BLOCKBUSTER
REPORTING
ON
% FOXCONN
SHOWS
H
OW
STATE
% OFFICIALS ARE
SAYING THEY
ARE
% INELIGIBLE FOR
HEFTY
T
AX
CREDITS
% BECAUSE THE SCOPE OF
THE
PROJECT
% HAS
CHANGED.
% THE
REPORTING WAS
BASED
ON
% LETTERS
WRITTEN
BACK
AND
FORTH
% BETWEEN THE
COMPANY
AND
THE
% EVERS'
ADMINISTRATION.
% "HERE AND
NOW'S" MARISA WOJCIK
% ALSO
OBTAINED
T
HE
CORRESPONDENCE
% AND
HA
S THIS
REPORT.
% >>
NEWLY-RELEASED CORRESPONDENCE
% DATING BACK TO
APRIL BETWEEN
% FOXCONN, EV
ERS
AND
W
EDC
SHOWS
% GROWING
CONFLICT
O
VER
THEIR
% ABILITY
TO
COLLECT
T
AX
% SUBSIDIES.
% EVERS'
ADMINISTRATION IS
ARGUING% THEY
ARE
INELIGIBLE
UNDER
% WISCONSIN
LAW
BECAUSE NEW
PLANS
% FOR
I
TS
WISCONSIN
LCD
% MANUFACTURING FACILITY N
O
LONGER
% FIT THE
TERMS OF
T
HE
ORIGINAL
% CONTRACT.%THE
STATE I
S
CALLING O
N
FOXCONN
% TO
RENEGOTIATE THE
CONTRACT T
O
% FIT
T
HE
CHANGES, A
DEMAND
WHICH
% FOXCONN SAYS
COM
ES
WITH
GREAT
% SURPRISE
A
ND
D
ISAPPOINTMENT
N.
% JANUARY,
FOXCONN'S
LO
UIS
W
OO
% TOLD
REUTERS
T
HAT
THE MOUNT
% PLEASANT FACILITY
W
AS
NO
LONGER
% GOING TO
BE A
M
ANUFACTURING
AS
% ORIGINALLY
PLANNED.
% INSTEAD,
FOXCONN WOULD
BUILD A
% SMALLER
GE
N
6
PLANT.
% MELISSA
HUGHES,
THE
NEW
CEO
O
F
%
WEDC, TOLD
FOXCONN
T
HE
PROJECT
% WORK
AN
D
PLANS DO
N
OT
ALIGN
WITH
% THE
PROJECT
AGREED TO
B
Y
T
HE
% PARTIES.
% THE DEPARTMENT OF
ADMINISTRATION
% SAYS
THE
AGREEMENT
W
AS
ONLY
FOR
% THE
GEN
10.5
PROJECT.
% THEY SAID
THE
CHANGES
W
ERE
% NECESSARY DUE
TO
MARKET AND
% SUPPLIER CONDITIONS.
% BUT
THE
MATERIAL
TERMS
OF
OUR
% CONTRACT
WITH
THE
WEE
WEDC
JOBS
% AND
INVESTMENT.
% THE
ORIGINAL CONTRACT
SIGNED
BY
% FOXCONN
UND
ER
GOVERNOR SCOTT
% WALKER SAYS THE
STA
TE
WOULD
PAY% UP
T
O
$4
BILLION IN
T
AX
CREDITS
% TO
FO
XCONN I
F
I
T
I
NVESTED
$10
% BILLION
FOR A
PRODUCTION PLANT
% TO
CREATE UP
TO
13,000
JOBS.
% WALKER
AND
THE
W
EDC
REASSURED
% SKEPTICS
THAT
CLAWBACKS AND
% PROVISIONS
IN
THE
CONTRACT
WOULD
% ENSURE PROPER
USE
OF
THE
% TAXPAYERS' INVESTMENT.
% A
NEW
REPORT F
ROM
THE
AUDIT
% BUREAU SAYS
THEY'RE
CONCERNED
% WITH THE
NUMBERS
FOXCONN I
S
% REPORTING ON
JO
B
CREATION
AND
% CAPITAL
INVESTMENTS.
% THROUGHOUT THE
EIGHT
MONTHS
O
F
% LETTERS
BETWEEN
EVERS
A
ND
% FOXCONN,
THE
Y
ENSURE
ONE
ANOTHER
% BOTH ARE
COMMITTED
TO
THE
% PROJECT.%BUT
IN
T
HE
LATEST
L
ETTERS,
DOA
% SECRETARY JOEL
BRENNAN
SAYS
% FOXCONN
WA
S
OPAQUE
ABOUT
I
TS
% PROJECT
PLANS.
