Fox­conn’s fruits said to be far off

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - DANIELLE PAQUETTE

The deal to lure elec­tronic man­u­fac­tur­ing gi­ant Fox­conn to Wis­con­sin, which Pres­i­dent Don­ald Trump called “in­cred­i­ble” and Gov. Scott Walker hailed as a “once-in-a-cen­tury” op­por­tu­nity, wouldn’t gen­er­ate prof­its for the state un­til 2042, a state analysis projects.

The state’s Leg­isla­tive Fis­cal Bureau, a non­par­ti­san agency that an­a­lyzes pro­posed eco­nomic investments, looked at Walker’s bid last month to lure a new flat-screen dis­play fac­tory to the state in ex­change for a roughly $3 bil­lion in­cen­tive pack­age.

Fox­conn said it would break ground in south­east­ern Wis­con­sin and hire 3,000 work­ers over the next four years, with the “po­ten­tial” to cre­ate 13,000 jobs.

If the com­pany hit that growth tar­get, Wis­con­sin would break even af­ter 25 years, said Rob Rein­hardt, a pro­gram man­ager who worked on the re­port. If fewer than 13,000 jobs ma­te­ri­al­ize, it could take decades longer.

“We kind of dig a hole for our­selves,” Rein­hardt said.

State of­fi­cials, how­ever, main­tain that the deal would be ben­e­fi­cial.

“The state of Wis­con­sin is in­vest­ing in a once-in-a-life­time eco­nomic de­vel­op­ment op­por­tu­nity that will be trans­for­ma­tional as the state will be­come home to the only LCD man­u­fac­tur­ing fa­cil­ity out­side of Asia,” said Mark Ma­ley, spokesman for the Wis­con­sin Eco­nomic De­vel­op­ment Corp. “Bring­ing Fox­conn to Wis­con­sin will have an es­ti­mated an­nual eco­nomic im­pact of $7 bil­lion that will touch ev­ery re­gion of the state.”

That value, he said, will come from gen­er­at­ing an es­ti­mated 13,000 di­rect and 22,000 in­di­rect jobs.

Un­der Walker’s terms, Wis­con­sin, which com­peted with six other states to at­tract the busi­ness, would pro­vide Fox­conn with up to $2.85 bil­lion in state in­come tax cred­its, which could be made in cash pay­ments, and up to $150 mil­lion in sales tax breaks over a 15-year pe­riod.

The state Leg­is­la­ture was ex­pected to vote on the pack­age early this month, but on Wed­nes­day, Se­nate Ma­jor­ity Leader Scott Fitzger­ald, a Repub­li­can, said that he did not yet have the votes to ap­prove it.

“We should be cau­tious,” he said, ac­cord­ing to the Mil­wau­kee Jour­nal Sen­tinel.

The Fis­cal Bureau’s analysis, re­leased Tues­day, said other fac­tors could de­lay the in­vest­ment’s pay­off.

At 3.2 per­cent, Wis­con­sin has an un­em­ploy­ment rate that’s sig­nif­i­cantly lower than the coun­try’s 4.3 per­cent. Em­ploy­ers there al­ready com­plain about hav­ing trou­ble find­ing work­ers.

An­a­lysts pre­dict that if Fox­conn fills jobs with work­ers from neigh­bor­ing Illi­nois, where the un­em­ploy­ment rate is 4.7 per­cent, then the deal won’t start mak­ing money for Wis­con­sin un­til 2045.

Walker’s of­fice did not re­spond to a re­quest for com­ment. But the gov­er­nor has said that com­mu­nity col­leges and tech­ni­cal schools will adapt to meet Fox­conn’s needs. The fac­tory isn’t ex­pected to open un­til at least 2021.

The Tai­wanese busi­ness, which makes gad­gets for Ap­ple, Google, Ama­zon and other com­pa­nies, said it would spend $10 bil­lion to build the 20 mil­lion-square-foot plant and would pay work­ers an av­er­age an­nual wage of $53,000.

The gov­er­nor has main­tained that the deal will lead to more pros­per­ity in Wis­con­sin.

“We are call­ing this de­vel­op­ment ‘Wis­conn Val­ley,’” he said last month at the White House, un­veil­ing the de­vel­op­ment news along­side Trump, “be­cause we be­lieve this will have a trans­for­ma­tional ef­fect on Wis­con­sin just as Sil­i­con Val­ley trans­formed the San Fran­cisco Bay area.”

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.