WEDC Board Approves What Evers Says Is A $2.77 Billion Reduction In Foxconn's Incentive Package
The board of the Wisconsin Economic Development Corporation (WEDC) signed off Tuesday on the state's new financial incentive package with Foxconn.
Democratic Gov. Tony Evers announced that the renegotiated contract would provide the Taiwan-based firm $2.77 billion less in potential financial incentives than offered four years ago by Republican Gov. Scott Walker.
Evers says Foxconn can still earn up to $80 million in tax credits, if it meets employment and capital investment targets at its property in the Racine County village of Mount Pleasant. The goals include hiring nearly 1,500 people earning an average wage of about $54,000 per year and investing more than $650 million within five years.
In a press release, Foxconn says it's now positioned "to make Wisconsin one of the — if not the — largest manufacturer of data infrastructure hardware in the U.S."
But UW-Madison management professor Hart Posen says it's tough to know what the company means by that.
"I think it's sufficiently vague to be a lot of things related to hardware — like servers, storage system networking devices, data switches, but that term is very broad," he tells WUWM.
Posen says Foxconn is still an "incredibly good" company — the world's largest electronics manufacturer. But he says he was skeptical from the get-go of the firm's plan to build LCD display screens in Mount Pleasant due to the competitive nature of that product type.
Posen says when it comes to future efforts by governments to lure businesses to Wisconsin, a bidding war with other states, as was the case with Foxconn, should not be the roadmap. He says instead, try making the state's business environment more conducive to locating here and stress and improve the quality of the work force.
"If you look at Madison, right? Rapidly growing biotech sector. This is not because of massive government subsidies. It's because Madison has a lot of highly skilled labor," Posen says.
Republicans, including one who voted for the original Foxconn deal, are standing behind the company. State Sen. Van Wanggaard, of Racine, says Foxconn is "still a catalyst bringing other businesses to the area." He adds, "Under any definition, that's something to be excited about and look forward to."