Saturday, February 2, 2019

Foxconn Says 'Yes' To LCD Factory After Talking With Trump

From Mount Pleasant-Sturtevant Patch:

Foxconn says it talked with President Donald Trump, and has now reaffirmed that they're building an LCD factory in Racine County.

By Scott Anderson, Patch Staff | | Updated

Patch File Photo by Scott Anderson
RACINE COUNTY, WI -- After news reports surfaced this week saying that Foxconn was changing plans in Wisconsin - evolving from a liquid crystal display plant to more of a research-and-development facility, the company now says that they're going to build the original $10 billion LCD plant in Mount Pleasant after all.
Here is the full text of Foxconn's statement:
"After productive discussions between the White House and the company, and after a personal conversation between President Donald J. Trump and Chairman Terry Gou, Foxconn is moving forward with our planned construction of a Gen 6 fab facility, which will be at the heart of the Wisconn Valley Science and Technology Park.
This campus will serve both as an advanced manufacturing facility as well as a hub of high technology innovation for the region."
"Our decision is also based on a recent comprehensive and systematic evaluation to help determine the best fit for our Wisconsin project among TFT technologies. We have undertaken the evaluation while simultaneously seeking to broaden our investment across Wisconsin far beyond our original plans to ensure the company, our workforce, the local community, and the state of Wisconsin will be positioned for long-term success."
"We look forward to continuing to expand our investment in American talent in Wisconsin and the US."
Local Officials React Positively

The following joint statement was issued Friday afternoon by Village of Mount Pleasant President David DeGroot, City of Racine Mayor Cory Mason, Racine County Executive Jonathan Delagrave and Jenny Trick, Executive Director of the Racine County Economic Development Corporation:
We welcome today's announcement that Foxconn has determined the LCD/TFT technology it will build at its advanced manufacturing campus in the Village of Mount Pleasant. We look forward to working with Foxconn as it advances its Generation 6 manufacturing facility, including its ongoing construction of manufacturing, assembly and research facilities in 2019.
Foxconn has confirmed to us that it will host information sessions in April for the next round of construction. It will also commence work on the Gen6 Fab facility, along with completing work on the campus facilities it shared earlier this week, over the next 18 months.
We remain committed to ensuring that Foxconn's investment in our community will bring unparalleled economic development, job growth and enhanced quality of life for those in Racine County and throughout Wisconsin.
Report Stated Foxconn Suspending Racine County Work