% FOXCONN
S
AID
DISTRACTIONS
LIKE
% THIS
LE
AV
E
JOB
SEEKERS
WONDERING
% IF
D
OING
BUSINESS
I
S
WELCOMED
BY% GOVERNOR
EVERS'
ADMINISTRATION.
% THEIR
LAST
WOR
DS
SAY
FOXCONN
% WILL
CONTINUE
T
O
PLAY AN
% IMPORTANT AND
CONSTRUCTIVE ROLE% IN
THE STATE OF
WISCONSIN.
% HOWEVER, A
T
THIS
POINT,
WE
SHALL
% BE
EVALUATING
A
LL
AVAILABLE
% OPTIONS
RELATING
TO
THE
W
EDC
% CONTRACT.
% >>
FOR
THE
LATEST ON THE
STATUS% OF THE
FOXCONN CONTRACT WITH
% WISCONSIN, WE TURN
TO
SECRETARY% OF
THE WISCONSIN DEPARTMENT OF
% ADMINISTRATION, JOEL
BRENNAN,
% AND THANKS
VERY MUC
H
FOR
BEING
% HERE.
% >> THANKS
FOR
HAVING
M
E.
% >>
WELL,
S
O
W
HAT
SPECIFICALLY
% DOES
THE STATE OF WISCONSIN
WAN
T
% FROM
FOXCONN
RIGHT
NOW?
% >>
WELL,
I
THINK
FUNDAMENTALLY
% WE WANT
FOXCONN TO BE
% SUCCESSFUL.
% WE WANT
THE
LOCAL
UNITS
OF
% GOVERNMENT TO BE
PROTECTED.
% WE WANT
THE
PEOPLE
IN
% SOUTHEASTERN WISCONSIN AND
% THROUGHOUT THE
STATE
TO
BEN
EFIT
% FROM
THIS PROJECT
.
% BUT
WE
ALSO
WANT
TO
ENSURE
THAT
% EVERYBODY
UNDERSTANDS
THAT
% NOBODY
GETS A
BLANK
CHECK I
N
% THESE
THINGS
AND
THAT
% FUNDAMENTALLY
THIS
PROJECT HAS
% CHANGED
FRO
M
WHERE IT W
AS
T
WO
% YEARS AGO.
% THOSE
THINGS ARE
OKAY, B
UT
I
T
% ALSO
REQUIRES
U
S
THEN
T
O
REVISIT
% SOME OF
THE
FUNDAMENTALS
ABOUT
% THE
TBREAMENT.% >>
AND
SO
YOU'D
LIKE
TO
A
MEND
% THE
CONTRACT.% >>
I
THINK IT'S
IMPORTANT TO
% NOTE
THAT
THE
FIRST
DISCUSSION% OF
AMENDMENT OF
THE
CONTRACT
% ACTUALLY
CAME
FRO
M
FOXCONN.
% THERE HAS BEEN THI
S
SERIES
O
F
% COMMUNICATIONS THAT
HAV
E
C
OME
% OUT OVER TH
E
LAST
FEW
WEEKS
AND
% REALLY
GOING BACK TO MARCH OF
% THIS
YEAR,
FOXCONN
EXPRESSED% THEIR
DISENGS
INTENTION TO PROCEED
W
ITH
% THE AMENDMENT PROCESS.
% WE
HE
PROCEEDED
WE
PROCEEDED UNDER
THE
% ASSUMPTION THEY WERE
GOING TO
D
O
% THAT
FO
R A LON
G
PERIOD
OF
TIME.
% >>
ARE
THEY
NOW
PROVIDING
YOU
% THINGS YOU N
EED
TO
M
AKE
THESE
% DECISIONS?
% >> THAT'S
ONE OF T
HE
THINGS
% THAT'S
FUNDAMENTAL TO
THIS.
% JUST A LITTLE BIT ABOU
T
WHAT
THE
% JUSTIFICATION OF
THIS WAS
T
WO
% YEARS AGO.
% SO AT THAT
TIME,
ERNST &
YOUNG
% DID
DEEP
ANALYSIS
AND
THE
% SUBSIDY WAS
BASED
ON
SOME
OF
THE
% EVALUATION THEY
HAD DONE.
% IN
THAT
EVALUATION, THEY
NOTED
% THAT
THE
PAYOFF F
OR
THE
STATE
% WAS
BASED
ON
GETTING
TO A
POINT
% WHERE THEY WERE
PRODUCING
SIX
% MILLION
LCD
TELEVISIONS
IN
% RACINE
COUNTY.
