Wisconsin Foxconn deal could include $1 billion to $3 billion in taxpayer-backed incentives
MADISON - A plan to bring a massive Foxconn Technology Group plant to Wisconsin could cost $1 billion to $3 billion in local, state and federal incentives over coming years — a stunning sum for a project that backers say could transform the state’s economy.
Foxconn's plans are to be announced Wednesday at the White House, with a follow-up event Thursday at the Milwaukee Art Museum, according to one source. Tuesday night, the White House listed a 5 p.m. Wednesday "jobs announcement" in the East Room on President Donald Trump's schedule.
An incentive package that reaches into the billions would be unlike anything Wisconsin has offered in the past and would require approval from state lawmakers. Senate Majority Leader Scott Fitzgerald (R-Juneau) has said he hoped to get bipartisan support for the package.
Fitzgerald did not provide details on the terms of the package, but sources said it would likely top $1 billion and could close in on $3 billion.
Trump told The Wall Street Journal on Tuesday that Taiwan-based Foxconn is strongly considering Wisconsin as the site for a U.S. plant.
He made his comments after the Milwaukee Journal Sentinel and others reported the company would announce this week that Wisconsin is Foxconn's choice — or at least its leading choice — for an electronics factory.
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The company manufactures iPhones and flat-screen television panels. Company officials have talked about a massive investment in the United States that would create thousands of jobs. They have visited Wisconsin and other states in recent weeks as they consider their options.
Reeling in the company would take big bucks. One source said Wisconsin's offer would come in at $1 billion. Three others said it would be closer to $3 billion. A fifth source said the deal at one point was expected to be worth $3 billion but had come down since then.
Two of those citing the $3 billion price tag said the package would be paid over 15 years.
If the deal cost $1 billion and the company created 10,000 jobs, the government would spend $100,000 per job. Supporters say such an investment would be worthwhile because Foxconn would also draw numerous suppliers that would create their own jobs and energize the Badger State's economy.
It was unclear how the funding for the deal would be spread among the state, federal and local governments. Incentives take many different forms and can include cash outlays, infrastructure investments, loans or tax breaks.
Also unknown is how many jobs Foxconn would deliver with its plant and how much workers would be paid. Those will be crucial issues as lawmakers consider whether to sign off on any incentive package.
Bringing the company to Wisconsin would be a win for Gov. Scott Walker and U.S. House Speaker Paul Ryan, whose district includes Kenosha and Racine counties, two of the possible Wisconsin locations. It would also be a victory for Trump, who has promised to bring manufacturing jobs back to the United States after decades of decline and who was the first Republican presidential candidate since Ronald Reagan to win Wisconsin.
Monday evening, a private jet linked to Foxconn CEO Terry Gou flew from Santa Ana, Calif., to Dulles International Airport outside Washington, D.C., according to the FlightAware.com tracking website. The Gulfstream 650 is the same aircraft that landed in Milwaukee and Madison this month.
While official information on the plane is not publicly available, its tail number shows it is registered in Taiwan, and Taiwanese media outlets have identified the jet as Gou’s.
While news that Foxconn was eyeing Wisconsin broke in mid-June, the company’s direct involvement here began at least two months earlier, the Journal Sentinel has learned.
In April, Gou was on one of the aircraft that whisked Trump, Walker and others to Kenosha from Milwaukee’s Mitchell International Airport, a source said.
Trump used the April 18 visit to tool-maker Snap-On Inc. to talk about manufacturing and sign a "Buy American, Hire American" executive order.
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Meanwhile Tuesday, in an interview outside the White House, Trump chief of staff Reince Priebus told WTMJ-TV the conversations with the president about Foxconn “started when he went to Snap-On in Kenosha.”
Priebus described a helicopter ride — Trump was in an Osprey military aircraft — in which the president noticed the vacant land in the middle of the city that once housed the Chrysler engine plant.
According to Priebus, “He said, ‘That land should be used.’ So when Foxconn came into the White House, into the Oval Office, the president said, ‘I know a good spot that you should go — that place in Kenosha.’
“And then all of a sudden the conversation started and the governor came on board and Walker’s been doing a lot of work ever since.”
Another issue likely to figure into any project involving Foxconn will revolve around the company’s air emissions from its manufacturing operations.
Ozone could be issue
The company’s interest in southeastern Wisconsin comes at a time when federal standards for ground-level ozone emissions are slated to become stricter, which could place added regulatory burdens on large manufacturers.
Under former President Barack Obama's administration, the U.S. Environmental Protection Agency toughened the standard for allowable ozone emission — from 75 parts per billion to 70 parts per billion.
Some areas in southeastern Wisconsin would exceed that limit, which might require manufacturers to add more pollution controls or pay other companies for pollution credits that they earned from shutting down or reducing emissions.
Wisconsin officials have raised objections to the tougher standards. Attorney General Brad Schimel joined a group of other like-minded states in a federal lawsuit challenging the new limits.
In the suit, the states said the new restrictions would pose harmful economic consequences on companies operating in areas with a history of ozone levels above 70 parts per billion. The states also said that the law ignores the role of pollution transported from other states.
Also, Trump has ordered EPA officials to delay implementation of the ozone rules. And last week the U.S. House voted to slow the regulatory timeline for compliance.
Ozone is created when heat and sunlight mix with two types of air pollution — nitrogen oxides and volatile organic compounds. Exposure to elevated levels of ozone can lead to reduced lung function and aggravate asthma and other lung diseases.
Tyson Cook, who tracks air emissions for the Clean Wisconsin, said his group — for now — is not commenting on the Foxconn situation.
But he said the public should not lose sight of the fact that the rules were issued after a federal scientific panel determined ozone levels are currently too high and exacerbate health issues.
Cook said that asthma affects about 1 in 13 children in the state. He noted the Department of Health Services has estimated asthma costs at more than $100 million a year.