THE SCOTT WALKER ADMINISTRATION
AS A TRANSFORMATIVE AND
INNOVATIVE BUSINESS ENTERPRISE,
BRINGING FOXCONN TO WISCONSIN
PROMISED A NEW ERA OF
MANUFACTURING IN THE FIELD OF
ELECTRONICS AND THE DESIRE TO
POSITION WISCONSIN AS THE
SILICON VALLEY OF THE MIDWEST.
TODAY THE STATE'S CONTRACT WITH
THE TECH GIANT HAS BEEN SCALED
BACK, RENEGOTIATED BY THE
WISCONSIN ECONOMIC DEVELOPMENT
CORPORATION FROM A HISTORIC
$2.85 BILLION TO $80 MILLION.
WE'RE JOINED BY THE CEO AND
SECRETARY OF THE WEDC, MISSY
HUGHES.
THANK YOU SO MUCH FOR JOINING
US.
>> GOOD MORNING.
THANK YOU FOR HAVING ME.
>> SO WHAT IS IN THE NEW
CONTRACT AND HOW DOES IT DIFFER
FROM THE JOBS AND INVESTMENT
PROMISES ORIGINALLY MADE BY
FOXCONN?
>> SO THE ORIGINAL CONTRACT WAS
AN AGREEMENT BETWEEN THE STATE
AND FOXCONN TO INCENTIVIZE
FOXCONN TO BUILD A MASSIVE
FACTORY, $10 BILLION WORTH OF
INVESTMENT, CREATING 13,000
JOBS.
AND IT WAS ACTUALLY A VERY
PRESCRIPTIVE CONTRACT IN THAT IT
REQUIRED FOXCONN TO BUILD THESE
LARGE LCD SCREENS.
AND WHEN IT CAME TIME FOR
FOXCONN TO DO THAT, THE MARKET
HAD CHANGED, IT WAS MUCH LESS
COM PETCOMPETITIVE AND IT DIDN'T MAKE
SENSE FOR FOXCONN TO BUILD THOSE
IN THE UNITED STATES.
AND SO WHAT WE'VE DONE IS WORKED
WITH FOXCONN TO RIGHT SIZE THE
CONTRACT, TO MAKE IT MAKE SENSE
FOR FOXCONN'S BUSINESS, BUT MORE
IMPORTANTLY TO MAKE IT MAKE
SENSE FOR THE WISCONSIN
TAXPAYERS.
>> THE WISCONSIN CONTRACT
INCORPORATED CLAWBACKS FOR THAT
PURPOSE BUT FOXCONN WAS STILL
TRYING TO GET PAYMENT FROM THE
STATE AND BLAMING MARKET FORCES
FOR THESE DEFICIENCIES.
SO WHAT CHANGED?
>> WELL, WE WERE ABLE TO
CONTINUE TO WORK WITH FOXCONN
TO, YOU KNOW, DEMONSTRATE TO
THEM THAT THE CONTRACT WAS BASED
ON THIS MASSIVE FACILITY.
YOU'RE NOT BUILDING THIS MASSIVE
FACILITY.
WE NEED TO DO SOMETHING
DIFFERENT.
I THINK ULTIMATELY WEDC'S
DECISION TO TELL FOXCONN THAT
THEY WERE NOT EL ELIGIBLE FOR TAX
CREDITS LAST FALL REALLY HELPED
TO KIND OF SAY, OKAY, YOU KNOW,
IT'S TIME TO GET TO THE TABLE
AND GET TO WORK ON RIGHT SIZING
THIS CONTRACT.
>> SO WHAT EXACTLY IS FOXCONN
GOING TO MAKE OR DO ON THE MOUNT
PLEASANT CAMPUS?
>> WELL, FOXCONN'S EXPERTISE IS
IN WHAT'S CALLED CONTRACT
MANUFACTURING.
THEY'RE REALLY GOOD AT BUILDING
THINGS FOR OTHER PEOPLE.
SO WHAT THEY'RE DOING RIGHT NOW,
WHAT I'VE BEEN ABLE TO SEE
FIRSTHAND, IS BUILDING HIGH-TECH
DATA SERVERS, AND THEY HAVE PUT
IN ASSEMBLY LINES TO DO THAT.
THEY ARE BUILDING THOSE FOR A
NUMBER OF DIFFERENT COMPANIES.
AND THEY WILL CONTINUE TO BE
ABLE TO BE FLEXIBLE AND BUILD
OTHER TYPES OF PRODUCTS FOR
OTHER COMPANIES AND REALLY USE
THEIR EXPERTISE.
SO WHAT WE'VE DONE IS GIVEN THEM
THE OPPORTUNITY TO RESPOND TO
MARKET FORCES AND REALLY SCALE
BACK THE EXPOSURE FOR WISCONSIN
TAXPAYERS.