% FOXCONN HAS
SAID
THEY'RE
N
O
TELEVISIONS.
% WHAT
W
E
DON'T
K
NOW
IS WHAT I
S
% THE
MARKE
T
FO
R WHAT THEY
AR
E
% GOING TO BE
DOING.
% I
THINK
FOXCONN
MAY
N
OT
KNOW
% THAT
EITHER,
WHICH
I
S
OKAY,
% EXCEPT
THAT WE
HAVE A
CONTRACT% THAT WAS FOR
T
HE
LCD
SCREENS
% FROM
T
WO
YEAR
S AGO.
% SO WE
NEED
T
O
MAKE SURE
THE
% PROJECT
IS
MARRIED U
P W
ITH
WHAT
% THE CONTRACT
TERMS
ARE.% >> DO YOU
HAVE
A
NY
IDEA
WHAT
% EXACTLY
FOXCONN
PLANS
TO
BUILD?
% >> WE
HAV
E A GOO
D IDEA
OF
WHAT
% THEY'RE
DOING
THROUGHOUT
-
UP
% UNTIL ABOUT
THE END OF
2020.
% THERE ARE
THREE
BUILDINGS ON THE
% SITE,
A
BOUT
1.4
MILLION SQUARE
% FEET OF
SPACE
AND
THERE ARE
SOME
% EXCITING THINGS
HAPPENING
TH
ERE.
% ONE
COMPANY
IN
PARTICULAR,
% FOXCONN
INDUSTRIAL
INTERNET,
IS
% DOING
T
WO
OF
THOSE
THREE
% BUILDINGS, SEPARATE
F
ROM
THE
% TERMS THAT WERE
DISCUSSED TWO
% YEARS A
GO.
% THOSE ARE
THINGS
THAT
HAVE
% EVOLVED AND
CHANGED
WITH
THIS
% PROJECT.
% AGAIN, THOSE
THINGS ARE
GOOD.
% THEY'RE
EXCITING.
% THEY'RE
G
OING
T
O
EMPLOY
PEOPLE.
% HOWEVER,
THAT'S
NO
T WHAT
TH
E
% CONTRACT WAS SIGNED FOR
.
% AND THAT'S
WHY WE
H
AVE TO
GO
% BACK
AND
REVISIT
THOSE
THINGS
% WITH
FOXCONN.
% >>
AS
TO
THIS,
SPEAKER
ROBIN
VOS
% DESCRIBES THAT
C
ONTRACT
AS
% IRONCLAD
AND
HE
SAYS
HE
DOESN'T
% WANT TO
MATERIALLY CHANGE
IT,
% SAYING
IF
YOU
WANT
TO
REDUCE
% INCENTIVES,
I
T
COULD RESULT
IN
% LESS
HIRING.
% WHAT ABOUT
THAT?
% >>
WELL
, I
THINK
THAT
FOR
ANYONE
% TO ARGUE
THAT
THERE
HAVEN'T
BEEN
% MATERIAL
CHANGES
IN
WHAT
FOXCONN
% SAID THEY WERE GOING
T
O D
O
AND
% CONTRACTED
FOR
TWO
YEARS
A
GO
% VERSUS
NOW,
THEY
HAVEN'T
BEEN
% FOLLOWING
FOXCONN'S
OWN
% COMMUNICATIONS.%SO
IT J
UST
KIND
OF
GOES
TO
THE
% FUNDAMENTALS OF
THIS.
% THE STATE
HAD
THE
OPTION
IN
2017
% TO
CHOOSE
PROJECT A
O
R
PROJECT
% B,
WHA
T
THEY
CALL
THE
AGAIN
% RATION
10.5
OR
GENERATION
6
.
% THERE
WAS A
LIS
T OF
THINGS
THAT
% CAME ALONG
W
ITH
THAT.
% SO
THAT'S WHAT
WA
S
EVALUATED,
% APPLIED FOR AND
CONTRACTED FOR
% IN
2017.
% THERE
A
RE
THINGS THAT
ARE FUND
% FUNDAMENTALLY DIFFERENT WITH%
THIS OTHER
PLAN.
% I'VE
HEARD
THE
SPEAKER
S
AY
YOU
% WOULDN'T TELL SOMEBODY
ELSE
TO
% PRODUCE
SCREWDRIVERS
INSTEAD
OF
% HAMMERS
FOR A
DIFFERENT THING.% WELL,
FRANKLY
, IF
YOU'RE
GOING
% TO
PRODUCE
SIX
MILLION
TVs
AND
% THAT'S
W
HAT
ALL
OF
T
HE
% EVALUATION WAS,
IF THEY
ARE
% GOING
T
O
PRODUCE
SOMETHING
% ADDITIONAL, THERE'S NOTHING
% WRONG WITH
THAT,
BUT
AR
E
THEY
% GOING
T
O
PRODUCE
60
OR
6,000?
