Foxconn picks Wisconsin for US plant

A senior White House official confirmed July 26 afternoon that Taiwanese electronics manufacturer Foxconn Technology Group will invest $10 billion and create 3,000 jobs in Wisconsin as part of a plan to build a manufacturing plant to make liquid-crystal-display screens, the type used in everything from computers to vehicle dash panels.

It was the first of what are expected to be multiple announcements by Foxconn about future U.S. projects, the official said.

A press event on the Foxconn project is slated for 5 p.m. Eastern time.

Eventually, Foxconn plans to name multiple investments in multiple locations, likely in two or more states, three officials close the negotiations confirmed to Crain's Detroit Business. One of them could be Michigan. Crain's Detroit Business is a sister publication of Plastics News.

An invitation to President Donald Trump's 5 p.m. news conference with Wisconsin officials says Foxconn will build a LCD panel plant in Wisconsin, the Associated Press reported. The AP obtained the invitation from a person with knowledge of the event at the White House. The person doesn't have authorization to publicly release the information.

White House spokesman Josh Raffel confirmed the Trump announcement would be on Foxconn, but he would not release details ahead of the event.

Wisconsin Gov. Scott Walker tweeted earlier Wednesday that there would be a "major jobs announcement for Wisconsin" at the White House with the president.

News of the Wisconsin deal is expected the same day Michigan Gov. Rick Snyder signed a $200 million tax incentive package geared toward companies that add hundreds or thousands of jobs.

The talks with Foxconn for plant in Michigan, likely geared toward automotive, have advanced to discussing permitting from the state Department of Economic Quality, jobs training with local community colleges and worker transportation for a site in Romulus, sources said.

"The absolute critical factor is the workforce," another source familiar with the deal told Crain's. "With [low] unemployment rates and talent demands, placing a new tech facility anywhere is so dependent on the ready, trainable and available workforce."

The $7 billion investment in the United States could employ 20,000, but any announcement beyond Wisconsin is still several weeks away, the source said.

Tax incentives appear to be the driving factor in Foxconn's decision, as Ohio and Wisconsin have reportedly created incentive packages explicitly catering to Foxconn's needs. The taxpayer-funded package could exceed $1 billion in Wisconsin, the Milwaukee Journal Sentinel reported this week.

Snyder on July 26 signed the "Good Jobs for Michigan" legislative package that he lobbied lawmakers to pass earlier this month in a bid to lure Foxconn to the state with tax incentives.

The legislation would allow businesses that expand or relocate to Michigan to receive up to a 10-year, 100 percent abatement on the personal income tax withholdings for new employees if at least 250 new jobs are created with a salary floor 125 percent higher than the regional average. It also included a provision specifically designed for Foxconn, in which any employer that creates 3,000 or more new jobs could keep up to 100 percent of its new employees' state income taxes for up to 10 years. The state's income tax rate is 4.25 percent.

"We also have to be realistic and recognize we're in a competitive environment with other states. These states have tools that we don't have, where essentially they provide resources to come into their jurisdictions," Snyder said before signing the three-bill package at a vacant site in Rochester Hills, just off the M-59 freeway and Hamlin Road.

The site is a former partial landfill and softball recreation field, Deputy Oakland County Executive Matt Gibb said.

"I don't want us to have the biggest tool in terms of the largest incentive," the governor said. "We want to be competitive, though, and that's what this is about."

The tax incentive passed by wide bipartisan margins in both the Michigan state Senate and the state House, despite concerns among some conservative lawmakers — including House Speaker Tom Leonard — who are philosophically opposed to tax incentives and the perception that the state favors certain companies or industries over others.

The bills were backed by a coalition of dozens of economic developers and local government leaders across Michigan.

Since its final approval in the House this month, the Michigan Economic Development Corp. has fielded calls from companies saying they have offer letters from other states but want to know what Michigan can put on the table, said Jennifer Nelson, the MEDC's chief business development officer.

It's not known whether Foxconn could or would create jobs that pay the regional average salary in southeast Michigan, which is the highest in the state.

In Wisconsin, the negotiations have turned political.

Democrats who are in the minority in that state's legislature have been kept in the dark, two members of the budget-writing committee told the Associated Press. State Sen. Jon Erpenbach is worried that Wisconsin's governor may make promises that require legislative approval, then blame lawmakers if they don't go along because of the cost.

"It's a balance between making sure taxpayers are protected and we're not giving away the store for the political gain for Scott Walker," Erpenbach said. "If it's a deal for both sides, that's great."

Deller is also concerned that Walker — eager to bolster his resume as a job-creator as he heads into re-election next year — may give up too much. Walker ran in 2010 on the promise to create 250,000 jobs, but still hasn't hit the mark. Deller said that in addition to the cost to state taxpayers, schools and local governments could also be pinched because deals to large companies often allow them to escape paying property taxes, which pay for some local services.

In Michigan, the negotiations haven't turned as political, but could quickly if Foxconn doesn't make good on any promises its making.

In 2013, Foxconn left economic development officials in Harrisburg, Pa., in a lurch after discussing a $30 million plant investment that would employ as many as 500.

"In the economic development world, you have to be a little cautious, a little cynical," said David Black, president and CEO of the Harrisburg regional chamber and its economic development corporation. "When it didn't take place, there was a little bit of a letdown ..."

Crain's reporter Kirk Pinho and the Associated Press contributed to this report.