Trump, coming for Foxconn, jabs at Harley
President’s visit for celebration tainted by reaction to trade policy
President Donald Trump is coming to Wisconsin to officiate at Thursday’s ceremonial groundbreaking for the massive Foxconn Technology Group project in Racine County — and to put his personal stamp on his vision of an American manufacturing revival.
And while he’s in one of the country’s pivotal battleground states, he’ll also raise some campaign cash for Republicans.
But the visit comes amid a swirl of controversy, as Trump has launched attacks against Milwaukeebased motorcycle manufacturer Harley-Davidson over its reaction to his trade policies.
“We control what we can control,” said Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce. “What Wisconsin can control
here is the ability to take a step forward in transforming our economy with an investment in one of the best digital technology players in the world.
“On the flip side, we’re very cognizant of our homegrown global leaders like Harley-Davidson. So we want to make sure that Harley can participate in a fair trade environment.”
Trump will almost certainly be the center of attention for the groundbreaking at Foxconn’s sprawling manufacturing complex the company is building in Mount Pleasant.
The $10 billion Foxconn project, aided by more than $4 billion in inducements from state and local governments, is both a big deal and a great gamble.
It’s a transaction that Trump championed and Republican Gov. Scott Walker forged in negotiations with the Taiwan-based manufacturer of flat-screen panels.
The promise is that 13,000 jobs paying an average of nearly $54,000 a year will be created and a new industry will take root in southeastern Wisconsin, powered by advanced manufacturing that both builds on the state’s heritage and moves it forward.
“Whatever word I would use would understate the impact of having the fourth largest technology company in the world make the largest foreign direct investment in our backyard,” said Sheehy, who was part of the team that helped lure Foxconn to Wisconsin.
Trump’s “America First” agenda has an economic component. It’s on display with his vow to return manufacturing to the country’s shores. But helping fuel that agenda is a protectionist zeal that threatens the global trade system, with Trump imposing tariffs on imported aluminium and steel.
He’ll likely label Foxconn a win, especially since he helped pave the way for the deal.
During Trump’s April 2017 visit to Kenosha, Foxconn CEO Terry Gou was part of the traveling party. And Walker first made Wisconsin’s pitch to Gou at a meeting held in Washington in the offices of Trump’s then-chief-of-staff, Reince Priebus, who is from the Kenosha area.
Harley blow-up
The emerging trade war already is producing some economic backlash. Harley-Davidson announced this week that it plans to move production of motorcycles bound for Europe to its offshore facilities to avoid retaliatory tariffs imposed by the European Union.
In response, Trump launched a fusillade of tweets excoriating Harley for its decision.
From a political standpoint, Republicans are mostly all-in on the Foxconn deal, while Democrats see it as an issue they can use to their advantage during the general election.
Republican strategist Mark Graul said: “Every time there is a step forward with Foxconn — this groundbreaking, the hiring of all these Wisconsin contractors, actual motion on the project — the more popular it’s going to become. I think 10 years from now when that place is humming and there is a whole ecosystem of jobs, no one is going to remember there were people against it.”
While some Democrats have supported the deal, such as state Rep. Peter Barca of Kensoha, the vast majority of Democrats oppose it, claiming it’s bad for taxpayers.
“Foxconn includes a $4.5 billion investment of taxpayer dollars — no one wants to see this fail,” said Democratic strategist Melissa Baldauff. “But we know it was a poorly negotiated deal, so all we really have to go on is Scott Walker and Donald Trump’s word, and they both have a track record of overpromising and underdelivering.”
“This project is already shaping up to be vastly different than what was originally promised and voters around the state have indicated they don’t think the cost of the deal is worth it,” Baldauff said.
Environmental groups, meanwhile, have challenged Foxconn’s plans to divert Lake Michigan water outside the Great Lakes basin and raised concerns about pollution.
A fleet of bulldozers, backhoes and other heavy equipment has been excavating and pushing dirt at the Foxconn factory site since early May. Still, Trump’s visit will mark a watershed moment that focuses national and international attention on the project.
Massive size
The manufacturing campus envisioned is huge by U.S. standards and unprecedented in recent Wisconsin history. At 22 million square feet, the complex will have the floor space of more than 130 Walmarts.
Another way of sizing it up: It’ll be more than eight times as big as the Mercury Marine plant that stretches for more than half a mile along I-41 in Fond du Lac.
The 13,000 Wisconsin jobs Foxconn has promised, meanwhile, would top the state totals of such privatesector giants as Verona’s Epic Systems (9,000) and Sussex-based Quad/Graphics (7,500).
The plant will turn out high-resolution flat screens built to sync with ultrafast future data networks, helping to usher in a new era of technology-driven advancement. Foxconn envisions a host of sophisticated uses for the display panels in fields such as medicine, security and self-driving vehicles.
But the main markets, at least at first, likely will be more commonplace — television sets, notebooks and monitors.
In any event, it’s a very big deal that comes at a very big price. The tally on the public-expense side includes $764 million in local subsidies (money that officials say will be recouped in taxes on Foxconn’s property), a $140 million electric-power expansion paid for by utility customers, some $100 million for local road construction and the biggest slice of the incentive pie — $3 billion in state tax credits.
Because Wisconsin already waives almost all taxes on manufacturing profits, the vast majority of the $3 billion likely would end up being cash payments to Foxconn.
Essentially, Wisconsin taxpayers could be paying about 13 percent of the cost to build and equip Foxconn’s manufacturing campus and 17 percent of the wages of company employees here through 2032.
The jobs subsidy amounts to more than $200,000 per job created — a payout several times bigger than the typical public incentive packages in the U.S., according to economist Tim Bartik of the W.E. Upjohn Institute for Employment Research.
Backers of the deal say the incentives are well worth it because Foxconn will transform the state’s economy, not only creating a large number of jobs but bringing Wisconsin a new, high-tech industrial sector.
Campaign cash
Before heading to the Foxconn groundbreaking, Trump will appear Thursday morning at a Republican Party fundraiser at the Pfister Hotel. The event will be hosted by Ted Kellner, who is Wisconsin finance chairman for the Republican National Committee, and is expected to be attended by about 250.
“This event is to support Wisconsin candidates,” said Kellner, who is also finance chairman for Walker’s re-election campaign. “All of the money raised at the event will stay here in Wisconsin.”