% THOSE
ARE
THE
QUESTIONS WE S
TILL
% HAVE
AND
WHICH
TAXPAYERS
% PROBABLY WANT
US TO
BE
A
BLE
TO
% ANSWER,
TOO,
BEFORE WE
C
AN
S
AY
% THAT
Y
ES A
HORSE
I
S A
HORSE
IS A
% HORSE
OR
ALL
THESE
T
HINGS
ARE
% THE
SAME
THINGS.
% >>
AS IT
STANDS, YOUR
POSITION
% IS THE
COMP
ANY
IS
NOT
ELIGIBLE
% FOR SUBSIDIES AT
ALL?
% >>
TH
E
PROJECT THAT
THEY'RE
% DOING NOW
IS
NO
T
WITHIN THE
% BOUNDS OF THE
CONTRACT THAT WAS
% SIGNED IN 2017.
% WE
MAD
E
THAT
PRETTY
CLEAR
FOR
% THEM OVER
THE
L
AST SEVERAL
% MONTHS.
% AND
I
THINK I
T'S
IMPORTANT
TO
% NOTE,
THEY'VE
CONTINUED
T
O
DO
% WORK AWARE OF
THAT.
% WE'VE
CONTINUED TO HAVE
% DISCUSSIONS ABOUT TH
OSE
THINGS.
% AND
I
ANTICIPATE
W
E
WIL
L OVER% THE
COMING
WEEKS.% >> WHAT IS
YOUR
RESPONSE TO
% FOXCONN SAYING
T
HAT
Y
OUR
% POSITION
LEAVES
JOB
CREATORS
% WONDERING
I
F
DOING
BUSINESS
I
N
% WISCONSIN
IS
WELCOME
BY
THE
% EVERS
ADMINISTRATION?% >>
WELL,
I
THINK OVER
THE
FIRST
% SEVERAL
MONTHS OF
THE
EVERS
% ADMINISTRATION
THERE HAVE
BEEN
% SEVERAL
OCCASIONS,
HIGH-PROFILE
% ANNOUNCEMENTS
WITH
MILWAUKEE
% TOOL OF THE
ST
ATE
PROVIDING AND
% FRANKLY
BEING
NIMBLE IN
BEING
% ABLE
TO
PROVIDE
RESOURCES SO
% COMPANIES LIKE
THAT
COULD
GROW% HERE AND I
THINK
THAT
% FUNDAMENTALLY THE
CONVERSATIONS% WE'VE
HAD
,
THE
INVESTMENTS
WE'VE
% MADE HAVE BEEN IN
COMPANIES
THAT
% ARE
H
ERE,
THAT
W
ANT
TO
GROW
% HERE, THAT WANT
T
O
CONTINUE
TO
% WORK WITH
US ON
THE
ENTIRE
% FABRIC OF THE
ECONOMY.
% SO
ALL
EVIDENCE
IS
TO
THE
% CONTRARY.
% EVERY
CONVERSATION WITH
FOXCONN
% IS
WE
WANT
THEM TO
BE
AS
% SUCCESSFUL
AS
THEY
POSSIBLY CAN
% BE HERE IN WISCONSIN.
% THAT'S WH
Y
TO
THEIR
BENEFIT
% AND
IN
THEIR BEST
INTEREST
T
O
% MAKE
SURE
THAT
W
E
MARRY
WHATEVER% THE
CONTRACT
TER
MS
ARE
W
ITH
TH
E
% PROJECT THAT THEY
A
RE
DOING
NOW.
% AND
THAT
WILL
CONTINUE
T
O
EVOLVE
% FOR
THEM.
% I
THINK
THEY DON'T
KNOW
HE
-
% AND THAT'S PART
O
F
HOW
THE
% PROJECT HAS
EVOLVED OVER
THE
% LAST
T
WO
YEARS
IN
THAT
THINGS
% ARE
FUNDAMENTALLY DIFFERENT IN
% THE
WORLD
MARKETPLACE
THAN THEY
% WERE
TWO YEARS
AGO.
% THERE'S NOTHING
WRONG WITH
THAT.
% THEY NEED TO
B
E
ABLE
TO
EVOLVE
% WITH THAT.
