Foxconn Looking for 'Flexibility' in Contract

Wisconsin Gov. Tony Evers said Foxconn has not detailed what changes it wants to see in the agreement to build a $10 billion facility in the state.

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Design & Development Today

Foxconn Technology Group has not detailed what changes it wants to see in its contract with Wisconsin for a project that could employ up to 13,000 people, Gov. Tony Evers said in an interview Wednesday.

Foxconn insists it remains committed to a $10 billion project, while saying it is also looking for "flexibility" in the deal struck with much fanfare in 2017 and heralded by President Donald Trump as the "eighth wonder of the world."

Evers told The Associated Press that no decisions have been on what could be changed in the contract.

"It's just that they have asked that we take a look at the contract and we're going to do that," he said.

Evers, a Democrat, disagrees with Republican legislative leaders over the extent to which the company wants to renegotiate its contract with the state for a project that could net Foxconn more than $4 billion in tax credits.

Evers campaigned as a skeptic of the project against then-Gov. Scott Walker, who made the deal. Evers said last week that the current deal is "no longer in play" because Foxconn is building a smaller display screen factory than the one envisioned in the contract. Evers also said he doesn't think Foxconn will employ 13,000 people, which necessitates changes.

"Clearly they're going to be producing something different than what they originally proposed," Evers said in the interview. "And as a result of that there have been discussions about how that impacts the deal, the contract."

He wouldn't talk about what might be altered, but he and other critics have said the level of credits for Foxconn are too high.

Foxconn did not hire enough people last year to collect its credit for employees, leading some to speculate it may want to lower the employment benchmarks.

"I'm not going to make any guesses as to what their negotiating strategy should be or what they should be asking for," Evers said.

Foxconn, in a statement late Tuesday night, said the company "has never wavered from our commitment to our contract" and said the talks with Evers were more about creating flexibility within the current agreement.

Performance-based state tax credits are the core of the contract. Foxconn earns jobs and capital investment tax credits for meeting benchmarks each year. It can earn $1.5 billion in tax credits if it hires 13,000 people making an average salary of $53,875. Foxconn would get an additional $1.35 billion in tax credits if it spends $9 billion on capital investments, primarily building construction and the purchasing of machinery and equipment.

Evers also said that Foxconn executive Louis Woo met with Republican legislative leaders and told them of Foxconn's intention to suggest changes to the agreement. Republicans have been highly critical of how Evers has dealt with Foxconn, saying he is "undermining" the deal reached before he took office.

Senate Majority Leader Scott Fitzgerald said there was "no discussion" during the meeting with Foxconn's Woo about opening the contract for renegotiation. And Assembly Speaker Robin Vos, whose district includes the project, said he's not interested in making "wholesale changes" to the contract.

"If they come to us and want some minor tweaks, as long as the job goals and taxpayer protections remain, I'm open to listening to their ideas," Vos said Wednesday.

Democratic state Sen. Jon Erpenbach said he thinks Evers is dealing more in reality on Foxconn than Republicans "because that was their baby."

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