Speaker Vos predicts changes to Foxconn contract won't win approval, stands by claim company will create 13,000 jobs
MADISON - Assembly Speaker Robin Vos attacked Gov. Tony Evers as naive Thursday and said he wouldn't be able to win approval of changes to Wisconsin's job-creation deal with electronics-maker Foxconn Technology Group.
In an appearance on WISN-AM (1130), the Rochester Republican told host Jay Weber any changes to the agreement would be worse for taxpayers and claimed the company was committed to creating 13,000 jobs in Wisconsin despite saying it would build a smaller plant than originally envisioned.
Foxconn on Thursday reiterated its pledge to create 13,000 jobs, a commitment the company has stuck with through multiple changes to other aspects of its plans.
Evers said Wednesday that the company would not create as many jobs as promised and that he wanted to renegotiate the state's deal with the company that is worth up to $3 billion. With local incentives, the total package could be worth as much as $4 billion.
Vos on Thursday said, "The only thing that could happen is to make the deal worse for Wisconsin.
"Why would we ever want that?" Vos said. "Either fewer jobs or fewer investments. It is beyond my level of understanding to think that a governor of Wisconsin is basically rooting for the failure of the largest economic development in our state’s history."
Evers said the contract may need to be "downsized" because the company's plans have changed. He said it was premature to say what changes were necessary and aides declined to say whether the incentives included in the deal should be altered.
FULL COVERAGE:Foxconn in Wisconsin
On Thursday, Foxconn issued a statement pledging to create jobs in Wisconsin.
“Foxconn remains committed to our contract with the State of Wisconsin, as well as continuing to work with Governor Evers and his team in a forthcoming and transparent manner,” the company said in its statement.
Two industry experts on Thursday speculated that the manufacturing plant itself could require as few as 2,000 employees.
Bob O'Brien, co-founder and president of industry research firm Display Supply Chain Consultants, estimated that a "Gen 6" LCD plant — the type Foxconn now says it will build — would employ "a few thousand" people.
But much is uncertain because little is known about Foxconn's plans, he said.
"It depends on what you're making, how you're making it and how many you're making," O'Brien said. A plant making a wide variety of niche products, for example, would need more assembly help than a plant making a narrow range of displays, he said.
O'Brien estimates production of 30,000 displays a month and said employment could be higher if production numbers are higher. Foxconn has not said anything about expected output volume.
Alberto Moel, who formerly covered the Asian flat-screen industry for research firm Bernstein, predicted about 2,000 positions total but said a plant probably could have far fewer if there is a lot of automation.
But like O'Brien, Moel said much depends on what is being made. A Gen 6 plant cutting glass into many small pieces to produce smartphones would need more employees than a much-larger plant making big-screen TVs, he said.
Foxconn in its statement suggested its plans to meet the expected investment in Wisconsin go beyond the terms of the contract, which currently require Foxconn to build a so-called Generation 10.5 manufacturing facility — a type of factory the company has since said it will no longer build.
"Our investment in Wisconsin is driven by our vision to help the Badger state create an advanced high-tech ecosystem, thus establishing Wisconsin as a global technology hub, not only through the Wisconn Valley Science and Technology Park, but also through our extensive investments that go beyond the (Wisconsin Economic Development Corp.) contract,” the company said, citing its innovation centers in Green Bay, Eau Claire and Racine and a $100 million partnership with the University of Wisconsin-Madison for medical research, among other investments in the state.
Foxconn has taken out permits to do about $2 million worth of work on the space where it has said it plans an innovation center in Eau Claire, Aaron Collins, the city's economic development manager, said Thursday.
No permits have yet been pulled for remodeling or renovation at the building Foxconn bought in Green Bay, said that city's development director, Kevin Vonck. Officials with Racine's development department could not be reached Thursday.
Under the deal with the state, Foxconn can claim cash from the state annually by hitting targets specified in the contract. The company has not yet received any job creation or investment subsidies and it fell short of creating the minimum number of jobs for 2018.
Foxconn’s contract requires state taxpayers to cover 17% of wages paid by Foxconn to its workers at the Wisconsin facility and to cover 15% of the company’s capital investment. Under deals with other companies, the state has agreed to cover 7% of wages and 10% of capital investment.
When Walker and Republican lawmakers urged their counterparts to pass the subsidy package, they argued the increased taxpayer support was worth the “transformational” ripple effect the project would have statewide — including a supply chain that would be unprecedented.
Vos and Senate Majority Leader Scott Fitzgerald of Juneau continue to back the subsidies and tout the pay-for-performance nature of the agreement, noting taxpayers don't provide subsidies unless the company meets its obligations.
“I am adamantly opposed to the governor making a one-sided attempt to reopen the contract,” Fitzgerald said in a statement. "The state is not in a vulnerable position and if the job growth and investment doesn’t come, the state doesn’t pay."
Vos in his radio interview said Foxconn is committed to creating 13,000 jobs. The project is in Vos' Assembly district.
"I have met with the company more times than I can count and every single conversation has always been focused on the idea that their goal has never wavered from creating 13,000 jobs," he said.
Vos said any changes to the contract with Foxconn would need to be approved by the board for the Wisconsin Economic Development Corp. The board is controlled by Republicans and will be evenly split between the two parties starting in September.
Vos said he did not think changes to the contract could get through the board, at least in the short term.
"I think it’s very, very, very unlikely that it would happen before September in a meaningful way and hopefully after it as well," Vos said.
He criticized Evers' negotiating tactics and alleged he was putting politics above job creation.
"Tony Evers must have some kind of a contract with the Democrats who are running for president who are rooting for this project’s failure so they can somehow blame Donald Trump," Vos said.
"It’s really insulting to kind of take the tack that he is, which just in my mind shows how naive — let’s be kind — how naive Gov. Evers is to not understand the full ramifications of the words that he says and the actions that he is trying to take with this administration."
He contended Evers' approach would hurt the state's economy.
"He is not doing no harm. He is doing harm," Vos said. "Because if you are an investor that is thinking about building a hotel or bringing in a supplier to Foxconn, why would you ever consider doing it now that the governor has started saying the project is being undermined?"
Rick Romell of the Journal Sentinel staff contributed to this report.