>> NOW, THE LAST NUMBERS THAT WE
SAW OF EMPLOYMENT DATA SHOWED
THAT FOXCONN WAS SHORT OF WHAT
THE 2020 TAX CREDITS ARE GOING
TO REQUIRE.
IS FOXCONN GOING TO FIND ITSELF
OVER-PROMISING OVER AND OVER?
>> YOU KNOW, WE'VE WORKED -- ONE
OF THE THINGS WE REALLY WORKED
WITH FOXCONN WAS TO FIND -- YOU
KNOW, LET'S FIND WHAT'S A
CONSERVATIVE ESTIMATE OF WHAT
YOU'RE GOING TO BE DOING SO WE
CAN GET SOME WINDS, MOVE PAST
THE OLD CONTRACT.
SO I'M CONFIDENT THAT FOXCONN IS
GOING TO MEET THE PERFORMANCE
REQUIREMENTS WHEN WE GET THEIR
REPORT, WHICH IS NOW DUE ON
JULY 1.
WE WILL GO THROUGH THE PROCESS
OF VERIFYING THAT THE WAY WE DO
WITH ALL OF OUR CONTRACTS.
AND THEN I'M CONFIDENT THAT
WE'LL BE ABLE TO AWARD FOXCONN
SOME TAX CREDITS FOR THEIR WORK.
>> SOME ECONOMISTS SAY
INCENTIVES LIKE THIS JUST DON'T
WORK.
SO IS THIS SOMETHING THE WEDC IS
GOING TO CONTINUE AS A PRACTICE
GOING FORWARD?
>> WELL, I THINK WHAT'S REALLY
IMPORTANT TO KEEP IN MIND IS
BUSINESSES ARE LOOKING FOR MANY
COMPLICATED THINGS WHEN THEY'RE
MAKING A DECISION WHERE TO
EXPAND OR LOCATE THEIR BUSINESS.
THEY'RE LOOKING AT WORKFORCE,
EDUCATION OF THAT WORKFORCE.
THEY WANT TO MAKE SURE THAT THE
COMMUNITY IS FRIENDLY TO THE
BUSINESS AND THE STATE IS
FRIENDLY TO THE BUSINESS.
AND THEN THEY ARE INTERESTED IN
INCENTIVES.
YOU KNOW, SOME OF OUR WORK SHOWS
THAT, YOU KNOW, IT'S MAYBE A 10%
DECISION-MAKER FOR THEM.
SO WE WANT TO MAKE SURE AT WEDC
THAT WE'RE COVERING THE 90%,
THAT WE'VE GOT THE WERG FORCE
FOR THE COS THAT COMPANIES THAT WANT TO
COME HERE, THAT WE'VE GOT THE
INFRASTRUCTURE.
SO THERE'S A WHOLE LOT OF
DECISIONS TO BE MAKING.
WE'LL CONTINUE TO OFFER
INCENTIVES BUT MAKE SURE WE DO
THE WORK TO MAKE SURE THIS IS
THE RIGHT PLACE FOR THEM.
>> ON WEDNESDAY NIGHT PRESIDENT
BIDEN LAID OUT AMBITIONS FOR
TECH RESEARCH AND DEVELOPMENT.
DESPITE FOXCONN'S SETBACKS, DOES
WISCONSIN STILL HAVE POTENTIAL
TO GROW ITS FOOTPRINT IN BIG
TECH OVERALL?
>> I'M SO EXCITED ABOUT
WISCONSIN'S OPPORTUNITY GIVEN
THE NEW CONVERSATIONS ABOUT
INFRASTRUCTURE, THE NEW ENERGY
ECONOMY.
WE ARE A POWERHOUSE OF
MANUFACTURING.
SO WITH THE ADDITION OF
COMPANIES LIKE FOXCONN, BUT
WE'VE ALSO GOT POWERHOUSES LIKE
JOHNSON CONTROLS AND ROCKWELL.
WE'RE READY TO TAKE ADVANTAGE OF
ALL OF THIS ENERGY THAT'S COMING
INTO THE ECONOMY AND I'M SO
EXCITED FOR THE NEW
OPPORTUNITIES, WHETHER IT'S
BUILDING BATTERIES OR SOLAR
PANELS, ELECTRIC VEHICLES.
THERE'S JUST ALL SORTS OF
CONVERSATIONS RIGHT NOW, AND
WISCONSIN'S POISED TO JUMP ON
THOSE OPPORTUNITIES.
>> ALL RIGHT.
WE NEED TO LEAVE IT THERE.
SECRETARY MISSY HUGHES OF THE
WEDC.