One day after news broke that Foxconn said it would be changing plans for its $10 billion LCD screen manufacturing plant came a new report that the Taiwanese electronics manufacturer was going to be suspending work in Racine County.
According to the Nikkei Asian Review, "Foxconn's $10 billion investment in display production in the state of Wisconsin has been suspended and scaled back as a result of negotiations with new Gov. Tony Evers," according to documents Nikkei says they've obtained. Nikkei further reported that Foxconn plans to "only halt [the Wisconsin project] for further evaluation and discussion with the new governor."
It's no secret that Evers, a Democrat, had interest in approaching Foxconn to renegotiate aspects of the deal former Gov. Scott Walker, a Republican, helped to put in place before he left office.
According to a Thursday report in the Journal Times, the Evers camp denied both interest and intent to re-negotiate the rules on Foxconn. However, there have been multiple instances in which Evers took an aggressive posture when it came to looking at GOP-constructed deals with Foxconn while on the campaign trail.
According to a Milwaukee Biz Times article, Evers said that he would look at renegotiating parts of the contract with Foxconn with an eye on fortifying the state's position on wages, Milwaukee-area hiring, public transportation and the plant's energy efficiency. He said he would do so by using local transportation projects as negotiating leverage against Foxconn.
"I would really focus on compelling them to be good corporate citizens," he said. "I don't believe they want to be viewed as bad actors," he said. But shortly afterward, Evers ratcheted up his rhetoric in the Biz Times, indicating a much stronger stance than before.
"That's a lousy investment," Evers said in the Biz Times of Wisconsin's $2.85 billion incentive package that Walker's administration passed in November 2017. "Foxconn has already backtracked on several of its promises and is not being held accountable by Walker. When I'm governor, we'll hold Foxconn's feet to the fire and make sure that Wisconsin is getting the best return on investment possible."
Evers has also gone public with his intention to revise air pollution regulations around the plant. "I've had many scientists look at that approval process and they've found many flaws with that decision made by the Department of Natural Resources,"Evers told the Wisconsin State Journal during the campaign. "So I would take that information and the approval and say, 'How can we get from here to here?'"
Report said Foxconn Not Making LCD Screens in Racine County
A top Foxconn executive told reporters Wednesday that the Taiwanese electronics manufacturer may not end up making LCD screens in Mount Pleasant, throwing into question the $10 billion factory's future.
Louis Woo, special assistant to Foxconn Chief Executive Terry Gou, told Reuters that Foxconn is evaluating options for Wisconsin, but added that making advanced TV screens in the U.S. comes at a high cost to the company.
"In terms of TV, we have no place in the U.S.," he said in an interview with Reuters. "We can't compete. In Wisconsin we're not building a factory. You can't use a factory to view our Wisconsin investment," Woo said in the interview.
In the report, Woo told Reuters that the company's latest plan is to create a campus of research facilities along with packaging and assembly operations.
Racine County officials responded to the report later Wednesday, saying they've received reassurances from the company that Foxconn's commitment to generating 13,000 jobs is still on track
Village of Mount Pleasant President David DeGroot, Racine County Executive Jonathan Delagrave and Jenny Trick, Executive Director of the Racine County Economic Development Corporation issued the following statement, which says in part:
Contrary to what was reported by Reuters, Foxconn reiterated to us, today, its commitment to building an advanced manufacturing operation in Wisconsin, in addition to its commitment to create 13,000 jobs and invest $10 billion in Racine County. As Foxconn has previously shared, they are evaluating exactly which type of TFT technology will be manufactured in Wisconsin but are proceeding with construction on related manufacturing, assembly and research facilities on the site in 2019.
We understand that Foxconn must be nimble in responding to market changes to ensure the long-term success of their Wisconsin operations. We fully expect that Foxconn will meet its obligations to the State, County and Village.
Officials stated that both the local and state development agreements are legally binding, and include strong protections for taxpayers. The state agreement, they said Wednesday, was largely based on job creation, and ensures that Foxconn only receives state tax credits if it meets or exceeds its targeted hiring amounts in any given year.
The local development agreement stipulates that, if, for any reason, Foxconn's investment on the campus falls short, the company remains obligated to support a minimum valuation for the project of $1.4 billion, which will more than pay for all public improvements and development costs for the project.
Then the War of Words Happened
Wednesday morning, Wisconsin legislative Republicans made short work to blame incoming Democratic Gov. Tony Evers for the latest iteration of Foxconn's plans in Wisconsin. Democrats fired back, saying the deals former Gov. Walker made with Foxconn were not going to stand the test of time.
Assembly Speaker Robin Vos (R-Rochester) and Senate Majority Leader Scott Fitzgerald (R-Juneau) released the following statement on the Foxconn commitment to Wisconsin.
"We don't blame Foxconn for altering plans in an ever-changing technology business. It's also not surprising Foxconn would rethink building a manufacturing plant in Wisconsin under the Evers Administration. The company is reacting to the wave of economic uncertainty that the new governor has brought with his administration. Governor Evers has an anti-jobs agenda and pledged to do away with a successful business incentive for manufacturing and agriculture.
State Sen. Lena Taylor (D-Milwaukee) wasn't buying Vos' explanation for matters surrounding Foxconn's latest news: "To imply that a change in the Governor's office is justification for Foxconn's outright lies to the residents of this state, is ridiculous. It also doesn't fly, since again, Foxconn started reneging on aspects of the deal while Walker was still in office," she said in a statement Wednesday.
"Almost has soon as the ink dried on the Wisconsin deal, Foxconn started walking back their promises. Immediate reductions in screen sizes, hires, Chinese workers instead of Americans, plant operations, assembly workers, and on and on. The only thing that hasn't changed is that this has been a bad deal for Wisconsin since the start. At some point, Republican leadership needs to admit, plain and simple, they got played," Taylor added.

Largest Incentives in State History
It would take state taxpayers a minimum of 25 years to break even on a proposed $3 billion incentive package that is designed to lure electronics manufacturer Foxconn to Wisconsin.
According to an analysis by the nonpartisan Wisconsin Legislative Fiscal Bureau, the cost of the tax credits would exceed potential increased tax revenues by $1.04 billion at the end of the fiscal year 2032-33.
Speaker Paul Ryan delivers his remarks Friday.After that year, payments to Foxconn would end and increased tax collections are estimated at $115 million annually. Their analysis, which was released Tuesday, implies that the break-even point would come during the 2042-43 fiscal year.
But it might not.
The Legislative Fiscal Bureau in its analysis said that any cash-flow analysis that covers a period of nearly 30 years must be considered highly speculative, especially for a manufacturing facility and equipment that may have a limited useful life.
Technological advances and changes in Foxconn's market share, operating procedures, or product mix could significantly affect employment and wages at the proposed facility over time.
Also, state law changes could affect the estimated amount of tax collections received from the additional economic activity, and any future state assistance that may be provided to Foxconn would affect the analysis.
Local Incentives
Racine County officials revealed last month that Racine's incentive package to lure Foxconn was approximately $764 million - a figure as staggering as the overall size of the project.
According to Racine County figures, that breaks down to the following uses:
$168 million for property acquisition
$175 million to finance the package
$160 million for water and wastewater infrastructure upgrades
$116 million for public safety and police upgrades
$100 million in Tax Incremental District Financing
$28 million held in contingency
$12 million for road upgrades
$5 million for fiber optic lines
And for all that, Racine County Executive Jonathan Delagrave said there will be no tax increases for county residents by way of a tax increment district to fund the project. By establishing a TID, a City or Village is able to capture the property tax revenue from new development inside the TID to pay for public improvements in and around the TID.
The county estimates that once the Foxconn TID closes, there will be $31 million in new tax revenue per year for the village.

1 comment:

TSE said...

Projections vs Receipts.

Tell me more when the Receipts actually arrive.