Foxconn still unlikely to reach 10% of its promise to Wisconsin tax-payers by hiring 15,000 workers

Governor Tony Evers predicted that Foxconn will continue to fall short of hiring goals at its Mount Pleasant manufacturing facility.

In an interview that aired July 9 with CNBC, Evers said his administration now has clarity on the project. Foxconn will likely hire 1,500 people next year. That was compared to 1,800 under the plan the company laid out, which would eventually hire up to 13,000 workers in the state, Evers said.

“You know for Wisconsin, 1,500 employees is important,” Evers told CNBC. “We’re looking forward to working with them. It is more concrete. In fact, I saw them pouring concrete.”

Evers spoke to CNBC in Madison on June 27, one week after visiting the Foxconn construction site in Racine County. Foxconn is currently pouring the foundation for an approximately 1 million-square-foot Gen. 6 fabrication facility in Mount Pleasant. A company official said it will be operational by the end of 2020.

The Taiwanese company fell short of its employment goal in 2018, hiring 178 full-time workers instead of the targeted 260. As a result, it failed to earn a tax credit of up to $9.5 million.

In November 2017, the village of Mount Pleasant and Racine County created a tax-increment district to pay for a $764 million investment to support the Foxconn project. The investment has since been increased to $911 million.

The costs are expected to be recouped over 30 years with funding and property tax revenue from Foxconn. The $911 million is on top of the $3 billion incentives package approved by the state Legislature and signed into law by Walker.

Evers told CNBC transparency is important, as is making sure local municipalities remain involved. Evers said employees will make covers for tablets and iPhones and there will also be space for research and development inside the facility.

Jim Paetsch, vice president of regional economic development group M7, believes what Evers is saying amounts to “one step at a time.”

“This is the largest economic development project in Wisconsin’s history, and right up there in U.S. history,” Paetsch said. “I don’t think anyone from day one thought 13,000 jobs was going to materialize on a quick schedule. The contract Foxconn has with (the Wisconsin Economic Development Corp.) has a gradual uptick in employment from 2018 through 2032.”

Paetsch said while many companies experience change, Foxconn has to be even more flexible.

“In the LCD panel market, that scenario (change) is on steroids,” Paetsch said. “The governor is right, this needs to be a one-step-at-a-time process. We need to be flexible to help them meet the demands that they have.”

Foxconn originally promised a 20-million-square foot facility where very large television screens would be built. Evers said the process which Wisconsin approved the massive incentives package without knowing exactly what Foxconn would be doing was not what he would have preferred.

“It would have been better to think through exactly what it was going to be ahead of time,” Evers said. “It became part of the campaign. You know, (President) Donald Trump coming in and saying it was going to be the ‘Eighth Wonder of the World,’ it set us up for us having too much push and pull on the project.”