experts. Smaller screens don’t just mean a different project scope, they mean fewer jobs than the number promised when the state incentive package was passed.

The change in Foxconn’s plans comes “as global panel makers face a glut of TV displays that likely will last for years,” according to the Nikkei Asian Review, a 140-year-old publication that covers Asian economics, industries and markets.

So just nine months later, the questions Foxconn skeptics asked last August about future demand for large LCD panels were answered. Wisconsin is now facing a 25-year payback for taxpayers, and an oversupply issue with the LCD screens we’re counting on to make our state investment worthwhile.

In hindsight, maybe we should have considered what former Corning Glass chief technology officer Peter Bocko predicted in 2014. He described the future of the LCD platform as “a 25 year suicide pact for display manufacturers characterized by hyper-competition, over investment, periodic non-profitability but requiring sustained investment for product differentiation with poor return.”

A deal of this magnitude, one involving handing billions of dollars in state taxpayer money to a privately owned company, requires transparency and accountability. Yet neither Foxconn nor the Walker administration have been straightforward about this ever-changing project.

The project awarded to Wisconsin, approved by the Legislature and signed into contract by WEDC has fundamentally changed in ways that impact the project cost, investment, employment and tax subsidy. Yet very little has been shared with the public about the impacts of these changes. And despite the repeated pledges by Foxconn to create 13,000 jobs in Wisconsin, last week the chairman of Foxconn, Terry Gou, said the company plans to replace 80 percent of workers with robots in the next 5 to 10 years. What will this mean for the workforce demands at Foxconn moving forward?

With Gov. Walker welcoming President Trump and Terry Gou to Wisconsin for the official groundbreaking ceremony last week, it is important for us to continue holding our leaders accountable by asking important questions about the future of the Foxconn project.

Hintz, D-Oshkosh, is state Assembly minority leader, representing the 54th Assembly District: Rep.Hintz@legis.wisconsin.gov.

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