% BUT YOU
CAN'T
HAVE A
CONTRACT
% THAT
PUTS
TH
E
STATE IN
PLAY A
ND
% NOT ALLOW
U
S
TO
EVALUATE
THESE
% THINGS
MOVING
FORWARD.
% THAT'S
W
HAT
RATIONAL
PEOPLE
% WOULD DO
AS WE
W
ANT
TO
MOVE
% FORWARD
ON
THIS.
% >>
GIVEN
THE
FRICTION
AS
% EVIDENCED BY
THE
CORRESPONDENCE% BETWEEN YOU
AND
OTHERS
IN
THE
% ADMINISTRATION AND
FOXCONN, DOES
% THE STATE
RUN
THE
RISK
OF
% FOXCONN
ON
SCWU
S BAILING
ON
J
UST
BAILING
ON
THIS
% PROJECT
ALTOGETHER?% >>
I
THINK
TH
E
DECISION, AS HAS
% BEEN THE
CASE OVER THE
PAST T
WO
% YEARS,
FOXCONN IS
GOING
T
O
MAKE
% BUSINESS
DECISIONS,
THEY'RE
NOT
% GOING
TO
MAKE THOSE
DECISIONS
% SIMPLY B
ASED
ON T
AX
CREDITS.
% THEY'RE GOING
TO
MAKE
THOSE
% BASED ON
THE
FUNDAMENTALS
OF
% THEIR
B
USINESS,
BASED ON THE
% WORLD
ECONOMIC
REALITIES.
% SO ANYBODY
TRY
ING TO
SAY
THAT
% THE STATE
DOING
THIS
OR
THAT
IS
% GOING TO
DRIV
E THEM
AWAY,
% FOXCONN HAS
CONTINUED
TO
EVOLVE
% THEIR
BUSINESS
DECISION-MAKING% OVER THE LAST
TWO YEARS
WITH THE
% CONTRACT THAT THEY
HAD,
WITH
% CHANGES
IN
ADMINISTRATION,
WITH
% CHANGES
AT
FOXCONN.
% SO THOSE
DE
CISIONS A
RE
GOING TO
% BE
MADE
BAS
ED
ON
FOXCONN'S
% BUSINESS, NOT
BASED
ON ANYTHING
% THAT THE
STATE
IS
DOING.% >>
W
HAT
DO
Y
OU
EXPECT ANY
KIND
% OF
RESOLUTION
TO
THE
QUESTIONS
% THAT YOU
HAVE
?
% >>
I
THINK
THERE'S
URGENCY TO
I
T
% IN
THAT THERE ARE
REPORTS
THAT
% FOXCONN
HAS
TO
FILE
EARLY
IN
% 2020.
% WE
WAN
T
TO
MAKE
SURE
THAT
WE'
RE
% ABLE
TO
D
O
-
IN
OUR
BEST
WAY,
% TO
INCENTIVIZE THEM SO THAT
THE
% WORK
THA
T THEY
ARE
DOING CAN
BE
% REWARDED AND
THE WORK
THEY'RE
% GOING
TO
BE
DOING IN
THE
FUTURE
% IS
REWARDED.
% WE
WA
NT
TO
MAKE
SURE
WE
MAKE
% THOSE CHANGES WITH
ALL
THE
% APPROPRIATE AMOUNT
OF
SPEED, BUT
% ALSO
THE
A
PPROPRIATE
AMOUNT
OF
% EVALUATION AND
JUSTIFICATION.
% BECAUSE THAT'S
REALLY
W
HAT
% PEOPLE
NEED OUT O
F
THIS.
% >> ARE
Y
OU
I
N
CURRENT
% COMMUNICATION WITH
THEM
TODAY?
% >>
I
HAVEN'T
SPOKE WITH THEM% TODAY,
BUT WE
HAVE H
AD
% CONVERSATIONS WITH THE
M THIS
% WEEK.
% WE HAVE
CON
VERSATIONS
ONGOING
ON
% FOXCONN
ON A
COUPLE
DIFFERENT
% LEVELS
ABOUT
WHAT'S
GOING
ON
THE
% GROUND AND HOW
CAN
THE
STATE
BE
% HELPFUL IN
MAKING SURE
WE'RE
% DOING THAT.
% THERE
ARE
ALSO
ON GLENN GROTHMAN
% DISCUSSIONS
-
ONGOING
% DISCUSSIONS ABOUT
WHA
T
FOXCONN
% IS
DOING ON
THE
GROUND.
% THOSE
TWO
THINGS
CAN
MOVE
% FORWARD TOGETHER TO
MAKE
US
BOTH
%