Questions emerge over Foxconn incentives

Wisconsin residents voice concerns about development.

PARIS, WIS. — When Gov. Scott Walker announced last month that the electronics giant Foxconn had chosen Wisconsin as a site for its new factory, he was a picture of grinning, fist-pumping excitement. It would be the biggest economic project in Wisconsin history, Walker promised, with a $10 billion investment, as many as 13,000 jobs and a high-tech campus the size of 11 Lambeau Fields.

But the project has run into doubts. Residents of southeastern Wisconsin, where the factory is expected to be built, say they are concerned about the impact of such a massive factory in the region. Environmental advocates have criticized the administration of Walker, a Republican, for its willingness to bend regulations on the environment so that Foxconn can move more quickly on construction.

In Madison, the state capital, a legislative package that includes taxpayer-funded incentives for Foxconn has drawn questions from skeptical lawmakers; on Thursday, Scott Fitzgerald, the leader of the Republican-controlled state Senate, said he did not know if he had the votes to approve it in its current form.

His fellow senators have been asking questions about the state’s spending on the project and the tax credits it will offer, he said in an interview. “We want to see milestones, or certainly some kind of schedule on the job creation,” Fitzgerald said.

The latest blow to the project came this week from the state Legislative Fiscal Bureau, a nonpartisan Wisconsin Gov. Scott Walker said he does not anticipate there will be “major changes” to a bill that would extend $3 billion in taxpayer incentives to lure electronics manufacturer Foxconn to build a factory in the state.

agency that analyzes legislation for lawmakers, which found that Wisconsin taxpayers would not recoup their investment in Foxconn until at least 2043 — a conclusion that alarmed both Democrats and fiscal conservatives.

The Foxconn project has drawn attention far beyond Wisconsin. For Foxconn, the Taiwanese supplier for Apple and other major tech companies and the world’s largest contract electronics manufacturer, it would be its first major U.S. factory. The company employs about 1 million people worldwide, mostly at its sprawling factories in China. For President Donald Trump, who said he had personally helped secure the plan, the project has been held up as a symbol of his administration’s work to boost the nation’s manufacturing.

Walker, who has made promises of job creation a centerpiece of his two terms in office, has pushed lawmakers to move quickly in approving the bill, which would offer Foxconn, a producer of flat-panel display screens for televisions and other consumer electronics, close to $3 billion in state tax credits. The subsidies for the Foxconn plant would equal $15,000 to $19,000 per job annually.

“This is not a principled approach to economic development,” said Carl Davis, research director at the left-leaning Institute on Taxation and Economic Policy in Washington. “This is buying jobs at a very high price. And it’s certainly not small government. This is not stepping out of the way and letting the market do what it does.”

The governor and his allies

say that costs are far outweighed by the benefits: a massive factory with jobs paying at least $53,000 per year, on average, plus benefits. As some Wisconsinites see it, the Foxconn plant could signal a return to the manufacturing heyday of the southeastern corner of the state, once a major Midwestern center of automotive assembly.

“The economic opportunities are enormous,” said state Rep. Peter Barca, a Democrat who represents a district where the Foxconn factory would be built. “The housing industry would blossom. The construction industry would be booming. Virtually every construction company would have a piece of the action.”

In July, as Walker stood in the Santiago Calatrava-designed Milwaukee Art Museum for a local Foxconn announcement that followed an elaborate unveiling of the deal at the White House with Trump and House Speaker Paul Ryan, he said he was moved to tears when he saw a local television report that showed bar patrons applauding news of the plant.

“That’s what it’s all about,” he said.

Under the legislative package being considered in Madison, Foxconn would be exempt from regulations that protect state wetlands and it would be permitted to forego a detailed environmental analysis that is usually required for large projects, moves proponents of the deal say would speed the process. The incentive package for Foxconn was designed to give Wisconsin an advantage in a highly competitive business landscape, with states like Michigan vying for a Foxconn factory within their own borders. Advocates have long complained that the Walker administration has neglected environmental concerns, citing budget cuts to the state Department of Natural Resources.

“Our government is willing to sacrifice things like the environment that are irreplaceable to the people, just for commerce,” said Bill Keyes, 71, a retired carpenter, drinking coffee with his wife, Kathy, outside their farmhouse in Paris, one of the sites being considered for the plant. “These rules on the environment are hardwon victories, and they’re being ignored, like they don’t mean anything.”

Bill Davis, a chapter director of the Sierra Club, criticized what he called a lack of transparency on Foxconn and the lack of environmental analysis.

“From a broad brush, bringing in a manufacturing facility to Wisconsin is fine as long as you do it right,” he said. “The things that attract businesses to Wisconsin tend to actually be clean air, clean water, skilled workforce. So you don’t want to jeopardize those things.”

Lawmakers in the Assembly in Madison are expected to vote on the Foxconn bill as early as next week. Fitzgerald, the Senate leader, said he expected that the legislation would ultimately pass.

Calling the package “an excellent investment for our entire state,” Tom Evenson, a spokesman for Walker, said the governor is “confident the bill will pass the Legislature, given this is a oncein-a-lifetime opportunity that brings high-tech manufacturing back to America, right here in Wisconsin, and adds 13,000 family-supporting jobs.”

Under a deal Walker signed with Terry Gou, the Foxconn chairman, the bill would have to be passed by the end of September. The factory could open as early as 2020.

The Keyeses say that if Foxconn moves in next door, they are moving out, leaving the 20-acre farm they bought in 2003 for its rural idyll: the pond that attracts egrets and herons, the towering wooden barn where they keep their horses and the modest house built when Abraham Lincoln was president.

“When I think about a company coming in and filling in the wetlands,” said Bill Keyes, his voice trailing off. “Nobody should be allowed to do that. It’s wrong.”

But Ronald Kammerzelt, a supervisor for the town of Paris, said he has been hoping for years that the region would see an economic rebirth. Foxconn is “on a totally different level” than other companies that have come so far.

“At first glance,” he said, “it sounds like it would be good for the area in terms of providing living-wage jobs.”

SCOTT BAUER / AP